Direct competitors are those that are selling the same products, and indirect competitors are those that serve the same market.
Knowing who your competitors are is an element of great value when preparing your business plan. It will also allow you to overcome obstacles they have encountered to get to where they are now. It is useful to know what the competition is doing, but it will also help you know what strategies are good to implement in your business.
One of the objectives of analysing the competition is to save you time and money in the future. Customers look for a mixture of price, product features, location, service levels, etc. However, it is unlikely that customers will select the same combination of these options. Competitors that have been longer in the market will have more experience in positioning their business to offer a unique mix of options to the target market. By positioning your business to offer a unique mix of options, you will reach a different type of consumer in a shorter period of time.
First look for answers to the following questions.
- Who are our competitors? And our potential competitors?
- How long have they been established, and what is their position in the market?
- What are your short-term and long-term business goals?
- What are your short and long-term strategies?
- What are your weaknesses and strengths?
The ultimate aim of analysing your competitors is to predict market responses to changes in competitive strategies. It will help you minimise the risk and assist with a successful implementation of your own strategies.
Lack of understanding of competitors will lead to costly marketing errors, with harmful financial implications.
For an impartial view of your business’s unexploited areas, contact Flourish to get your FREE Business Performance Assessment.