COMPETITIVE ANALYSIS SECTION OF A BUSINESS PLAN:

One of the most important parts of the market analysis section is the competitive analysis. Before starting your business or launching any product it is essential to understand your competitors. Many entrepreneurs claim that they have no competition, which is the biggest mistake they have made because no business is free of competition. If they don’t give a proper overview of their competitors in the business plan they will quickly and immediately loses the credibility of the potential investors and lenders.

Competitive analysis is the most time consuming part of the business plan, which requires enough research and effort for completing.

Having competitors and showing them in your business plan isn't necessarily bad. There are many big companies who have competitors, like: Coke has Pepsi, Nike has Levi’s, and Macro has Metro. Researching about competitors helps you to know about your product and business demand and helps you to distinguish yourself from the crowd. Competitors will drive your business to greater heights.

Consider including following topics in the competition analysis section of your business plan:

Competitor Profile: The essential characteristics of your competitors are included in this section of the business plan. What are the pricing strategies of their products? What services are they offering and of what quality? Where are they located? Who are their potential customers? And how they are delivering their product to their customers? Also, check the financial and marketing strength of your competitors and their access to suppliers, wholesalers, distributors, and dealers.

Market share: The percentage of market share your competitors are holding is shown in this part of competitive analysis. This information helps you to know who the biggest player in the market is. If possible, try to show three or five year’s breakdown of the market share of your competitors.

Comparison of Strengths and Weaknesses: Consider the strengths and weaknesses of your competitors. By this you will be able to make comparison between yours and theirs strengths and weaknesses. Focus more on their weaknesses because their weaknesses might be your strengths. Consider product advantage, price strategy, market advantages and disadvantages, management strengths and weaknesses, etc.

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