Whatever product or service any business has to offer in the marketplace, chances are it's going to get competition. Rather than ignoring these competitors, the best way to mitigate competition is to take a proactive approach and develop a competitive marketing strategy. A competitive strategy is one which objectively assesses the strengths and weaknesses of a product or service and compares them to that of its direct competitors. Marketing methods for the product or service are then determined accordingly, in a way that capitalizes on one company's advantages over the competition and minimizes its weaknesses.
Sizing up the competition to determine their strengths and weaknesses is something that a company can do in-house through pre-existing staff, or can outsource to a research firm along with other components of the competitive marketing strategy. Thanks to the Internet, most competitor information can be gathered online, and a summary can then be created using data from different websites. Most websites or online research firms charge for the disclosure of certain data, such as the hard numbers behind a competitor's financials, while other information, such as proprietary trade secrets may prove impossible to collect altogether.
Once the strengths and weaknesses of the competition have been collected, they should be organized into a chart alongside the company's strengths and weaknesses for easy comparison. The columns should include factors pertinent in the marketplace, such as pricing, annual sales, customer satisfaction, and functionality. The plan of action detailed in the rest of the competitive marketing strategy should then address each of these strengths and weaknesses. For example, if a company is selling technology and has discovered in its research that the competition's technology is slower, the company will want to emphasize how fast its technology is in its advertisements and other marketing material.
In the event that research on the competition indicates that the company is weaker in most areas and possess no competitive edge, its competitive marketing strategy might entail teaming up with the competition. This could mean buying out the competition or vice versa, or it could also mean turning the competition into a client. For example, if a product is hand-made greeting cards and its biggest competition is an established, manufactured card company, one company could offer to become the other company's "custom" arm, which fills its orders for customized cards.