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Competitive
athletes know that checking out the competition is as important as eating
right, training and assessing their own strengths and weaknesses. Businesses
that want to win have to get their head in the game as well. Evaluating and
identifying your competition reduces risk, decreases money spent, clarifies
necessary resources and saves you valuable time.
Customer
demand for quality service and product runs high and sometimes blurs the
lines of competition. Consider your local pizza parlor - it does not just
compete with other pizza parlors, it competes with fast food chains,
delivery services and ethnic restaurants. Everyone is fighting to feed the
discerning consumer who is looking at price, flavor and convenience.
To
succeed and get the most out of its marketing efforts, a company has to
first make some critical decisions and close the gap on the range of
competition. It’s a mistake to try and be too much to too many people. In
this marketplace, the winners exercise honesty with themselves and their
customers about what they offer and whom they serve. Before you analyze your
competition, clarify what your business does
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What
industries is my business in?
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What
products and services do we offer?
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What
brands are in direct competition with mine?
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Where
do we do business?
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What
are our channels of distribution?
While
identifying your competitors can be challenging, it doesn’t have to be.
You can break them up into three categories: direct, indirect and
occasional.
Direct
competitors are the specific brands or companies you feel tugging at
your customers every day. They compete in the same geographic area as you do
and they market a similar product or service. A small hardware store is in
direct competition with other hardware stores within a certain driving
distance for customers.
Indirect
competitors are those that belong to a different business category,
operate in a more remote location but offer a similar service or product.
The same hardware store mentioned above is in indirect competition with a
local large discount store, a more remote mail order catalog and an online
supplier that sell the same tools and equipment. These competitors may very
well be taking money and potential customers away from the hardware
store.
Occasional
competitors are not to be misunderstood as occasionally competing for
your business. Instead they are to be seen as those companies who appeal to
a similar interest of your customers or clients. For example, the hardware
store customer might purchase from the store with a home improvement in mind
or they might make a purchase with a hobby that requires certain tools in
mind. On the occasion that the customer is purchasing home improvement
items, other home improvement stores can be seen as occasional
competitors.
Likewise,
when the customer has the occasion to spend money on his/her hobby, hobby
stores would be considered the occasional competitor.
Once
you have a sense of who is vying for your customers, you can make more
strategic decisions about how to appeal to current and potential customers.
Look at how your competitors do business and how you capitalize upon their
methods. Analyzing the situation gives you a leg up on the competition and
you can use the information to make sure you’re the obvious choice to
consumers.
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