Competitive Analysis
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Every business has competition and
prospective business owners ignore
competitors at their peril. Unless a business
has an absolute monopoly on a life-essential
product, there will be competitors offering
alternative and substitute products and
services. That level of competition is revealed
in the competitor analysis section of your
business plan.
A competitor analysis is an important
requirement in any business plan because it
(a) reveals the organization’s competitive
position in the "market-space", (b) assists you
to develop strategies to be competitive, and
(c) partners and other readers of the business
plan will expect it.
If you ignore or minimize the impact
competition will have on your business
prospects, then you have an unrealistic
business plan.
After giving some background about the type
of competitors your business will face, this
exercise helps you identify and analyze your
major competitors -- those most likely to
impact on the success of your business. The
analysis uses a variation of SWOT, a popular
strategic planning tool, to help you identify
strengths and weaknesses of competitors,
and then opportunities and threats for your
business. The exercise concludes with a
statement of your agency’s sources of
competitive advantage in the health care
marketplace.
The exercise outline is:
Who is Your Competition?
--Identifying your competitors
--Finding your competitors
Analyzing Your Competition
--Creating a competitor analysis grid
--Writing up the results of your analysis
--Web site critiques
Defining Your Competitive Position
Who is Your Competition?
Identifying your competitors: The first step in
conducting a competitor analysis is to identify
your competitors. Begin this process by
considering the range of competition in your
market-space because not all competition is
the same, there are different types of
competitors your organization will face.
Direct competitors are businesses that are
offering identical or similar products or
services as your business. These are
organizations that customers can easily buy
from instead of from you, so these companies
represent your most intense competition.
Additionally, they have some degree of first-
mover advantage that you will have to
confront.
Indirect competitors are businesses that are
offering products and services that are close
substitutes. These competitors are probably
targeting your markets with a same or similar
value proposition, but delivering a different
product. A classic example is a survey General
Motors conducted of new Corvette car buyers.
When asked what products the buyers
considered instead of a Corvette, the usual
sports cars were on the list, but so was the
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