Getting to know the Competition
Overview
Why does one business go under while another
one thrives? Why do you eat at Burger King instead of McDonalds
or vice versa? Why do some stores charge twice as much for merchandise
as their competition and still find customers? If they’re selling
the same product but to a different customer, are they in competition
at all? All of these questions have to do with identifying your
competition and competitive differences: businesses succeeding
because they offer something cheaper, better, faster, or in a prettier
package than other companies. Finding out what your competition
is doing will help you define your new business so that you can tell
your customers why they should buy from your, rather than from a company
that’s just a click away.
Directions
1. After discussing some of the things
that make companies competitive, pick a type of Internet business.
Find out whom your competition is and what they have to offer.
What do they charge for their products or services? Do they offer
any special services, such as free shipping? What is their selling
message: low-cost, good service, quality products, or a high-class
image? Who is their target customer (age, gender, income level,
special interests, and so on)? Now create a chart comparing your
business in all these areas to three competitors. Be prepared
to summarize this comparison in a presentation to your classmates.
2. You may work with a partner to complete
your research, but each of you will create your own chart.
3. Use the following questions to help
guide your research:
- Who is my competition?
- What types of customers is my competition
trying to attract?
- What makes my business different from
my competition?
- What do my competitors and I have
in common?
Also look at information on topics like the
following:
- What do my competitors charge for
their products or services?
- What type of customer support do they
provide?
- Do my competitors have any special
incentives, such as free shipping, expert advice, or senior discounts?
- How do consumer groups and magazines
rate my competitors’ products?
- What is the size of my competitors’
businesses (sales volume, number of employees)?
- Do my competitors emphasize value,
service, or quality?
- Describe the image your competitors
strive to create in their customers’ minds.
Consider Ford Motor Company and Mercedes
Benz. How are they similar: How are the different? Visit
their Web sites to find out.
The following questions may help
you start thinking about specific ways to make your own business unique
to customers:
- How can a business put its value message
in an Internet domain name?
Consider JustFlowers.com, ProFlowers.com
and QualityFlowers.com; what benefits do their addresses promise?
- How can treating your customers well
help you succeed over your competition, even if their prices are lower?
- Why would a customer choose an online
business with an easy-to-use return policy over another?
4. After you complete your research, create
your chart on poster board. Displaying the chart so the other students
can see it, review how the companies on the chart compare to your company.
Use these websites
to get started with your research. Use search engines to find
other sites.
- Corporate Information – www.corporateinformation.com
this site allows you to choose a category of business, then get information
about specific companies within that industry.
- Web Market – www.webmarket.com
to be competitive you have to charge the right price for your product
or service. On this site you can look for companies by category
and comparison shop.
- Consumer Reports Online – www.consumerreports.org
this online version of the popular consumer magazine from an independent
testing service has information on and reviews of various products.
See how well your competitors’ products rank for things like safety
and quality.
- Inc. Magazine – www.inc.com
this online site of the popular Inc. Magazine has advice on starting
a business. Search the site with the word “competition” to read
some useful articles on differentiating yourself from your competitors.
- Hoover’s Online – www.hoovers.com
Hoover’s is one of the best sites online for researching individual
companies. You can information on company products, sales volume,
and senior management.
Vernon "BDB" King
Virginia Beach Technical Center
Virginia Beach Virginia
