Business competitorsWhen assessing your industry and your business, take a look at your competitors. Try and understand what it is they are doing and how successful/unsuccessful they are. This will help you to learn more about what you need to do to grow your business and then to include this in your business plan.

When you stop and think about the product or service that you are offering, you will be surprised when you realize how many other businesses are out there trying to get the ‘almighty dollar’ from one of your potential customers for the same or similar product.

One of the reaons why you should take the time to understand your competition is to know how they promote their business. Where they advertise and how often. Find out what their product range is and how it differs from what you offer/plan to offer?

One of the best ways to begin the process of identifying and ultimately researching your main competitors is to brainstorm your business. By thinking about the different aspects of your products and services, you can think about other businesses either locally positioned against yours, or competing via the Internet.

Ask yourself:

  • Where could my customer purchase the products and services that I provide?
  • How much would they pay at these outlets for these products?
  • What makes these outlets different to my business?
  • How can I highlight my Point of Difference to the customer?

To give you an example of this brainstorm, have a look at Steve’s efforts. Here you can see that he thought of all the possible outlets his customer could purchase from. From this list he identified those businesses that were his competitors, providing a similar shopping experience to a similar customer.

Top Shelf Groceries – Competitor Brainstorm

competitor brainstormClick the image to enlarge it.

As you can see from this diagram, Steve has number of competitors. How many competitors does your business have? Go ahead and do the brainstorm now.

Once this is complete, you will have a picture about who your competitors are. You will now need to find out how much market share these competitors have, and what threat, if any, they have to your business.

Market Share refers to the amount of the available market, or customers, that this business services. If the total available market for your product was 100 people, how many people shop at each of these competitors? The size of their market share is a good indication of their success and potential threat to your business.

To do this, separate your competitors into categories. For example, Steve had three other outlets similar to his, in terms of size and industry (small grocery stores). The others he was able to place into the large supermarket industry.

Once he did this, he was then able to research these industries, and gain an idea about their market share of the overall sales from grocery items.

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