Strengths and weaknesses of competitors

Almost all businesses have some sort of competition, so understanding competitors’ strengths and weaknesses is extremely important. A competitor is any business that sells the same or similar products or services. Businesses may want to know certain things about their competitors, such as their USP, price, quality, convenience, location, product range and customer service.

Unique selling point (USP)

USP stands for ‘unique selling point’. Examples of USPs include opening the first vegan restaurant in a neighbourhood, or selling high-quality products, such as unique designer handbags. Having a USP is a strength for a business. If an entrepreneur knows what their competitors’ USPs are, they can create their own USP that either rivals their competitors’, or is completely different.

Price

Price refers to how much a product or service costs to purchase. Knowing how much competitors charge for their products is very important. If a competitor sells a lot of similar products in the local area at a low price, an entrepreneur may also need to charge a low price in order to compete and make sure their products sell.

Quality

Quality refers to how well a product is made or how prestigious a service is. For example, a taxi and a luxury limousine could both get a customer to the same place, but a luxury limousine would provide a better quality of service. If a competitor offered a high-quality item, this would be seen as a strength of the competitor. However, if the competitor were selling a low-quality item, this would be seen as a weakness.

Convenience and location

Convenience refers to how easy something is to purchase, reach or use. If a competitor has a product that is very easy to use, then it is important for an entrepreneur to try to make their product just as easy to use, otherwise it is unlikely to sell as well as the competitor’s product.

Convenience is also linked to location. For example, if a café is situated next to a train station, it is convenient for people travelling by train. Being situated in a convenient location is likely be a competitor strength.

Product range

Product range refers to the number and types of products or services that are sold by a business. If a competitor only sells one product, this may be seen as a weakness as the competitor will have limited market reach. In contrast, if a competitor has a large product range, this could be seen as a strength, as the competitor is likely to be able to target a wider range of customers. It is usually important for an entrepreneur to make sure they have a varied product range.

Customer service

Customer service is extremely important for a small business. It refers to the service offered to customers by a business before, during and after a transaction has taken place. Most small businesses ensure they provide an excellent level of customer service, for example by serving customers quickly. If a competitor is slow at serving customers, this could be a weakness of the competitor.