“I have been up against tough competition all my life. I wouldn’t know how to get along without it.”
– Walt Disney
If you’re running a business, I’m sure you know your competition. So this chapter is just a refresher, with perhaps a reminder or two to give you a fresh viewpoint. And if you’re just starting a business, this will help you organize your approach to competition and positioning. For a business plan event, this chapter will help you cover the bases as you prepare a pitch or a formal plan. As with the previous chapter, I have to almost-repeat my introduction. If you’re like most business owners, you know your competition. You don’t need this chapter to set your strategy and tactics. Still, an annual fresh look at the competition is a good idea, and this chapter might help you with that.
Whether it’s pitch or plan, your target people want to know who competes with you for your customers’ time and money. They will want to know whether they are directly selling competitive products and services, substitutes, or possible substitutes; and their strengths and weaknesses, and their positioning in the market.
Important: Never suggest to an investor that you don’t have competition; not in your formal plan, not in your pitch, and not in any summary. Most investors take that as an indicator of lack of experience. Every good business has competition. If it’s so new that it doesn’t have competition today, if it’s an interesting business, then it will have competition tomorrow. In that case, competitive analysis guesses which big competitors will enter the market. Furthermore, there is also the suspicion that a business has no competition because it’s not really a good business to enter.
The competitive analysis relates to strategy, tactics, product, market, and marketing and product plans. That makes it tricky to place within the summaries, pitch, or formal plan document. When you get to dressing up your plan, I suggest you first decide where to put your competitive analysis, in whatever order works, such as in the market analysis, marketing plan, or product topic. Then you consolidate the discussion in that one place and refer to it, with links in the electronic or online versions, and in the other places it comes up.
This chapter includes two additional topics: