A competitor of a business owner is a business or businesses that offer similar products or services to customers in his or her market. In other words, if you own a bakery on the corner, the supermarket in the shopping mall is your main competitor.
How do competitors influence the success or failure of your business?
Your business’s competitors may drive prices down in order to gain market share. As result, they may even try to “steal” your best workers, and, once you are on your knees, they may offer you a ridiculous price for your business – only to close it the next day. In today’s business environment, even to be second-best is not good enough. The winner takes it all.
Since competitors have such a great influence on your business, they should be analysed regularly by asking the following questions:
- Who are your present and potential competitors?
- What are their positions that they have established in the market?
- What are their strategic objectives and thrusts?
- What are their present and future strategies?
- What are their strengths and weaknesses?
- What are their response patterns?
Once you have all the answers about your competitors, you should compare your business with their strengths and strategies to see where you can compete the best.