How to Write a Business Plan

ChApter 8 | WRITE YOUR MARKETING AND PERSONNEL PLANS | 141

Competition Analysis

When customers consider patronizing your
business, they fi rst consider whether or
not you can solve their problem. But they
don’t stop there. They also compare your
business with other businesses.
It’s helpful for you to make a similar
comparison so that you understand how
your customers think. This exercise, as any
exercise in the marketing area, requires
some mental gymnastics. Your job is to
place yourself in your customers’ frame
of mind and objectively compare your
business to the competition.
Sometimes business owners let their
personal prejudices taint their opinion of
a competitor. If your competitor provides
a larger selection of merchandise or better
service and lower prices than you, it won’t
matter much to your customers that you
don’t like the other business’s television ads
or think it has ugly delivery trucks.
Think for a moment about the decisions
your customers face. What specifi c
methods can they use or places can they
go to solve their problem? Incidentally,
some of these places and methods may not
involve a competing business. Customers
do things for themselves or get their
needs solved from friends, community, and
government agencies or other sources.
First, identify the most likely three
ways your customers are going to solve
their needs in addition to your business,
and make a note of each. These are your
principal competitors. To be thorough,

write a short statement of each competitor’s

main strengths and weaknesses. Remember

to place yourself in the mind of your

customers when you do this exercise.

In the accompanying example, note that

Antoinette grouped her competitors instead

of treating each store separately, because

some stores are very similar. You might

choose to group your competition or list

more than three competitors.

Antoinette’s Dress Shop:

Strengths and Weaknesses

of Th ree Competitors

Department stores. Bagnin’s, Jerry’s,

Glendale’s.

Principal strengths: Wide selection of

merchandise.

Principal weaknesses: High prices,

inconvenient hours, no alterations.

Latest fashion stores. Wild Th ing, Marian’s,

Golden Frog.

Principal strengths: Fashion conscious,

frequent new styles, low prices.

Principal weaknesses: Casual wear

only, don’t cater to mature women, no

alterations.

Specialty stores. Lady Esquire.

Principal strengths: Sells our style

merchandise to our type customers.

Principal weaknesses: High prices,

employees have reputation as snobs,

alterations take a long time.