“What do you think about Starbucks coming to Sydney?” It was in the late 1990s and Starbucks had announced they would open their first store in Sydney in mid-2000.
I’d been buying my coffee beans every Saturday from the same local coffee roaster and I was curious how they felt about Starbucks impending arrival.
I distinctly remember what he said:
“Competition is always good! Keeps us all on our toes”
While it is difficult to imagine now no-one really knew what impact Starbucks would have on the local coffee environment. This was Sydney in the late 1990s and while there was a strong coffee culture then, the idea that Starbucks was coming filled some coffee shop owners with dred. The Sydney Olympics was just around the corner and it seemed this had drawn attention to a whole new wave of new business opportunities. Starbucks amongst them
The idea that a “Chain” of coffee shops was coming into Australia was perceived as quite frightening. Many people imagined the worst.
I remember my conversation with Paul at the time and have used this example when I’m working with clients.
The fact that Starbucks entry into Australia didn’t spell the end of our style of coffee culture is merely part of history now.
Understanding your competition is part of being in business.
Not understanding yours, and not wanting to understand yours is just plain naive.
What are the critical questions? List all your existing and potential competitors:
Who are your direct competitors – those selling the same products as you?
Who are your indirect competitors – those whose market overlaps yours?
What prevents other new businesses competing with you? You can think of this in terms of what are the barriers to entry?
What is your USP, your Unique Selling Proposition?
While each of these questions is important, this last question is the one that helps you understand your point of difference, the thing that makes you different from your competitors. Why will your customers/ clients buy your products/ services rather than what your competition is offering’?
If you are at the DreamUp phase of your Business Startup take some time to think about your business idea. How would you answer these questions? How well do you understand your competition?
This is just one of the many areas to understand in the Business StartUp journey. If you are keen to know more about taking your business idea from DreamUp to StartUp we have an on-line training program So You Want to Start a Business
(I just wanted to also let you know that I did actually work for Starbucks for about a year focusing on improving some of the underperforming stores. Starbucks is an amazing business. I met and worked with some inspiring people and I still draw on lessons learned during that time; I loved every minute of it. There are lots of great reasons for being part of Starbucks – customer service, systems and processes, fabulous training, values and .)
I’m Ingrid Thompson and thank you for reading this post.
My guess is that you are here because you are curious about what it might be like to start a business?
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