Competition can be great motivation for improving a business and drawing more customers. By looking at competition, a business can learn new tactics to increase restaurant business. Though sometimes competition can be understandably frustrating, at other times it can be a positive way for food businesses to build relationships with others and learn more about the niche of running food businesses.
Having restaurant competition that offers a dining experience similar to yours (whether the menu, venue, or concept is the same) can cause your customer base to dwindle. When this new competition pops up, business owners may be skeptical about the positive side of competition. However, challenges can make a business stronger. The competition will force a business to consider their weak points and strong points, to locate areas for improvement, and to ensure they are offering customers the best dining experience possible. This may mean reviewing the prices to make sure they accurately reflect the food costs, improving the customer service, tweaking the restaurant ambience, or adding creativity to the dish selection. Monopolistic venues, those offering a dining experience unparalleled in the area, may be at an advantage when it comes to a steady base of loyal customers. However, venues that must fight a little to hold on to their customers are more likely to analyze themselves from within and constantly make improvements, making the venue on a higher level overall. This motivation to improve can be realized through understanding competition.
Competition can be a huge pain. If the pastry shop around the corner starts selling French Macaroons and croissant sandwiches as well, the result can be a decrease in customers for the original venue. This copying is the main reason behind keeping an idea hushed when drafting a business plan, before opening a venue. If this occurs, the immediate response of the original business should be ensuring that the products and services offered are the best possible. Next, understanding the underlying reasons why an almost identical venue opened can be a start to figuring out how to go forward. If the original business was booming and the other venue wanted a piece of the pie, it can be a problem. On the one hand, they may soon lose their customers to the original business when people realize the first venue is the original or if the first venue is better. On the other hand, customers may be at the new venue to stay, in which case the original business should consider what changes can be made to cause customers to choose them over the other. Going back to the pastry shop example, maybe the original pastry shop should add a sitting area and espresso machine so that customers can enjoy their desserts with a cup of coffee. Some other possibilities include expanding or changing the menu, improving food presentation, ensuring that the customer service is the best it can be, and making sure the venue is comfortable and aesthetically appealing to the target customer base.
Understanding competition is the first step in taking a tricky situation and making the best out of it. Competition forces businesses to evaluate themselves and make improvements, making it a positive thing for the business as well as the customers. Even competition that originated as an exact model of an existing business can motivate the original business to improve even more, though in this situation more secrecy about business plans is crucial. By understanding competition, businesses can better understand their own strengths and weaknesses, and can make improvements they may have never realized otherwise.