TIME FOR COMPLETION: APPROXIMATELY 20-30 HOURS
A Competitive Analysis is an assessment of the differences between your business and your competition, as well as a detection and examination tool used to define the factors that cause these differences. This section breaks is broken down into direct and indirect competitors, and gives you an idea for how to go head-to-head with these competitors in order to reach potential customers.
What’s in It?
The Competitive Analysis first gives an overview of both your direct and indirect competitors in relationship to your business, and also gives a list of all your competitors based on this definition. In the most basic sense, direct competitors are those that sell a similar product to the same target customers as your business, while an indirect competitor is any company whose product could be a substitute for yours. This section then quantifies who the largest competitors are based on industry revenue, and outlines your company’s market share goals. After you’ve become an expert on what the competition has to offer, this section is an analysis of what unique advantages will benefit your company and what barriers to entry your company may have. Some barriers to entry may include technology, capital investment, real estate, facilities, or legal regulations.
Why’s it Important?
A Competitive Analysis is incredibly useful because it reveals your company’s true position within the market. It shows you what your competitors are doing and demonstrates to potential investors how you differ from the competition. After completing a Competitive Analysis, you will have a better understanding of your competitive advantage(s) and be able to foresee potential barriers to entering the marketplace.
Your competition can be one of your greatest sources of new ideas when starting a business. There is no need to reinvent the wheel. The successful companies in your industry have figured out what works best through years of testing and copying what works. It can only be beneficial for you to examine your competitors thoroughly in an attempt to gain insight into what is really working in your particular industry.