Competitive analysis is a process of evaluating businesses that present some form of competition to your product or services for a share of the market. This process involves examining the products, practices, trends and the strength and weaknesses of the competing businesses. Competitive analysis is important as it enables a business to determine its position in the market and to identify strategies for improving products and perception of the market towards the company. This process helps you to identify which products compete with yours and advantages and disadvantages of your products in relation to your competitors.
Conducting competitive analysis puts a company in a position to identify ways of attracting new customers and maintaining the existing ones. Competitive analysis also gives you a realistic view of your competitors giving you an opportunity to identify areas of improvements that will give you a competitive edge. Conducting an effective competitive analysis also helps you to foresee market changes and demands. This will then help you to adjust your business processes to suit the new market demands.
Competitive analysis presentation appears in the marketing section of a business plan. It aims at providing an indication to the bankers or potential lenders that your business is aware of the competitive environment and has strategies that will ensures it has an edge over its competition. What types of business form part of your competition? Who are the owners? What strategies do they use? and how are they perceived in the market, are some of the questions that the competitive analysis section of a business plan seek to answer.
|Factor||My Business||Strength||Weakness||Competitor A||Competitor B||Importance to Customer|
|Products||Detergent, toothpaste, jelly and body oils and other household commodities||Have a wide market and are necessity products||Suppliers are also many therefore stiff competition||Detergent and toothpaste||Body oils, jelly and other cosmetic products||Customers require products that are meet their needs.|
|Price||Fair prices determined used margin pricing method||Has attracted many new clients to the business||Lower margin per item sold||Prices relatively high||Relatively high prices||Customers want value for their money|
|Reliability||Product always available in the right quantity and quality||Efficient production systems, human resources and distribution channel||Products limited to one region only||Limited distribution channel||Nationwide coverage,||Client want products that they can trust and depend on|
|Expertise||Have the most qualified human resource||Provide quality products and services||Are expensive||Fairly trained workers||Fairly trained employees||Clients look for competence in production and service provision|
|Company Reputation||Good reputation in terms of it products, ethics and practices||Good relationship with the client||
|Tainted image due to how it treats its customers and employees||Relatively good reputation.||Customers associate with companies having good reputations.|
|Location||Centrally placed in the region town||Sense of belonging among the regional market||Limited access to the national market||Operations nationally located with no operation in my area, only distribution units||Regionally absence only distributions channel||Clients wants products and companies they can associate with and have a sense of ownership|
|Appearance||Products well packaged||More appealing to the consumers||Expensive||Fairly well packaged products||Well packaged products||Customers love products that are appealing and attractive|
|Sales Method||One off selling||Fast, effective and less costly||Limited personal relationship with the customers||One off selling||One off selling||Client would like selling method that will deliver products to him with ease and convenience|