Checklist: Assessing the Competition

(From Checklists for Starting an Internet Business)

Who are your competitors? Where are they located and how does their market compare to your own (ie. Are you targeting the exact same people?)?
How do their products or services compare to your own? What benefits and features do they provide their customers that you like? What don't you like, or think you can improve on?
How does their pricing and "value for the money" compare to your own? Remember that "cheap" isn't necessarily better - people automatically attach a value to a product or service depending on what they think it's worth. And if you and your competitors engage in a price war, you'll just all end up with decreased profits. Your customers should be happy with what they get for their dollar.
Who are your top competitors and what is unique about them? How do they compare to one another? Is there something particular about one that stands out from the rest?
Where and how do your top competitors reach your target market? What key phrases do they target in the search engines? Where are they linked online? How and where do they advertise consistently - any specific websites, magazines, trade shows, organizations?
How do customers view your competitors? What's their reputation? How strong is customer loyalty? If you're in a relatively small market with very strong customer loyalty, the challenge of converting some of those customers to your own business is going to be significant.
How much competition is there? Is there room for you in the market? I often hear people saying that they want to be the first into a market. No doubt there are advantages to being "first in", however a market with competition is evidence that there's a demand for the product or service.
What can you offer that your competitors cannot? Maybe it's more choices, or fast, personalized service… whatever it is, there should be something unique about your business. Can you find any comments about your competitors on the web - and if so, do customers provide you with any hints on how the product or service can be improved? What reason do people have to do business with you rather than with your competition?
How do your competitors build relationships with their customers? For example, they may offer product updates, special offers, a free newsletter… subscribe to them and see how they relate to their customers and what types of incentives they offer to drive sales.
How successful are your competitors? This can be very difficult to assess… but by scanning the web for tidbits of news, message board posts, articles, links, etc. to your competitors, you can get at least a little idea of how well they're doing.

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