By Rafael Caamano
It is essential to understand your competition, and yes you do have competition. As a matter of fact, you may have more competitors than you may think, but let’s keep it simple. Your customers have many options or choices, so learning as much as possible about the competition will help you define your position within the marketplace. When researching competitors, try to identify direct and indirect competitors.
A direct competitor is easier to identify as these companies provide similar services or products. For example, Delta and United Airlines are direct competitors. On the contrary, an indirect competitor for Delta Airlines could be another transportation method, such as traveling via train or car. Please consider that more than ever before, direct competitors are not always local, and depending on your industry, they can be in various parts of Florida or the world.
Attending industry trade shows could be an excellent way to gather data about your direct and indirect competitors.
Another strategy I have used in the past is contacting a direct competitor who competes outside your target area. This company was far from my target area, and they provided me with excellent information while establishing a new relationship.
Here is a quick way to conduct a reality check:
- Named three direct competitors for your product/service.
- Named three indirect competitors for your product/service.
- What other products/services could be substituted for your product/service?
- How can you determine what customers are substituting for your product/service?
In conclusion, whether your competitors are direct or indirect, you must have a strong value proposition and competitive advantage.
At the UCF Business Incubation Program, creating a competitive grid or value proposition is something that we assist clients with so that they can establish an accurate competitive profile.