Wjy worry about competition?

Not too many years ago, if your products or services were unique and there was no competition within a 15 or 20 mile radius, you were able to maintain a very profitable business. As shopping center after shopping center opened, cyber retailing exploded, and franchising expanded, it became more difficult to maintain your exclusivity within a geographical area. However, if I trust in the merits of my product or services to be successful, why should I care about the competition?

Very few businesses operate in isolation without market competition. Direct and non-direct competitors are trying to convince customers to buy their products or services rather than yours. There may also be indirect factors impacting customer choice. It is in your best interest to attempt to learn more about the companies that are trying to reduce your take-home pay. Knowing the competition enables you to get a competitive advantage.

List the strengths and weaknesses of each of your competitors. Talk to friends, visit your competition, call for information about their products or services, and analyze how they advertise.

Next, take a sheet of paper and list each of the major competitors and give each a rating of 1-10, for product or service quality, process, advertising, and customer satisfaction. You can add other ratings that you feel are important.

You can now use the competitive analysis to make decisions relevant to your strategic marketing plan (an integral part of your business plan). Your marketing plan will guide you toward the right decisions in the areas of pricing and advertising. It will also help you to increase your company’s customer satisfaction rate (which usually shows up as a weakness in many firms). Finally, it can help you make the right decision in customer and product segmentation.

In summary, it is impossible to produce a realistic marketing and business plan without knowing your competition.

Richard Strug
Greater Princeton Area SCORE (Chapter 631)
Serving Mercer and Middlesex Counties