Author: Ayaz Haider
The most difficult and time consuming section while compiling a business plan, is competitive analysis. Before start writing this section, it is essential to investigate carefully your competitors. It must describe both the direct and indirect competitors of a specific business. It is better to analyze your competitors before start writing a business plan. It must describe, who your competitors are, their strengths and weaknesses, demographics, product they are offering and the uniqueness of your product.
Types of competitors:
Usually, there are two types of competitors: Direct and indirect. Direct competitors are the competitors selling the same product and service, which you are providing. Indirect competitors are those who are indirectly affect your product. Before start writing competitive analysis, makes sure you have the list of all your direct and indirect competitors. If you have many competitors then it's better to generalize once again.
Elements of competitive analysis:
Competitive analysis section of a business plan must be carefully studied in order to earn large amount of profit. The major elements of competitive analysis include the following:
Defining competitors: The first step in a competitor's analysis is defining and identifying the current and potential competitors. You can identify your competitors from two ways: The first way is to analyze them from their market size and the second way is to analyze them according to their comparative strategies.
Analysis of competitor's strengths and weaknesses: Once you have identified your competitors, now it's time to evaluate their strengths and weaknesses. This step enough time and effort. You have to be very careful in evaluating the strengths and weaknesses. Their weaknesses may be your strengths and you will be able to introduce better product if you know their strengths.
Business plan writers must focus their competitive analysis efforts in four major areas:
Analysis of internal strengths and weaknesses: After evaluating the strengths and weaknesses of your competitors, now it's time to analyze the internal strengths and weaknesses. Once you have determined your strengths and weaknesses you will be able to make better place in the market.
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