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Interview Patty

You Must Understand Your Competition

Small Business Consulting

Do you know who your real competitors are? Learn how to identify key competitors to better position and sell your products or services.

Identifying your competitors is important before you finalize your decision about which business category and market segment to compete in. It is vital to the success of a new or existing business because it reduces risk, time, required resources, and expense.

For example, a new salty snack chip product may have a unique taste, texture, appearance and health benefits. But effectively competing with every salty snack (both direct competitors like salty chips and indirect competitors like popcorn, salty nuts, etc.) in a $14 billion product category is difficult, even for a large, successful snack food company like Frito-Lay. If the competition is too strong, it's going to be extremely difficult for a newcomer to break in. It may be more profitable to carefully target a specific segment of a category where the odds of success are greatest. Even the tortilla chip segment of the salty snack category is over $3 billion in size. Perhaps "healthy multigrain snacks" would be a more manageable segment of the salty snack category at around $200 million?

Even established businesses need to periodically reevaluate their direction in relation to competition. For example, we know of a local appliance chain with a very long history and a strong base of loyal customers. The chain's management recently gave the go-ahead on a brand-new "superstore" showcase at great expense. Although business was very strong, the chain decided to shut down when it learned that two national chains were planning to enter the local market in the coming year. The local chain realized it wouldn't be able to win a price war and decided to quit while it was ahead.

In order to compete effectively, you need to be able to answer these questions:

  • Who are your competitors?
  • What are your competitors' strengths and weaknesses?
  • What are your competitors planning to do next?

Source: bizfilings

Patty Block, President and Founder of The Block Group, established her company to advocate for women-owned businesses, helping them position their companies for strategic growth. Charting the course for impactful, sustainable, profitable businesses, the beacon is control: of your strategic direction, your money, your time, your staffing, and your ability to bring in business. The Block Group brings together the people, resources and ideas that build results.

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Small business consulting.

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