3.1. Market & Competition

While the market analysis tries to capture the general conditions in which the company finds itself, the competitive analysis deals specifically with the competitors in the market.

The competitors are to be closely scrutinised. The competitors, their number, their range of services, their strengths and weaknesses, their immediate areas of attack should be recorded. The description in the business plan should give an idea of the competitive environment of the enterprise.  

When evaluating competitors, i.e. those who offer the same services, a company comparison (benchmarking) can be informative. In a comparison of service quality, sales, pricing, growth, market share, etc., one's own company should be classified. In this way, competitive advantages can be worked out.

When positioning the company in the market - in relation to the competition - the question is: Why should a customer buy "my" product, "my" service from "my" company? It must be determined what is better about one's own product or what promises greater benefits for the customer. Knowing this is of crucial importance for marketing communication. The comparison reveals how a "brand", a "product" or a "service" can be unmistakably anchored in the customer's consciousness.

The positioning of the service in the market needs to be skilful. In this context, the personal view of things is less important for market positioning than the view of the customers! The right positioning is crucial for market success. It does not happen automatically. It involves search movements and intensive discussion with the customers. It is a constant challenge for the entrepreneur, because the market and demand are constantly changing.

Synopsis of a simple competitive analysis

For a business plan it is helpful to draw up a simple synopsis of the competitors. This creates a classification. Define the criteria for your own company as well, because this is the only way to create a self-positioning that shows strengths and weaknesses.

In everyday business, information from competitors should be collected continuously and in a structured way. They provide information about market developments and what competitors intend to do. In markets where there is fierce cut-throat competition, close observation of competitors is indispensable.