The next step in the business plan process is the Competitor Profile, part of the External Analysis, follows on from the industry profile looking again at the external environment.
This is a very important part of the planning process – knowing your competition.
- List your top direct competitors, those that offer a similar product/service and operate in the same target market.
- List your indirect competitors, those that operate in the same industry, but target a different market.
With the above consider such factors as price, quality, location, range and product line. For example, are their prices high or low? How are they on service? How well are they doing? What are their strengths and weaknesses?
By answering these questions, you may start to see some opportunities (or even threats) that exist for you.
Note: The profile of your competitors should be constantly monitored.
Industry Success Factors
A couple of final things to consider with regards to the external analysis:
What are the four most important factors within your industry? For example, cost efficiency, cost leadership, customer service, product differentiation, product innovation etc.
Summarize or list how you see the future of your industry, what do you think its future opportunities and threats are. As much foresight you can give, will help your business plan for the future.
