What business advice is effective against stiff competition?

As a follow up to my other question, my depressed friend faces stiff competition in her english-learning grade school academy. 6 larger private schools with lots of cash came to town last month with better educated teachers. My friends number of students is dropping off. I had the idea of offering the cheapest prices. My friend thought about finding a professional english teacher to attract clients, or moving to a different area of the country even though competition is fierce everywhere. What else can be done?What business advice is effective against stiff competition?
There are only two ways to compete ';Price Competition'; and ';Non-price Competition.';





Price Competition could backfire on you because your competitor has more funding and can probably cut prices and beat you at your own game. In addition, if you cut prices, the percieved value of your services may be lower. Also, if this strategy fails, you will have trouble raising your prices back to its current level.





I would suggest ';Non-Price Competition.'; Find a way to differentiate yourself from the competitors. Look at what they are doing (or not doing) How can you meet the customer's needs better


? Is there a target market they are neglecting? Are they doing something that you can also integrate into your business?





Think about Starbucks.... they are not the cheapest, but they have excellent service and are focused on providing their customers with a great expirience.What business advice is effective against stiff competition?
Honestly, I've always found it very beneficial to find out what my competition is doing to get more business then I and then see how I can do it better..or add my own unique 'twist' to it.





Sometimes, just by focusing my attention on really 'helping people', instead of focusing on the bottom line, or what each new customer adds to my bottom line, I've seen businesses grow substantially!





Bottom line, see what the competition is doing...and then 'duplicate it'...as the old saying goes..';duplication is the sincerest form of flattery!'..





Hope this helps?
Really concentrate on holding down costs.