Business Killer 4: Non-traditional Competitors
Posted by Ryan Volberg at September 21, 2007 2:00 PM
Determining Non-traditional Competitors
Many business owners can confidently list their traditional competitors. But, it takes an experienced business owner to recognize the less obvious ones. In order to succeed, you need to know your enemies and that means ALL of them. By not understanding who your competitors truly are, you create a vulnerable blind spot that an unsuspecting competitor can act on.
One way to find out who your competitors are is to do a S.W.O.T. analysis. SWOT is a marketing term that stands for:
- Strengths
- Weaknesses
- Opportunities
- Threats
If you’ve been reading this blog regularly, we have already indirectly touched upon how to identify your Strengths and Weaknesses in order to find your niche and compete with the large chains.
Now we need to turn this analysis outward. We complete the SWOT analysis by looking at our external Opportunities and Threats. Ask yourself the following questions to get started:
1. Is there an online equivalent?
Bob’s Jewelry Store faces intense competition from web-only vendors. A search for a popular brand of watch that he sells produces nearly 2 million results, many of them from virtual stores with no physical retail presence.
In addition, Bob must also contend with eBay sellers who sell both authentic and imitation products. A search for the brand produces over 1300 items. Most are priced well below what Bob has priced his watches at.
2. Is there an alternative to buying your products?
Jim’s Fitness Store faces a slightly different problem. Craigslist (http://www.craigslist.org/) has hundreds of local used pieces of fitness equipment that create pressure on his prices. Savings of 50 -70% are not uncommon. In some cases, lower end equipment goes for free.
Similarly, Judy’s Music Store must compete not only with the traditional retailers and online music stores, but also with illegal downloading.
3. Are the products you sell now available in non-traditional stores?
Phil thought he found his niche offering inexpensive kitchen gadgets at Phil’s Housewares. Then a dollar store opened next door, carrying many of his most popular items. While Phil has slightly higher quality, he’s hard pressed to explain the finer points to his customers.
Agnes owns a neighborhood favorite restaurant. Until recently, she was the only restaurant within 20 minutes to offer traditional food from her home country. Now she finds herself competing with a local grocery store that has brought in a selection of high quality fresh entrees. To make matters worse, a meal preparation concept that allows customers to make their food for an entire month has opened nearby and seems to be siphoning off some of her more frequent customers.
Next week, we will delve into this topic further and look into some solutions.
Ryan Volberg is the CEO of Vivonet, a company dedicated to ensuring retail and restaurant success.
 Category: Survival Tips
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