Competition Analysis – Getting to the Bigger Picture in Your Business Plan 

A Competition Analysis is dedicated to examining the challenge of taking on existing players in a market. As part of a larger business plan, its aim is to demonstrate your understanding of the market landscape and how your business will succeed in a competitive environment.  

Follow this guide to ensure that you include all the key components of a thorough Competition Analysis.  

Introduction to a Competition Analysis  

Start with a brief overview of the importance of examining the current competitive landscape in the market. Explain that understanding your competitors helps you identify opportunities, mitigate risks, and sharpen your strategy. 

Identifying Competitors 

Direct Competitors 

These are businesses offering similar products or services to the same target audience. 

Identify them through market research, industry reports, customer feedback, or online resources.  

Indirect Competitors 

These are businesses that offer different products or services but could fulfill the same customer needs. Indirect competitors are less obvious but can be equally important. 

Identify them by looking for substitute products or services that your target audience may choose instead of yours.  

Emerging Competitors 

These are new businesses or startups that are entering the market or could disrupt it. 

Use industry news, startup reports, or competitor monitoring tools to identify them.  

Analyzing Competitors 

Competitor Profiles 

Create profiles for your key competitors, summarizing the following: 

• Company Overview: Name, founding date, location, and market position. 

• Products/Services: Key offerings, range of products/services, and innovations. 

• Target Audience: Who they are targeting (demographics, preferences). 

• Market Share: Their position in the market, size, and influence. 

• Pricing Strategy: How they price their products/services (premium, discount, value-based pricing). 

• Marketing & Sales Strategy: Channels they use for marketing, such as social media, email campaigns, or traditional media. Their sales approach (direct sales, partnerships, e-commerce). 

• Customer Reviews: Analyze feedback from customers (e.g., on social media or review platforms) to get insights into their strengths and weaknesses. 

SWOT Analyses (Strengths, Weaknesses, Opportunities, Threats) 

For a deeper look at the relative positions of current competitors, create a SWOT graph for the ones most relevant to your business.  

• Strengths: What advantages do your competitors have? (e.g., brand recognition, strong distribution networks, large customer base). 

• Weaknesses: Where are they lacking? (e.g., poor customer service, limited product range, high prices). 

• Opportunities: What opportunities exist for your competitors to grow? (e.g., emerging markets, new technologies). 

• Threats: What threats do they face? (e.g., changing regulations, disruptive innovations, new entrants). 

 Your Competitive Advantage 

Now, put the focus on yourself and how you can use your advantages to mitigate the negative effects of being a new entrant on the market.  

Define Your Unique Selling Proposition (USP) 

Clearly state what makes your business stand out from the competition. Your USP should focus on what customers value most. Common USPs are typically derived from some aspect of price, quality, product selection, convenience, business model, etc.  

Highlight Barriers to Entry 

Identify any barriers to entry that protect your business from new competitors. These can include patents, brand loyalty, economies of scale, or exclusive supplier agreements. 

Cost Advantage or Differentiation Strategy 

Explain if your business operates more efficiently than competitors, enabling you to offer lower prices or higher margins. 

If you’re not competing on cost, highlight how your product or service is superior in terms of quality, innovation, or customer experience. 

Leveraging Market Gaps 

Discuss how you’ve identified gaps in the market that your competitors are not addressing and how you plan to fill them. 

Customer Loyalty and Retention 

Discuss strategies you use to retain customers and build loyalty, such as loyalty programs, personalized service, or community building. 

Presenting the Competitive Landscape Graphically 

 As with other sections of the business plan, the section on Completion Analysis should be supported by high-quality graphic design elements. This is especially important for clearly and succinctly presenting large amounts of information in easily readable visual form. Use graphic elements to communicate your findings in these areas: 

• Competitive Matrix 

A Competitive Matrix compares your business against competitors based on key factors such as price, quality, customer service, and innovation. It visually illustrates your position relative to others. 

• Market Share Pie Chart 

Present a pie chart or bar graph to show the market share distribution among competitors and where your business fits into the overall market. 

• Perceptual Map 

Use a Perceptual Map to visually plot competitors based on two key variables (e.g., price vs. quality or innovation vs. market share), showing how your business is positioned. 

Strategic Implications 

This section answers certain questions that potential stakeholders are certain to have.  

How You Will Respond to Competitors 

Discuss your strategy for responding to competitors. Will you focus on price competition, product innovation, or customer service? How will you adapt to their actions? 

Opportunities for Growth 

Highlight where your business has opportunities for growth based on gaps left by competitors or market needs they’re not meeting. 

Threat Mitigation 

Identify potential threats posed by competitors (e.g., new entrants, aggressive pricing) and explain how you plan to mitigate those risks. 

Conclusion 

Summarize how your business is uniquely positioned to succeed in the competitive landscape and reiterate your competitive advantage. This serves as a final reinforcement of why your business will thrive despite competition. 

Learn More About Business Plans 

By following this structure, you’ll be able to provide a thorough and compelling Competition Analysis in your business plan, demonstrating to investors or stakeholders that the business is prepared to compete in the market. 

If you want to learn more about what you can do to make all the parts of your business plan more effective, read our Ultimate Guide to Writing a Business Plan. You’ll find a detailed look at all the components of a great plan, along with tips and advice for making yours even more compelling.  

To learn about how Joorney can help with comprehensive professional plans for banking, investment, or immigration purposes, just reach out to us and tell us more about your needs.