Types of Competitor Research:
Secondary Research Resources
Market Research Class Presentations
The slides from the "Researching Your Competition" presentation from our latest Market Research Class series are an excellent resource if you are just getting started.
Who are my competitors?
When you start a business, you have a vision of what your product or service is going to be, but it is also important to ask yourself, “Who am I competing against?” Whenever you are providing a service or creating a product that people are willing to spend money on, there will always be other companies who are fighting for the same customers by providing a similar service or creating a similar product. For example, Uber, Lyft, yellow cabs, like the ones pictured below, and other car services are all providing their customers with car transportation services and are direct competitors. In addition to direct competitors, most industries and industry sectors will also have indirect competitors. For example, art galleries, museums, and concert halls can all be considered indirect competitors. Even though the offerings of these different businesses can be quite varied, they all fulfill the same consumer need, which is cultural or educational entertainment.
What will identifying my competitors do for me?
Looking at your competitors is a great way to determine your market strategy. For example, online businesses should be taking note of the navigation and the look and feel of their competitors' apps and web pages in addition to their pricing and offerings. Understanding all of the strengths and weaknesses of your competitors will allow you to come up with a strategy that will satisfy your customers.
Identifying your competition will help you determine where to locate your business if you plan on having a storefront. Some businesses, such as bars, do well when there are other similar businesses nearby, but some businesses, such as laundromats, succeed when they are the only option in an area.
Once you identify your competitors, you can use these companies to benchmark your financials. Researching your competitors's financials can give you a rough estimate of how much revenue you can expect, how many people you will need to hire, and rough estimates of what you should be spending on key business expenses, such as insurance.