Getting to know the competition is one of the most important components of starting a successful business. Knowing the competition can help a new business understand what works to bring in customers, what are the current fair market prices, and how best to market a product/service. It is crucial to not copy the competitors but to take the knowledge learned from them and make a product/service stand out from theirs. Additionally, knowing and understanding the competition is a major component needed when creating a well written business plan.
There will always be some sort of competitor out there; the chances of there not being one are extremely rare. Finding the competition can be as simple as researching them through Google or Yahoo. Another tactic is to research keywords that are relevant to a particular business, service or product. Then research the companies that come up under those keywords. The Internet has made researching the competition convenient. Even if the companies are only on a Yellow Pages site, it will give an address or phone number to reach them at. If it does happen that a small local competition has no website or social media sites, one would have to take a more direct approach to know them. This could include: shopping with them, get a price list, listen to their sales pitch, get on their mailing list, check out their advertisements, and look the company up on the Better Business Bureau website.
When searching for competitors, remember to think about companies that can be used as substitutes. In other words, do not define the search too narrowly. It is good practice to define the competition more broadly and look for any company that is a close substitute that could possibly have a better product/service for the same market. Finally, do not just research competitors when initially setting up a business, continuously watch for new competition and competition that may be making a similar product/service better and/or cheaper. Staying vigilant in this area will help keep a business on top of their market and not be surprised by their competition.
Krispy Kreme versus Dunkin Donuts is a great example of competitors – check out these two pictures they promote. Which do you prefer??
For more information on how to get to know the competition, contact us at firstname.lastname@example.org.