ANALYSIS OF DIRECT COMPETITORS, IS THAT ALL?

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Very often, young entrepreneurs who conduct a competitor analysis make a textbook mistake. They forget that this type of comparison must be done on two levels. First, you need to define the practices of your direct competitors. What characterizes these companies?

These are companies that are almost 1:1 similar to your company in terms of the activities they perform: they offer similar products to yours, they have the same target audience, etc. It often lithuania email list seems that the analysis of such companies exhausts the topic and guarantees us all the necessary information. Nothing could be further from the truth. Let's suppose that a start-up business is a pizzeria. Its owner knows perfectly well how other establishments of this type work in the city. In addition, its pizza is by far the tastiest. Does this guarantee success?

Unfortunately not. So what if you make a great pizza and know all the pros and cons of your direct competitors, when most people in the city will probably eat a kebab? This brings us to the second level of competitor analysis: looking at it from the perspective of the potential customer. We consider what needs we satisfy with our business. In the example discussed, we satisfy the customer's hunger. But are we the only type of restaurant? After all, people eat more than just pizza. This adds many products to our list of competitors. These are indirect competitors, meaning those that offer different products but satisfy very similar (or identical) needs. It is also worth putting them under our microscope, as this will allow us to better investigate trends and preferences in the area.



An effective competitive analysis can prove to be the missing link to achieving business success. Knowing the realities of the environment in which we do business can help us make optimal decisions. Sometimes, by knowing the habits of our competitors, we can learn from their mistakes and protect our company from significant financial losses. Above all, competitive analysis is an important aid in answering many questions related to the development of any company and, as such, is an essential tool in the management process.