Knowing Your Business Competitor's Strengths

We all must face the competition from time to time or else we risk losing out on a lot of profit. The competition might be a large company overseas or a small business just across the street. In any case you must know who they are before you can really develop a long-term strategy for yourself.

Businesses who fail to take a serious assessment of their competitors may run into problems as time goes on. For example, if your competitor is developing a new product, or improving their customer service and you fail to reciprocate they may end up offering more value for the customer money. Once that happens, it is only a matter of time until other people figure it out and you start to lose business.

Business strategies should be based upon your strength, the strengths of your competitors and the market trends. The best way to synthesize this information is to put it in an Excel Spreadsheet or similar type of program that will allow you to make changes and edit.

The best approach that has come across through experience is to name your columns with the following headings: Name, Strengths, Weaknesses, Resources, Analysis. As you find information about your competitors you add that to your overall spreadsheet.

Strengths: Each business has its own particular strength. Some have low price, some have better customer service, some have a branded image. Think about your competitors strengths and add them into the matrix.

Weaknesses: Like strengths each business has weaknesses. These weaknesses include poor parking, high cost of building maintenance, recruiting, or anything else that restricts the businesses ability to compete.

Resources: When companies are in a crunch they will often rely on their resources to get things done. These resources could be employees, cheaper sources of materials, a larger parent company, etc.

Analysis: Once you have a competitor's strengths, weaknesses and resources you can determine where they are going to run into problems. This analysis is used to determine underlining problems that you might not previously thought about.