Use these suggestions to analyze strengths and weaknesses, advantages, and any relevant patterns.
Competitive forces. This step is crucial to complete if you are planning on creating a marketing plan for your company. In general, there are five competitive forces that affect the market.
- Competitors and rivalries. Do you have an aggressive competitor? Is your industry declining? How are the prices within your industry? Basically, you will need to consider how competitive your business is with your competitor. If the competition is fierce, you will need a more aggressive advertising campaign.
- Any new competitors. A new business on the scene can present a serious threat to the other companies. They have an advantage because they are determined to win over a portion of the market. This could mean that they will engage in an aggressive marketing strategy and thus take away some of your customers.
- Substitute products. We see it at the supermarkets. Brand names are met with store brands that promise to be essentially the same product. When a company is dedicated to producing a product that is identical to yours yet charges cheaper prices, this can be a big threat.
- Consider the buyers. Do your buyers demand low prices? This can affect supply and demand as well as your profits. If you have a lot of competition, the constant price fluctuations can affect the market.
- The suppliers. If your suppliers also demand certain profits. This happens if your supplier has a sort of monopoly over the market or if they are large and important enough to demand certain prices. This can also affect your overall business practices.
Competitive Intelligence