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Friendly Competition?

Don't count on it. If you do, your rivals might just steal your customers from under your nose.

Felicia Lindau knows they're out there. Potential competitors for Sparks.com, an online retailer of real greeting cards founded by the San Francisco entrepreneur one year ago with partner Jason Monberg, 27, run the gamut, from the corner gift shop to Amazon.com. That awareness was brought home during a recent meeting with executives of another company, supposedly to explore setting up a strategic alliance with Lindau's 70-person firm.

"One of them laid down a briefcase and out popped one of our business plans from a year ago, which they had clearly [obtained] through channels we had not intended," recalls Lindau, 32. "Someone to whom we had given a confidential copy of our business plan had shared it with our competition."

Experts in competitive strategies say eventually, every firm will find out it has at least one serious competitor planning to take away its customers. How early you detect those threats may make the difference between whether you hang on to your customers or lose them to the competition.

"The key is to stay ahead of where the competition is emerging," says George E. Cressman Jr., a consultant on pricing and competitive strategy with Strategic Pricing Group Inc., located in Marlborough, Massachusetts. "You're ultimately looking to say to customers that they should buy from you, because there's no place else where they can get the kind of value you deliver."

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This article was originally published in the December 1999 print edition of Entrepreneur with the headline: Friendly Competition?.

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