A key to the success of your business is establishing your share of the market. In this section you will identify your competitors and compare your business to your three major competitors. Be honest with yourself. The purpose is to help identify areas where you have a competitive advantage as well as areas for potential improvements. You will have to do some leg work and research but don’t short cut this step. It is very important to know your competition well.
The goal is to demonstrate how the industry you are entering offers profitability and high-growth with lower barriers to entry.
What is an Industry?
An industry is the collection of competitors that produces a substitute or similar services or products to a defined market.
Identify Your Competitors
Competitors name | Location | Estimated market volume | Estimated market share (%) |
Tip: Companies can have thousands of competitors. If this is the case, categorize them for analysis. If you have under 10 competitors, focus on 3 to 5 in detail.
Competitive Analysis Involves Understanding the Value Proposition of Each Competitor
1. If this is an existing business, has your competition’s market share recently changed dramatically? If yes, why?
Competitive Analysis Needs to Cover the Intensity of Competition in Aggressiveness and Geographic Reach
2. What is the intensity of competition in your target market?
High?
Medium?
Low?
3. What makes your business’s product or service different from the competition?
What Features or Benefits Differentiate Your Product or Service vs. The Competition
4. Do your competitors offer a broad or narrow range of products or services?
5. Do your competitors concentrate on quality or volume?
6. Are your competitors’ prices considered low, medium, or high?
Conclusions from Analyzing the Competition
- Which competitors are a threat and need to be frequently watched?
- What are the competitive vulnerabilities that need to be addressed?
- What can your firm do better than any competitor?
- Does your company have a competitive edge?
- How does it compare to competitors?
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