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Target ALL of Your Competition
Published on Apr 14, 2011
Read 'Target ALL of Your Competition' at 'Time to Start Up,' the small business blog by BizFilings.
It's no secret that knowing your competitors is a huge part of being competitive yourself. But how do you go about identifying your competitors?
A surprising number of small business owners generate a list off the top of their heads or stop at a simple Google search. While this is a fine starting point, it doesn't begin to get at the deep information you need about direct and indirect competition to make sure you are maximizing your share of the market.
The Business Owner's Toolkit Team, authors of Start, Run, and Grow a Successful Small Business, offer a three-ring target model for mapping the competition at various depths.
The inner ring (bull's-eye) of the target represents your most direct competition—specific businesses in your geographic area that offer a product or service that consumers most likely see as interchangeable with your own offerings. The book cites the example of a garden center competing with other garden centers within ten miles.
The second ring consists of competitors who offer similar products in a different business category or are physically further removed. In the case of the garden center, this ring might include a retailer like Wal-Mart or Home Depot that sells garden supplies and plants, landscaping contractors, and even mail-order houses. "None of these competitors provides exactly the same mix of products and services as you," the book states, "but they may be picking off the most lucrative parts of your business."
The third ring in the model is those companies competing for what the book refers to as "same-occasion" dollars—the competitors most often overlooked by small businesses. Our garden center's competition in this ring includes businesses supplying and encouraging other hobbies or entertainment that competes for gardening time.
According to the authors, "The point of this analysis is to consider carefully, from the buyer's point of view, all the alternatives that there are to purchasing from you." Once you have this information, you can think in a targeted fashion about how your business provides advantages over each level of competitors. And you might borrow ideas from your second and third-ring competitors to compete more effectively against your first-tier competitors.
Learn more about the target model on Toolkit.comFree Book Offer
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