Module 4 - Assignment 1 - Conduct a competitive analysis
- Due Feb 4, 2022 by 11:59pm
- Points 10
- Submitting a text entry box or a file upload
- Available until Feb 4, 2022 at 11:59pm
Competitive analysis overview
TIP: Often., students struggle with this assignment because they find it difficult to find information about their competition, or think their business idea is so unique that they do not have any competition. Both of these excuses is unwarranted and can be overcome with a bit of ingenuity and creativity. First of all, it is important to understand the difference between indirect and direct competition. Indirect competition is the conflict between vendors whose products or services are not the same but that could satisfy the same consumer need. Direct competition occurs when businesses are selling products or services that are essentially the same. No business is immune to competition. Sometimes the competition is direct (Coke vs. Pepsi). Other times the competition is indirect Coke vs. water bottlers, alcoholic beverages, coffee and tea makers, juices, sports drinks, and even utility companies that send water to your faucet.
Start by first accessing the InLab@HCC Library Guide by clicking here Links to an external site.. You will find many resources that will allow you to capture industry data.
The second important part about completing a competitive analysis is where to go to capture the data you need. For publicly traded companies (companies that have shares of stock on the stock exchange) there is abundant free financial and other data available online. Yahoo Finance (https://finance.yahoo.com/ Links to an external site. ) is a good place to start searching for information about publicly traded companies. Simply type the name of your competitor (i.e. coca cola) into the search field on the top and hit enter. You can then click on the "Profile", "Financials" and other tabs to capture valuable data and information about your competition. For non-publicly traded companies, of course there is google and keyword searching there. In addition there is a wonderful array of FREE tools available through the Hillsborough County Library System -- https://www.hcplc.org/research/business Links to an external site. . Reference USA, Demographics Now, and Business Insights Essentials are three powerful free tools available through the Library website. Is all you simply need to do is obtain a library card, which is free. For assistance, you can reach the library at Hillsborough County Public Library Cooperative 813-273-3652.
Another way of obtaining competitor information is to call businesses, visit businesses, introduce yourself as a HCC student and ask for information. While many businesses will be hesitant to share their private information with you, some businesses will, and you will never know which ones do, until you ask.
What exactly is a competitive analysis? It simply means assessing and having a good handle on who your competitors are, what value they provide, understanding their (and your) strengths and weaknesses, and where your business fits in. Is it important to know who your competitors are? Is it important for you to be able to share with others who those competitors are, and how your product is different?
When developing a business model CANVAS and a minimum viable product, you will notice there is no building block in the business model canvas related to competitors. This is because of two reasons. First, a business model exists in an environment that contains many external forces. For example, a business model is surrounded by competition, government influences, laws, economic factors and so on. Because competitors are part of the external environment, there is no place for competition in the canvas itself.
This does not mean that you should ignore your competition completely, and not conduct a competitive analysis. Once you begin to visualize your business model in the center of a circle, and external forces like competitors falling outside of your business model canvas, you begin to realize that those external forces are, in most instances outside of your control. The lean startup approach is defined by eliminating waste and creating efficiency. Therefore, because time is one of those important resources you must not waste, it is not prudent for a startup to spend too much of its valuable time obsessing over competitors. Instead, most of a startups time should be spent obsessing over customers and searching for a functional business model.
There are two basic forms of a competitive analysis. The first involves a startup that is planning to enter an existing market, a market with existing customers, products, competitors and so on. For this type of analysis, you attempt to demonstrate that 1) you understand the market you are selling to, 2) you understand the other companies selling in your market, and 3) you understand how and why you are better than any of the products currently in the market. This, more common form of a competitive analysis starts with the hypothesis of “Here’s the problem we are solving for customers.” The competitive analysis chart highlights the product features that differentiate your startup from the existing market incumbents because of your understanding of specific customer needs (not your opinion) in this niche.
The second form of a competitive analysis occurs with startups that have new disruptive ideas that have no market to enter, because they are creating a new market. When creating a new market a competitive analysis starts with the hypothesis of “We are creating something that never existed before for customers.” The competitive analysis table highlights the product features that show what customers could never do before. It compares your company to groups of products or services. When conducting this type of competitive analysis, you should use the petal diagram approach described in THIS ARTICLE written by Steve Blank. Links to an external site.
Assignment Resources:
2. Download and review the competitive analysis workbook. Links to an external site. (This will help you complete your feasibility plan)
3. Download and review the Competitive analysis worksheet Download Competitive analysis worksheet
Consider these types of business statistics in your competitive analysis:
| Focus | Goal | Reference |
|---|---|---|
|
General business statistics
|
Find statistics on industries, business conditions
|
|
|
Consumer statistics
|
Gain info on potential customers, consumer markets
|
|
|
Demographics
|
Segment the population for targeting customers
|
|
|
Economic indicators
|
Know unemployment rates, loans granted and more
|
|
|
Employment statistics
|
Dig deeper into employment trends for your market
|
|
|
Income statistics
|
Pay your employees fair rates based on earnings data
|
|
|
Money and interest rates
|
Keep money by mastering exchange and interest rates
|
|
|
Production and sales statistics
|
Understand demand, costs and consumer spending
|
|
|
Trade statistics
|
Track indicators of sales and market performance
|
|
|
Statistics of specific industries
|
Use a wealth of federal agency data on industries
|
Assignment submission: Fill in the Competitive analysis worksheet Download Competitive analysis worksheet. Once you are done, upload the file to this CANVAS assignment. You may find it difficult to identify who your direct and or indirect competitors may be. You are expected to conduct independent research through the HCC Library, Google, etc to identify who your competitors might be. You are also expected in some cases (if the organizations are private) to call them and see if you can acquire information about those firms over the phone. You can also call and setup appointments to go and physically visit business locations to capture information about your competitors For public corporations (ones that trade shares of stock on a stock exchange), you can use resources like Yahoo Finance to capture financial information about competitors.
This is a difficult assignment, so try your best. This work will be included in your final feasibility plan project.
Find Rubric
