Keep your friends close and your rivals even closer. It is good to know the companies you are competing against as well as you know your own company. However, to know something well does not necessarily mean to know everything about it. In business it often means to know things that matter most and that will make a difference. No more, no less.
Some people believe that comparison is the root of many evils. Some even preach that it was comparison that caused the first recorded murder in human history. No kidding, Cain killed Abel because God accepted the offering of the younger brother but didn't like the fruit of Cain's harvest. What did Cain do" He compared himself to his brother and comparison made him feel bad about himself, in fact so bad that he.. you know how the story ends. So, is comparison evil" It depends on what you do with it.
One of the most typical outcomes of comparison is competition. No one will argue the statement that competition is natural and happens among all living organisms that share the same environment. It allows the fittest to survive, says the law accepted by the scientific community more than a century ago, the law that explains the driving force behind development in the animal world, human race and" in business.
In order to become those fittest that will survive in the end you have to know your competition well. Who are your rivals" Where do they stand" What are they capable of" What are their strengths and weaknesses" In the world of business things are measured in terms of money. As they say, no money, no business. So if you start the analysis with an assessment of the financial health of your competitors' business you cannot go wrong.
Of course, money in the form of cash flow, returns on assets and equity, operating and net profit margins is not the only thing that should be taken into account when scanning the financial situation of your competition. Products and/or services that your competitors offer deserve as much attention if not more. After all, if you know the strengths and weaknesses of their products or services you can, first of all, see to the roots of their success and secondly, turn this knowledge into cash. A scrupulous analysis of your rivals' products and services will most likely reveal their shortcomings. A little bit of effort to make some corrections and you may introduce a similar product into the market that meets customers' needs and has a success guarantee. And it is absolutely moral and legal. Wise men learn by other men's mistakes.
Another important factor to consider is how much effort your rivals put into developing and strengthening their relationship with customers and employees. Solidity and reliability of human factors are the integral constituents of any prosperous business. If the retention rate of new hires and market penetration numbers, i.e. the number of the company's customers compared to the number of potential customers in the market, are high, if the employees stay with the company for a long time, your rivals are planning to be in the market for the long term. Even if you are not able to lure too many of their dissatisfied customers to your side (since there are not too many of them, anyways), you can still benefit from your analysis. Learn from the best. Implement similar strategy and tactics in dealing with your employees and customers. And if you do, you have a chance to become a good match for your rivals. I personally believe it is always better to be one of the best than the best among the worst.
There can be many things you would like to know about your rivals, however, the key to success is to single out what matters most. Do not waste time by going into too much detail in your analysis. Concentrate on those areas that will help create a true picture of the company's well being and will reveal its strengths that you have to compete with and weaknesses that you can use in your favour.