How to: assess the competition
When selling internationally, you are likely to find most markets have a combination of existing domestic and international competitors already in place. For this reason, it’s essential for Irish companies to stand out as being different to whoever their target customer is buying from now.
Your initial research into export markets should also include an evaluation of your likely competitors, so that you can understand how you can more differentiate your offer from theirs and communicate it effectively. You need to know who else is competing for your market, what products and services they provide, what are the advantages and disadvantages of their offering and their market share. What are their strengths and weaknesses, and what opportunities or threats do their positions represent?
Where to look
Trade fairs and company websites are excellent sources of competitive intelligence. You can obtain material that details the product or service features which your competitors emphasise the most, and you may also be able to find out how they price their product.
EXPORT CHECKLIST: TIPS FOR EXPORT SUCCESS
- Carry out desk research first: know the buyers from that market even before you travel. Many companies miss out on this highly important stage of the process, and they don’t succeed because they don’t know the market and aren’t doing sufficient research
- At these events, speak to prospects from your target market who are also an excellent source of competitive intelligence
- Keep abreast of your competitors’ activities. Regularly visit their website especially their news and events pages; at trade shows, look at their product focus; regularly download or source a published product catalogue
- Use tender notifications and published contract awards to estimate market potential and gauge competitor activity
- Know the full costs and the margin before agreeing to any activity or partnerships
- As a first-time exporter, you will probably work with a local distributor. It’s important to find out about their relationships with existing competitors in the market
- Task your distributors to help you understand the full cost and margin to assess competitor activity in their market
- Record everything for future reference.
Case study: Armstrong Medical
Founded in 1984 in Coleraine, Northern Ireland, Armstrong Medical (www.armstrongmedical.net) makes and sells respiratory disposable products for critical care applications. The company first began selling to Britain and then the Republic of Ireland four years later, followed by mainland Europe in the mid 1990s. It now has distributors and customers worldwide, from Saudi Arabia and Sweden to China and Venezuela. Entirely self-financed, the company uses profits from top-performing markets to support its expansion into new export destinations. Targeting double its current turnover within three years, Andi Regan, Business Development Manager, shares the secret of its success.
In what ways do you look to differentiate your company from the competition?
Customisation has been a key differentiator for us – by listening to hospital customers, we discovered early that they wanted the added value of everything in one package, rather than order and stock multiple SKUs. Our rapid prototyping centre enables us to have a faster speed of response compared to most of our competitors. We can have a sample of a customised product, designed to meet the customer’s exact requirements, made and delivered to them within one week. Almost all of our competitors offer less customisation than we do and although it’s starting to become the industry norm now, our speed of response gives us an advantage.
“We travel regularly to the markets in which we have distributors”
How do you find out about the competition in markets you are targeting?
The first year that I attended the Middle East trade show, Arab Health Dubai, I have to admit, I knew very little about the region, so I spoke to everyone that came on the stand to find out what I could about the healthcare systems, our competition and the distributors in these markets; people are very willing to share information about their markets! Whatever information I learned about a particular market I then verified with the next guy I spoke to from that market. It has helped us develop our brand in the Middle East region where we now have some of our top-performing distributors.
We regularly review tender notices and contract awards for particular markets. Whilst time-consuming, this is a very useful exercise as you can often gauge market potential (size) and even find out which competitors are active. Product descriptions in tenders/contracts quite often pertain to one particular brand.
We log everything into a database, and we keep updated market research for every country where we are active and where our competitors are active. This is very useful because there’s such a flux in the medical industry. Some of the top key corporations have merged or acquired parts of others, and that can create opportunities – if you know where to look for them. For example, we have recently appointed several new distributors in Europe – companies that previously acted as distributors for competing product brands. Timing is important; don’t write a distributor off because they are acting for your competitor today – that may change tomorrow.
We travel regularly to the markets in which we have distributors, and we also bring distributors to Northern Ireland for annual training seminars. It is important not only to understand the market but to build relationships with the people who represent your brand in that market. People buy from people, and the only way to build a relationship of openness and trust is to visit regularly and embrace their culture. We task our distributors with finding out which of our competitors products are in use, on tenders and on trial. Quite often they will also find out the price-point which helps us build up a picture of pricing level variations internationally.
Case study: accountsIQ
Dublin-based software company accountsIQ (www.accountsiq.com) uses the internet to deliver its application to help businesses manage their accounts. Launched commercially in 2007 after more than 30 man-years of development, accountsIQ now has users in 26 countries. The software is developed at company HQ in Ireland, supported by sales offices in the UK, the US and Australia. Founder and CEO Tony Connolly offers tips about how his company stood out from rivals in the market.
With so many different online applications available, how do you try to stand out in markets where so many others are potentially competing with you?
There’s a huge amount you can find out on the web, because they’re all trying to sell what they have online. And you can look at the features and what they’re offering versus your solution. We did a lot of keeping an eye on what was happening in different markets but also had a clear niche we wanted to target. It’s very important from day one, particularly for Irish companies, to clearly differentiate. You can’t be all things to everybody.
In our case, we’re competing with large companies like Sage and Intuit. You can’t hope to be directly competing with them on a one-for-one basis. But you can compete with them if you have a clearly differentiated product that suits the market you’re going after. We specifically target accounting firms who offer outsourced accounting services to their clients and franchisors as a platform for their franchisees. So a lot of the focus on developing the product involved having the domain knowledge about how to do outsourcing and manage franchising, and we’ve applied that to designing the solution to suit those environments.
When we speak about those areas, we highlight functionality that most other high-value products just don’t have. We’re competing very much on the basis of having unique functionality that suits our customers’ particular needs. I think any Irish company needs to do that: to be clear on what differentiates their offering.
What skills have you brought to exporting?
I am a Chartered Accountant, and that background definitely has an influence. Certainly, I wouldn’t have been able to do what we’re doing without that background and expertise. When you’re exporting a new offering to a market you don’t know, it’s not like everything goes according to plan: you need to adapt as you go along. Being able to analyse a situation and evaluate how best to approach it helps you adapt.
You’re dealing with issues all the time as you go out into the international market – and there wasn’t a well trodden path to follow – issues arise and you have to deal with them as you go along. Adaptability is therefore very important and having a good business background obviously facilitates that, where you can plan yet be adaptable and quickly evaluate what the implications are of any changes. Obviously when you are entering a new market, there are upfront localisation, marketing and sales costs and you’re hoping to recoup them through future profits, so you need to understand the relevant business model that will eventually get you a return that justifies those upfront cost. That even goes down to things like how you charge customers in that market and how that compares with what the competition charges: we put a lot of effort into modelling that to understand revenue opportunity versus investment and costs involved.
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