More Information About Starting Your Small Business
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Competitive Analysis |
Business takes place in a highly
competitive, volatile environment, so it is important to understand
the competition. Questions like these can help:
- Who are your five nearest direct competitors?
- Who are your indirect competitors?
- Is their business growing, steady, or declining?
- What can you learn from their operations or from their advertising?
- What are their strengths and weaknesses?
- How does their product or service differ from yours?
Start a file on each of your competitors including advertising,
promotional materials, and pricing strategies. Review these files
periodically, determining how often they advertise, sponsor promotions,
and offer sales. Study the copy used in the advertising and promotional
materials, and their sales strategies.
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What to address in your competitor
analysis |
- Names of competitors - List all of your current
competitors and research any that might enter the market during
the next year.
- Summary of each competitor's products - This
should include location, quality, advertising, staff, distribution
methods, promotional strategies, customer service, etc.
- Competitors' strengths and weaknesses - List
their strengths and weaknesses from the customer's viewpoint.
State how you will capitalize on their weaknesses and meet the
challenges represented by their strengths.
- Competitors' strategies and objectives - This
information might be easily obtained by getting a copy of their
annual report. It might take analysis of many information sources
to understand competitors' strategies and objectives.
- Strength of the market - Is the market for
your product growing sufficiently so there are enough customers
for all market players?
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Ideas for gathering competitive information |
- Internet - The internet is a powerful tool for finding information on a variety of topics.
- Personal visits - If possible, visit your competitors'
locations. Observe how employees interact with customers. What
do their premises look like? How are their products displayed
and priced?
- Talk to customers - Your sales staff is in
regular contact with customers and prospects, as is your competition.
Learn what your customers and prospects are saying about your
competitors.
- Competitors' ads - Analyze competitors' ads
to learn about their target audience, market position, product
features, and benefits, prices, etc.
- Speeches or presentations - Attend speeches
or presentations made by representatives of your competitors.
- Trade show displays - View your competitor's
display from a potential customer's point of view. What does their
display say about the company? Observing which specific trade
shows or industry events competitors attend provides information
on their marketing strategy and target market.
- Written sources:
General business publications
Marketing and advertising publications
Local newspapers and business journals
Industry and trade association publications
Industry research and surveys
Computer databases (available at many public libraries)
For More Information on This Topic:
SBDC
Net Industry Information
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