Addressing competitive challenge is very important because it shows that you understand your marketplace – that you understand your customers and the way that your customers think.
As the entrepreneur, you think that your product and your service is the best, and that you are offering your customers a great thing. What you need to do is to look at your products and services from the point of view of your customers. Customers don’t care about you or about the products and services that you offer. Customers have one thing on their mind when they decide to buy a product or avail of a service, they would always want the best product for them, and the best service that they can find. It is always what works for them, so this is where you must demonstrate to your customers why your products and service is the best for them.
Your have to show them how your products or services are set apart from the competition, how they are different from the alternatives.
In order to be able to set your products or services apart from the competition, you have to know the following:
● The market segments that your competitors serve
● The benefits that they offer
● The reasons that customers buy from them
● Information on your competitors’ products or services, their pricing, and promotion
These information can be made available to you by conducting a competitive analysis. Competitive analysis helps you understand the competitive advantage or disadvantage of your business in the industry. It helps you gain understanding of your competitors’ business strategies and can help you develop your own strategies so you may achieve competitive advantage in the future.
You have to identify both direct and indirect competition for your business, and start analyzing their marketing strategies to find their strengths and weaknesses. You might be able to find your competitors’ vulnerable areas which can help you gain distinct competitive advantage.
When you want to invite investors in your business, you may want to include a competitive analysis in your business plan. It shows investors that you are aware of the competition, and that you have plans in place to compete at the same level as established competitors.
An in-depth competitive analysis of your industry can help you identify opportunities for improvement within your own business. When you complete your competitive analysis, you may come up with a strategy to make the most of opportunities in your industry.
A comprehensive analysis of your competitors can allow you to track how your own business compares in terms of financial resources, logistics, staff, location, marketing tactics, market share, customers, pricing, products and services.
Handling your competition may not be as tough as you think when you review your competitors regularly and take the competitive challenges as an opportunity to improve on your own business.