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Competitive Analysis

Posted on 27 October 2017 by admin (0)

Business is a dog eat dog environment. Yes, you may have some great friends in the same industry on a local basis. But, you want to dominate your space no matter who you’re competing against. Most of the times all personal relationships are out the window in a direct competition on product or services. One of the first things you need to do is get a lay of the land and figure out where you best fit in the market place.

 

SWOT Analysis

Strength, Weakness, Opportunity, Threats

A fantastic way to do this through a S.W.O.T analysis. These are commonly done by large organizations on an annual basis. However, even in a local service business it is important to do this as you get started and revisit it every couple years or when appropriate.

Strength-

In this section clearly identify what your company’s strengths are. It could be innovation, cost, processes or Key Individuals among other. Have your strengths identified against your competition will help clarify your messaging and the direction of your company.

Weakness-

As important as knowing what you do good is what you do not do good. Rather the areas you need improvements or areas to outsource. Either way having them defined helps you develop a plan to improve. Maybe it’s an area such which you don’t plan to improve, and the better strategy is to outsource to a partner.

Opportunity-

You obviously saw an opportunity to succeed when you started your business. Here you will want to clearly identify what your focus is, and that focus should be around the biggest opportunity in your market. Giving you the biggest chance for success

Threats-

Threats come in many forms from competition to varying state and industry regulations to other legal requirements and buyers’ environment. In most industries there are things you need to do to legitimize your business and operate in each geography. Make sure you know the rules and regulations and comply. But other threats to consider are how are buyer habits changing? How are regulations changing? If these things change how does that threaten our business?

Define these threats and have a plan in place to pivot your operation if needed. The important part about this step is that you are aware that outside forces can impact your business and you are mitigating those effects as much as possible.

 

Competitive Matrix

Another helpful thing to do is to lay out a matrix where you can rank each competitor including yourself. You should have a four-quadrant graph which has left to right cost and top to bottom quality. The intersection of all four quadrants is in the middle or neutral while the top and right are at the high end of the scale. This strategy helps you determine where your competitors are competing and where you should or would like to compete.

 

These steps can seem overwhelming and even seem unnecessary to a startup local business. Even on a small-scale business these planning activities save you time, money and stress. You don’t need a perfect plan, but you need a starting point, and this should get you on your way.

We recently completed these steps on a business with a local Boise pest control service. You would be surprised the results. Even something as simple as pest control you will find gaps in competition and and a wedge into your marketplace. We had determined the competition was not serving a certain geography and demographic which was commercial properties. So we were able to shift focus and obtain some great accounts. The owner know feels like they are on a winning trajectory.

So no matter your industry take the time to analyze your company, the competition and the market place. You will absolutely be surprised what you find

 

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