Latest Post -
  • 3 Ways To Up Your Web Content And Up Your Game
  • Analyzing Your Competitive Landscape

    22 October 2009

    CompetitorEvery business plan should include a comprehensive overview of your business’ marketplace competition. Competition means there is a market for your business and, despite what some may argue, it’s healthy to have one or more competitors. Any business that provides a similar service or product in the same region may be viewed as a primary or secondary competitor. Your business needs to highlight and build upon the weaknesses of its competitors to increase its profitability and market share. The following provides a step-by-step process in creating your competitive analysis.

    Identifying competitors: One easy way to locate competitors is to use a Google or Yahoo! map. Enter in your business’ proposed or existing address and search for nearby businesses of a similar category. For example, if you’re opening a pizzeria, you can search “pizza shops” or “pizzerias” in the same zip code or city. Through this easy process, you’ve identified potential competitors. If your business operates in a niche industry, the best way to identify competitors is to leverage established contacts and web research.

    Understanding your competition: Now that you have identified your top competitors (aim to analyze at least two direct competitors), it is necessary to learn everything about these companies. What do I mean? Visit their website; call the business directly to learn more about the way they operate or what they sell; physically go to the competitor’s place of business; and research customer reviews. The latter step can be implemented by simply typing in “customer reviews of XXX” in your online search bar. Also, these reviews usually are posted on websites such as Yelp.com and CitySearch.com.

    Pointing out their weaknesses and strengths (eloquently): Lesson to be learned – no bashing on competitors; it is unprofessional and makes your business look worse. When I say bashing, I mean using expressions such as “they suck” or “they have no customer assistance.” Every company has some element of customer service, so a statement like that is literally untrue. Now, the competitor may lack quality customer service, and such an observation would be a much more acceptable approach in pointing out a weakness in a business. When I am writing a competitive analysis, I always include one to two strengths and two to three weaknesses of each competitor.

    Your competitive advantages:
    Ah, finally, we’ve reached the point of emphasizing your strengths. Truly use this section to emphasize why you’re a better business in a bulleted format (preferred) and include a few statements in paragraph form about how you intend to surpass your competition. Examples include greater industry knowledge, lower prices, friendlier and more attentive staff, larger inventory of products, and so forth. Your best bet is to underscore your own unique competitive edge that cannot be argued. Voila, you’ve completed your competitive analysis.

    Ellen ArndtThis is a Guest Post by Ellen Arndt, Director of Marketing and Research Writing for EPIC Business Planning.

    , ,

    6 Responses to Analyzing Your Competitive Landscape

    1. Lee Brinn October 22, 2009 at 7:37 am #

      Thanks for the business planning tweets and posts! When planning a new adventure I always like going back to the foundation work and putting our ideas under the microscope. Spending is a HUGE pitfall for so many new businesses and a smart business plan will keep spending and projected revenues in perspective. This seems like the simplest way to check your ego and product simultaneously.

    2. Tampa Acupuncture October 30, 2009 at 4:43 am #

      Good information about analysis competitor. Identify the competitor & pointing their weakness & strength are good points. Thanks for information.

    3. C Hydro January 29, 2011 at 12:56 am #

      A good reminder of the fundamentals. Thx!

    4. jsilen September 1, 2011 at 3:08 pm #

      Good points on understanding the competition and the competitive advantage that’s unabashed yet assertive.

    5. Ellen Arndt October 24, 2011 at 2:33 am #

      Thanks guys! I wish you all the luck in your business endeavors. As a professional business plan writer, I can’t tell you HOW many times clients have told me that they have no competitors. My argument? I say competition proves that there is a market for your product or service. Without competition, the need for what you’re selling is weakened tremendously by way of common sense.

    6. FranchiseClique November 14, 2011 at 8:14 am #

      This article is perfect for people looking to learn about competitive research fundamentals! It is obviously labor intensive and if you feel like you might need help, franchising might be the answer for you. Much of the competitive research is done, or the franchise’s support network helps you conduct it.

    Leave a Reply