Who Are Your Competitors?

We have heard the famous phrase, keep your friends close and your enemies closer. Does this apply to your business? This phase can make or break your business!

We all know that setting up a business means taking a share of the market and defending it from your competitors. In doing your online or offline business, this is a fact. Hence it is imperative that you understand your competitors, whether direct or indirect, before you can be successful.

1. Strength, Weakness, Opportunity, Threats (SWOT) Analysis

To understand your competitors, you can perform a SWOT analysis. This is a good tool to analyse your competitors and yourself too. You should do this first before you even start up your business.

Review your competitors' product offerings, price range, quality and features. Then you take stock of your own product range, features, price range and quality. By benchmarking your competitors' products to your own, you can map out your competitors' as well as your own strength and weaknesses. This will help you to formulate your strategies to compete more effectively. If you are weak in an area but strong in another, put emphasis on your strong points and don't challenge your competitors in your weak points.

On the flip side of it, your competitors can challenge your weak areas to gain market share, so you have to make sure that your strong points are good enough to compensate for the weak ones.

Take note take your competitors' weaknesses can be new market opportunities for you. And your weaknesses may be a threat to your business survival.

2. Distribution channel

Most products available in the market have complements and substitutes. Eg, a customer walks into a supermarket and wants to buy ham. However, he could not find ham, so he may choose to buy Spam instead. A buyer will always find a substitute for something that they can't find.

So what does it mean? Well, having an effective distribution channel that can reach your target customers at their location will help you greatly in closing your sale.

3. Future Competitors

Apart from your existing competitors, you have to brace yourself for new competitors jumping into the market. By establishing a strong customer relationship and a good strategy, your business should be able to hold off new challenges.

In general, new entrants like to compete on pricing, ie they focus on low price. This strategy can work for you as a double edged sword. If the new competitor offer low priced and inferior quality products, then you can establish your brand as a superior quality product. However, if they offer superior quality products at a cheaper price, then you may have to engage in a price war.

All in all, you need to strategise your plan of attack and defence constantly. Only after you understand your competitors' strengths and weaknesses and your own charateristics, can you formulate good strategies. With these information you can take advantage of your competitors' weaknesses by using your strong points while defending your weakness from competitors' attacks.

As the business environment is in constant fluid, you need to constantly know your enemy and know thyself as well.

Article Source: http://www.classesandcareers.net/education

Hai Liang strive to help people who would like to succeed in their home based business. For proven home based business opportunities visit : Proven Home Based Internet Business Opportunities.

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