Marketing Plan Writing

Add competitive analysis to your marketing plan

written by Tim Berry of Palo Alto Software


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:

  • organization size
  • market share
  • comparative product quality
  • growth
  • available capital and resources
  • image
  • marketing strategy
  • target markets
  • and any attributes you consider important.

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:

  • Your travel agency might offer better airline ticketing than others, or perhaps it is located next to a major university and caters to student traffic.
  • Your graphic design business might be mid-range in price, but well known for proficiency in creative technical skills.
  • Your management consulting business is a one-person home office, but enjoys excellent relationships with major personal computer manufacturers who call on you for work in a vertical market in which you specialize.

Discuss how you are positioned in the market.

  • Why do people buy your services instead of the other services offered in the same general categories?
  • What benefits do you offer?
  • At what price?
  • To whom?
  • How does your mix compare to others?

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.

For example:

  • Is there price competition between accountants, doctors, and lawyers?
  • How do people choose travel agencies or florists for weddings?
  • Why does someone hire one landscape architect over another?
  • Why choose Starbucks, a national brand, over the local coffee house?

All of this is the nature of competition. These considerations provide focus to your competitive analysis:

  • What factors make the most difference for your business?
  • What might make customers choose one of your types of business over another?
  • Price or billing rates?
  • Reputation?
  • Image and visibility?
  • Are brand names important or is it simply word of mouth, in which the secret is long-term satisfied customers?
  • In what segments of the market do your competitors operate?
  • What seems to be their strategy?
  • How much do they impact your business, and what threats and opportunities do they represent?

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:

  • A restaurant might have an excellent location, and/or a well-known master chef. The competitive edge might be different for any given company, even between one company and another in the same industry.
  • A graphic design firm might have a head start in Internet Web design or a programming staff as a competitive edge, which puts it ahead of most competitors.
  • An accounting practice might have a very-well-known senior partner, whose books are used as texts.

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

Tim Berry

about the author

Tim Berry

Founder and President of Palo Alto Software and a renowned planning expert. He is listed in the index of "Fire in the Valley", by Swaine and Freiberger, the history of the personal computer industry. Tim contributes regularly to the bplans blog, the as well as his own blog, Planning, Startups, Stories. His full biography is available at Follow Tim onGoogle +


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Peter Wafula January 17, 2011 at 1:37 am

Concise and captivating perspectives. Great reading

Ian November 14, 2011 at 8:22 am

Hi Peter, This article has really helped me to prepare for an interview so I thank you for that. I incorporated all of your tips into my presentation and am now awaiting the results. I'll keep you updated, Thanks again, Ian

Judy Caroll February 20, 2012 at 3:59 am

Hi Tim, Thanks for sharing your knowledge. All of us have direct competitors for the technology, product or service we're offering. Therefore, a competitive analysis will be of great help. It will guard us against other people's attacks.and help us position our business in the market. Best, Judy

Ify June 10, 2012 at 4:03 pm

What an interesting and valuable read. I wish I could turn the hands of the clock to go back to an interview I was psrt of some few weeks back where the theme was basically on competitive analysis and business plan development. If I had perhaps refreshed myself with this before the interview, I may have been the chosen candidate. i look forward to some other opportunity.

Roberta September 29, 2012 at 2:50 pm

I am doing an airplane project for school. It is going to be a luxury plane for travel to the eastern side such as Ireland, Scotland, Iceland, and Greenland. My logo will be Celtic Twins Flight. It will be for commercial flights for Business, government, leisure, and for holiday/seasonal uses. What kind of competition could my potential airline industry have? Any info would be helpful. Thank you.

Ronald Ragela December 11, 2012 at 6:28 pm

Hi, Thanks for sharing the knowledge. I have started a hardware shop in Lihir Island, Papua New Guinea. Competitive analysis is very critical because I have an established hardware to share the former employer. Ron

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Good video about writing a competitive analysis

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