The Competitive Analysis section of your business plan is devoted to analyzing your competition--both your current competition and potential competitors who might enter your market. Every business has competition. Understanding the strengths and weaknesses of your competition--or potential competition--is critical to making sure your business survives and grows.
The Competitive Analysis section of your business plan is devoted to analyzing your competition--both your current competition and potential competitors who might enter your market.
Every business has competition. Understanding the strengths and weaknesses of your competition--or potential competition--is critical to making sure your business survives and grows.
While you don't need to hire a private detective, you do need to thoroughly assess your competition on a regular basis even if you only plan to run a small business. In fact, small businesses can be especially vulnerable to competition, especially when new companies enter a marketplace.
Competitive analysis can be incredibly complicated and time-consuming Here is a simple process you can follow to identify, analyze, and determine the strengths and weaknesses of your competition.
Profile Current Competitors First develop a basic profile of each of your current competitors. For example, if you plan to open an office supply store you may have three competing stores in your market. Online retailers will also provide competition, but thoroughly analyzing those companies will be less valuable unless you also decide you want to sell office supplies online.
Although it's also possible that they--or, say, Amazon--are your real competition. Only you can determine that. To make the process easier, stick to analyzing companies you will directly compete with.
If you plan to set up an accounting firm, you will compete with other accounting firms in your area. If you plan to open a clothing store, you will compete with other clothing retailers in your area. Again, if you run a clothing store you also compete with online retailers, but there is relatively little you can do about that type of competition other than to work hard to compete in other ways: Once you identify your main competitors, answer these questions about each one.
It's easy to identify weaknesses in your competition, but less easy and a lot less fun to recognize where they may be able to outperform you: What are their strengths?
Price, service, convenience, extensive inventory are all areas where you may be vulnerable. What are their weaknesses? Weaknesses are opportunities you should plan to take advantage of. What are their basic objectives?
Do they seek to gain market share?
Do they attempt to capture premium clients? See your industry through their eyes. What are they trying to achieve? What marketing strategies do they use? Look at their advertising, public relations, etc.
How can you take market share away from their business? How will they respond when you enter the market?
While these questions may seem like a lot of work to answer, in reality the process should be fairly easy. You should already have a feel for the competition's strengths and weaknesses To gather information, you can also: Check out their websites and marketing materials. Most of the information you need about products, services, prices, and company objectives should be readily available.
If that information is not available, you may have identified a weakness. Take a look around. Check out sales materials and promotional literature.
Have friends stop in or call to ask for information. Evaluate their marketing and advertising campaigns. How a company advertises creates a great opportunity to uncover the objectives and strategies of that business.
Advertising should help you quickly determine how a company positions itself, who it markets to, and what strategies it employs to reach potential customers.
Search the Internet for news, public relations, and other mentions of your competition.Assigned to write a dynamic business profile without a proper format for the company you are working in? If so then don’t worry much and scroll down the page to have a look at preview of business profile template which is particularly prepared for you to help in this regard.
Business profile template provides you a comprehensive format and roadmap to complete a business profile . Rather than fall victim to analysis paralysis, simply start by ensuring the small details of your profile are in order. For more tips on setting up your profile, check out our guide on how to write .
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