Assessing your competition

To grow your business, you need to gain market share (commonly known as your slice of the market pie) by drawing customers and purchases away from competing companies. In this portion of your marketing plan, you summarize what kind of competition your company faces, including

•     Direct competitors: These competitors are companies that your customers consider when they think about buying. Describe each one, along with what you know about the threats they pose to you.
•     Indirect or stealth competitors: These competitors are companies that go after your customers in different and unexpected ways. For example, cable television, satellite services, movie rentals, and low-priced DVD purchase offers are all indirect competitors to movie theaters.

Competition creates threats and provides opportunities, and how you handle both is a determining factor in the success of your company:

•     Competitive threats and opportunities: Examples of threats include new competitors, improved or expanded offerings from old competitors, and new options that let prospects fill the need that your product addresses in a whole new way — such as online buying, do-it-yourself solutions, or new technologies that replace the need for your offering altogether. Opportunities include changes that weaken your competitors or the closure of longtime competitors.
•     How you plan to protect against threats and capitalize on opportunities: Now you're conducting a strengths, weaknesses, opportunities, and threats (SWOT) analysis. 

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