Three Major Competitors Types That Every Small Business Must Compete With!
This article covers all types of
competitors that any small business must compete with in order
to achieve its goals, objectives, to survive.
In this article you will learn
1. Candies Dealers
2. Herbal Tea, Diet Pills Dealers
3. Fruits Dealers
In this article you will learn
- Major types of competitors that any small business must compete with.
- How to conduct target market research to identify the most elusive type of these competitors that is "Indirect Competitors".
- How to deal effectively with all esp the most elusive type.
Usually, in most cases small
business have far more competitors compared to large setups, according to a
study each year over one million businesses start in U.S alone that
excludes online start-ups (1). That
means 116 each hour!
You may like 21 Surprising Facts about Small Businesses (in USA)
And out of those one million around
134,139 patents are issued roughly to the same number of businesses while the
rest of the businesses are essentially “Me-Too’s Businesses” means businesses
with same product/service, numbering around 866,000 businesses (2).
Now these aren’t the only
competitors that small business needs to tackle with, from my own years of
experience in small business I have identified three major kinds of competitors
that any small business needs to compete with to survive & thrive.
Three Kinds of Small Business Competitors
1.
Traditional Competitors
2.
Direct Competitors
3.
Indirect Competitors
Okay now let me elaborate each of
these three types of competitors with an example.
Traditional Customers
For instance you run an ice-cream
business then other ice-cream dealers are your traditional customers.
Direct Competitors
And cold drink, drinks, snack,
fast-food dealers are your direct competitors.
Indirect Competitors
And indirect competitors would be
any other product that the consumer would like to prefer with the same amount
of money that is equal to price of your product.
How to identify all of your Competitors
Well that’s easy, the traditional
competitors are obvious, the direct competitors in most, majority cases are
too. I believe the last ones, the indirect competitors are hard to identify but
I believe you still can identify these competitors.
All you need to do is to identify
all the potential indirect competitors and then using a little research to
identify the exact indirect competitors for your business (out of all
those potential indirect competitors) .
For instance you have identified the
following competitors as indirect competitors for your ice-cream business.
1. Candies Dealers
2. Herbal Tea, Diet Pills Dealers
3. Fruits Dealers
Now what you need to do is to
conduct a little target market research to pinpoint the exact indirect
customers.
Below I have provided a
questionnaire sample for our ice-cream example.
If you look at the questionnaire
sample you would see that I have asked the most pressing question or important
question before asking anything from the respondent, that is because most of
the time respondents don’t usually take time to provide answers to all
questions asked thus you need to put the most important questions at the top.
“Nothing” option in the
questionnaire indicates that there is nothing in questionnaire that the
customer would prefer to have with that amount of money, that means you need to
reconsider your other options in the questionnaire that makes up your indirect
competitors.
Make sure that your sample size is
large as the larger the sample size the smaller the sampling error, in other
words the more accurate, exact would be your research in terms of identifying
the indirect competitors.
Dealing Effectively with your Small Business Competitors:
For traditional & direct
competitors use common approaches, tactics as per needs, strengths of your
business while at the same time keeping in mind your business capacity in terms
of financial, technical, human, time resources etc.
And in case of indirect competitors,
make sure your product is widely spread to ensure maximum availability for
utilization, consumption. Use tactics like attacking the strengths/weaknesses
of indirect competitors for instance launching zero fat, minimum sugar ice
cream (to tackle herbal, diet products).
Or provide ice cream with a specific
candy or candies flavor, fruit flavor or something that is made out of fruits
along with ice-cream, something like Fruice-cream, just think out of the
box!
You can also use a strategy of
allying your product/service with your indirect competitors like making an
ice-cream that increases metabolism or fat burning when taken before or after
herbal tea and the sky is the limit!
Over to you guys!
Reference:
1.
Small Business by the Numbers (Washington DC: Small Business Administration,
2004)
2.
http://www.uspto.gov/web/offices/ac/ido/oeip/taf/cst_all.htm
TAGS Business Profitability Competitive Advantage Competitors Market Oriented Business Marketing Marketing Skills Retail business Small Business Smart Decision Making Strategies Target Market Research
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