There are three rules to writing a business plan;
- Keep it brief.
- Know your target.
- Identify and organize the key components.
Competitive analysis is one of the significant elements in writing a business plan. Its primary focus is understanding your competitors as well as the market in general. Also, it helps people account for future changes and formulate strategies that can save a company from failing.
In a competitive market, many organisations struggle because they are not aware of what their competitors are offering to the market. Come up with a good business plan that can predict future changes. Begin by identifying who your current competitors are; if you are operating locally, you should already know your rivals. If you are setting up business in unfamiliar territories and wish to avoid expensive market research, use the internet to gather information on other geographical locations. Also, identify future opponents that might enter the market unexpectedly. How? By analyzing the market environment; if the following conditions exist then, new competitors will emerge.
• Little competition
• Lack of barriers to entry.
• The rate at which the market is growing (usually, rapid growth attracts new competitors)
• Low supply and high demand open a portal of opportunities to potential sales opportunities.
Gathering information about your competitors is time-consuming, you can opt to visit their premises, check their website, or evaluate their marketing strategies. Every organization has objectives including small enterprises. If a firm’s target is to obtain larger market share, their marketing techniques will be top notch. Here, a company will work towards improving their brand, promoting products, and extending offers among others. On the other hand, profit-oriented businesses invest in customer satisfaction as well as employees. They focus on meeting customer needs through providing excellent services and motivating employees. Such information helps with creativity and generation of unique ideas to include in your business plan.
When writing a business plan, attention must be made to your competitor’s strengths and weaknesses. Why? They will help you identify key opportunities and threats. For instance, if company A (your rival) is selling the same product at a higher price, that can be an opportunity. Ensure that your plan suggests making rational decisions instead of impulsive ones. Competitive analysis helps you take advantage of your competitor’s vulnerabilities and uses it to improve your strategy. Therefore, use direct competitors for your final report because they pose more risk than those out of range. Most investors pay attention to this section because it holds the key to a successful business.
Competition is everywhere; it is not advisable to ignore smaller businesses. If they offer the same services as you, then they qualify as rivals. For instance, Blockbuster LLC was once a popular entertainment enterprise: today, the likes of Netflix and Hulu have the video rental market because the technology is lower cost per use and convenient. The bottom line is, writing a business plan should accommodate diversity with regard to competition, potential threats; you never know when the change will come.
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