Your competitors include businesses with the same type of products or services, or any offering, both commercial and non-commercial, which can be used as an alternative to yours.
The more you know about the competition, the better placed you will be able to:
- assess whether your goods and services will be viable in the chosen market
- develop your export strategy
- benchmark your products and services against the competition
- recognise and communicate your competitive advantage.
Profile your competitors
Build a profile of your key competitors. Gather information on:
- the names and locations of local competitors
- their brands, their product range, the services they provide
- the type of customers they target
- their percentage of the market
- how they promote and price their offerings
- who their distributors and stockists are
- geographical areas covered
- their other partners or alliances.
How your competitors price their products will affect the prices you can achieve for your products in the same market. Be aware that local competitors will not have the same cost structure you have. This could be due to lower product to market costs, as they do not have to transport products long distances or adapt them to the local market.
Could your competitor employ defensive pricing strategies (cutting prices) when you enter the market and would this affect you? If your product is superior to what is available on the local market, and you can convince the buyers of this, you may be able to sell at a premium price.
Sources of information on competitors
- Online business directories
- Network with other businesses and exporters
- Use a researcher
- Subscribe to e-newsletters
- Attend conferences, events or trade shows
- Pay a consultant
- Visit the competition
- Library resources.
Assess competitor strengths and weaknesses
Look for customer reviews on websites, on social media, and on their own websites. Why do customers use their services or buy their products? Remember that customer perception can be as important as fact.
Create an action plan:
- what can you do to reduce the impact of key competitors' strengths?
- how can you take advantage of their weaknesses?
A useful exercise is to complete the Competitor Assessment template in Related Downloads below:
Assess your own strengths and weaknesses
Why would a customer change their behaviour to purchase from your business instead of your competitors?
Build on the research you’ve done on your competitors by completing a Strengths Weaknesses Opportunities Threats (SWOT) analysis of your business. Ask advisers and key staff to contribute to your SWOT analysis to help you identify strengths and resolve or minimise weaknesses.
Which of the following areas represent strengths or opportunities for your business?
Do customers want it?
If you cannot locate any product or service that is a substitute for your product or service in the market, it is likely that there is no or very low demand due to factors unique to that market. Make sure you have correctly identified the reason for the absence of competition. 'They just don't have it yet' is rarely the correct answer.
- Great customer service
- Superior product / service knowledge?
- Loyal customers
- Good location / footprint
- Excellent website
- Strong marketing mix
- Qualifications and certifications
- Strong business values
- Innovative product / service
- Attractive price point
- Robust processes and systems
- Strong reputation
- Good resources
Which of the following areas represent weaknesses or threats for your business?
- Lack of market recognition
- Lack of credibility / track record
- Poor buying leverage
- Strong competition
- Lack of staff
- Short of funding
- At mercy of changing trends / fashion
- Sensitive to changes in the economy, politics, weather or environment
- Lack of IT support
- Lack of market demand / knowledge
- Inadequate insurance
Try to outline a solution for each weakness. For example, you will post credibility-boosting customer feedback as quickly as possible on your website; you are forming a buying syndicate with similar businesses to leverage lower prices; you are employing some highly skilled or experienced staff to fill knowledge gaps; and you have adopted emerging productivity and marketing technology faster than competitors.