All too often, entrepreneurs fail to recognize that competition really exists, especially when they believe their product or service is the first of its kind. The purpose of the competitive analysis is to determine the strengths and weaknesses of your competitors, develop marketing strategies that will give you a distinct competitive advantage and erect barriers that will keep competitors out of your market share.
Identify both current and potential competitors in your plan, and group them by the intensity of their competition. Mail a questionnaire to your target customer base. Describe your product or service, and ask which companies the consumer would consider alternatives to yours.
A company's strengths and weaknesses are usually based on the key assets and skills that enable it to be competitive in the marketplace. An asset might be the ability to create a strong advertising campaign or a prime retail location. Examine your competitors' strategies and strengths, then list the skills and assets your start-up will need to be successful.