To complete a comprehensive competitive analysis, you must understand the competitive landscape. You must know who your competitors are. Prepare an overview of your competitors, their strengths and weaknesses. Place each competitor’s product in front of their products. Understand the needs and preferences of the customer you are competing for.
When considering your competitors, determine what are the similarities and differences between their products and yours. You also need to consider how their prices compare to yours and how well they are doing. You must have a specific plan to compete. For example, you can offer better quality services, lower prices, more support, or easier access to services. It should address the following basic issues:
o Define your target market.
o Determine the size of the target market.
o Drill down into your specific segment within the target market.
o Define the size and revenue opportunity your segment represents.
o Determine how fast the overall market and your specific segment are growing.
o Learn which factors are most important to your customers, such as price, technology, ease of use, or new uses.
o You must know the most important characteristics of your industry. Is it driven by high or low volume? Is it capital or labor intensive? Is it seasonal?
o Identify and profile your target customers by their consumption budgets and by how they make decisions to buy a product.
o Identify your direct and indirect competitors and understand their impact on you.
o Identify the characteristics that differentiate your product from the competition.
To tackle the core issues, you need to know where to find competitive and industry information. Information is available from the Federal Commerce Department online or at the library. You can check Edgar Online and business websites for the required financial documents. Look for an industry trade association and industry publications. Go to Hoovers Online or Bacon’s to search for trade publications in your industry. You can also check online http://www.usdata.com or for North American industry classifications http://www.naics.com.
Once all the basic issues have been addressed and your competitive research completed, you should be able to describe all of your competitors and their strengths and weaknesses. You should be able to clearly articulate what is different about your product and why customers will choose your product over the competition. You should also be able to describe your target market and target customer and what will motivate them to buy your product. Lastly, you need to be able to explain how you will achieve and maintain a sustainable competitive advantage.
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