In this section of the elements of a business plan, the subject of competitive analysis is dealt with in detail. All businesses will have to face competition in some form. Whereas some competitors may sell products that are similar, some others may sell products that serve the same function. It is, therefore, important to establish in the business plan as to where you stand as far as competition is concerned because established businesses are likely to view the entry of a new business into the market seriously. Moreover, a properly drawn out competitive analysis will serve to support the claim about the potential of the business for securing an investment.
When dealing with the competitive analysis, which is one of the key elements of a business plan, define the competitors and meticulously profile them. The competitors are to be assessed in terms of not only their strengths, but also weaknesses. A thorough understanding of the operations of its competitors will enable the business to judge its position in the market in relative terms. When establishing the market position of the business, the following aspects have to be kept in view:
The customer profile and needs that were created in the section on marketing strategies.What the competitors are doing to meet the needs of the customers.What the new or expanded business is planning to offer.The competitive advantage of the business.
In order to establish the market position of the business through competitive analysis, one of the important elements of a business plan, there are two ways of identifying the competitors. The first option is to group all the competitors by market share and the second option is to group them according to competitive strategies employed by them. After grouping the competitors suitably, an analysis of their strategies can be carried out to determine their strengths and weaknesses. Typically, the analysis will reveal the presence or absence of key assets as well as skills that are essential to establish a position in the market place.
The key skills and assets required to compete in the market place can be determined by focusing efforts in four major areas as recommended by David A. Aaker in his book ‘Developing Business Strategies’. The four areas that are required to be looked at in order to lay out the competitive analysis as part of the elements of a business plan are:
Primary factors that motivate customers,Major cost components,Mobility barriers in the industry, and Reasons that contribute to the success of a business.
A competitive analysis will enable the business to develop its marketing strategy that provides specific advantages over the competition. It is a good idea to create a strength grid in terms of all the key skills and assets of the business with respect to its competition which make it absolutely clear to the readers of the business plan as regards the market standing of the business.
Summarizing, this section of the elements of a business plan must make it clear to the readers that the business is well positioned in the market place to not only handle most of its nearest competitors, but also to maintain a watch on them.
When dealing with the competitive analysis, which is one of the key elements of a business plan, define the competitors and meticulously profile them. The competitors are to be assessed in terms of not only their strengths, but also weaknesses. A thorough understanding of the operations of its competitors will enable the business to judge its position in the market in relative terms. When establishing the market position of the business, the following aspects have to be kept in view:
The customer profile and needs that were created in the section on marketing strategies.What the competitors are doing to meet the needs of the customers.What the new or expanded business is planning to offer.The competitive advantage of the business.
In order to establish the market position of the business through competitive analysis, one of the important elements of a business plan, there are two ways of identifying the competitors. The first option is to group all the competitors by market share and the second option is to group them according to competitive strategies employed by them. After grouping the competitors suitably, an analysis of their strategies can be carried out to determine their strengths and weaknesses. Typically, the analysis will reveal the presence or absence of key assets as well as skills that are essential to establish a position in the market place.
The key skills and assets required to compete in the market place can be determined by focusing efforts in four major areas as recommended by David A. Aaker in his book ‘Developing Business Strategies’. The four areas that are required to be looked at in order to lay out the competitive analysis as part of the elements of a business plan are:
Primary factors that motivate customers,Major cost components,Mobility barriers in the industry, and Reasons that contribute to the success of a business.
A competitive analysis will enable the business to develop its marketing strategy that provides specific advantages over the competition. It is a good idea to create a strength grid in terms of all the key skills and assets of the business with respect to its competition which make it absolutely clear to the readers of the business plan as regards the market standing of the business.
Summarizing, this section of the elements of a business plan must make it clear to the readers that the business is well positioned in the market place to not only handle most of its nearest competitors, but also to maintain a watch on them.
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