Write a Business Plan – Part V

You know your market. But do you know your competition?

By Ankush Chibber

After describing your market and how you are going to tap it, your business plan should also show that you know your competition and you know how to get around it. Called a competition analysis, this will help you define your competition, what gives you an edge over it, and how you are going to stop the new competition from coming in. More importantly, it will also help you understand if you have the weaknesses that the competition can take advantage of.

Identify your rivals
You need to know who your current and future competitors are and will be. The best way to do this is to look at the market and understand who are going to fight for your customer’s buck with you. You could also look at the market approach of other competitors and scope out those whose approach will be most critical for tapping the market opposite you.

Know them
After you have identified your competition, sit down and analyze their business strategies. Look at their strengths. More importantly, look at their weaknesses. Identify how you can step in to plug the gaps they have left in the market. Understand the competition’s assets and identify the skills they have or lack to be able to grab the market. Know them better than you know your company.

Winners and losers
To know how to tap the market best, you not only need to understand how a competitor is doing it successfully, but also how somebody is not doing it. Compare the skills and assets of the winners and losers in your market. What is one doing right? How is she/he doing it? Why are others not able to do so? These are the questions you need to answer to understand what you need to do to be a winner yourself.

Shape your strategy
Once you have understood what your competition is doing right and, more importantly, wrong, shape up a strategy that will churn out skills and assets that your competition does not have. Your approach should be one that will give you an enduring edge over the competition. For that, you should be able to make what experts call a competition grid.

Make that grid
List out the key assets and skills on one side of a paper. On the header, mark out two columns of strengths and weaknesses. In each asset or skill category, place your competitors according to whether they have a weakness or strength there. Now you will understand where you stand amongst them and what assets you need.

Fix the strategy
Now that you know what assets and skills you need to ensure an enduring edge, develop your competitive strategies in relation to your product, its distribution, its pricing, promotional measures and advertising. At this point, you‘ll need to revisit your market strategies in the previous piece and realign where necessary.

This is the fifth of a multi-part series.

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