The competitive analysis process presents an opportunity to describe your major competitors in terms of the factors that most influence revenues. This may include your competitor’s:
Industry associations, industry publications, media coverage, information from the financial community, and their own marketing materials and websites may be good resources to identify these factors and “rate” the performance of each competitor.Your access to competitive information will vary. Competitors that are publicly traded may have a significant amount of information available. Competitive information may be limited in situations where your competitors are privately held. If possible, you may want to take on the task of playing the role of a potential customer and gain information from that perspective.
Discuss how your service offering compares to the others. For example:
Discuss how you are positioned in the market.
Think about specific kinds of benefits, features, and market groups, comparing where you think you can show the difference your company provides relative to your competition.Explain the general nature of competition in this business, and how the customers seem to choose one provider over another. In the restaurant business, for example, competition might depend on reputation and trends in the high-end part of the market, and on location and parking for a fast food restaurant. In many professional service practices, the nature of competition depends on word of mouth because advertising is not completely accepted.
All of this is the nature of competition. These considerations provide focus to your competitive analysis:
The goal of the competitive analysis is to better position your organization to leverage your competitive edge. How is your company different from others? In what way does it stand out? Is there a sustainable value that you can maintain and develop over time? For example:
Business plans should incorporate a section addressing the competitive analysis. Business Plan Pro by Palo Alto Software is one example of how the competitive analysis is integrated into the plan. This information and perspective is then used to build a more comprehensive competitive business strategy.
Originally published on Bplans.com.
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