Competitor Analysis:   Love Your Enemy

Hello. This is Irino, a strategy consultant.

I will explain about competitor analysis.

 
 

Table of Contents in Business Plan
  1. Executive summary
  2. Background
  3. Management team
  4. Organization
  5. Vision
  6. Product/service
  7. Business model
  8. Sales/Marketing
  9. Market/Competitors
  10. Startup phase
  11. Growth phase
  12. Operations
  13. Human Resource
  14. Financials
  15. Fundraising
  16. Exit
  17. Risk management
  18. Project management

 
 
 

Do’s & Don’ts for Beginners

♦ Don’t say you have no competitor

Some people write “there are no competitors because our product is so unique”. However, experienced investors think if there’s no competitor it means there’s no market. Many of managers who claim to have no compatitors are lazy about market research. You need to discover or even create enemies, including free goods and services.

 
 

♦ Don’t assume everyone is your enemy

There’s only a slight difference between competitors and coorperators. You can possbily earn cash from your rival’s outsourcing needs. You can create prototypes, or test your market needs. Do not rule out the possilibity that you can cooporate with your competitors.

 
 

♦ Don’t list up only big boys

Some people list up only famous and large companies as competitors. But there must be startup competitors of your size. These small competitors are short-term benchmarks during your startup phase. Big competitors are not so meaningful or insightful when it comes to competitor analysis. Make sure you find small competitors with a close positioning to your own.

 
 
 

Do’s & Don’ts for Intermediate Entrepreneurs

♦ Don’t believe “voice of competitors”

You may be checking out web sites of your competititors for a research purpose. But it’s safe to assume that there is some propaganda in what your competitor says. Make sure you make an effort to listen to complains from your competitors’ customers or suppliers. If you discover their problems, you will have a big business opportunites.

 
 

♦ Don’t be ashamed of being a subcontractor

Some entrepreneurs, especially those who got independent from large companies, feel ashamed of doing subcontracting works under rivals.

It hurts your pride. But you need to be tough enough to seek balance between pride and reality. During startup stages, cash is the king.

 
 

♦ Use big boys as subcontractors

When it comes to deals with major corporations, some entrepreneurs think only two options:
(1)compete against them or (2)subcontract under them.

That’s a mentality of loser.

There’s a third option: use them as a subcontractor. If you secure customer interface on value chains, a SME can use a Fortune 500 company as a subcontractor.

 
 

♦ Plan where to lose

Some business plans say, “Our product is better than competitors’ in all aspects.” Catch-all strategy without selection and concentration doesn’t sound realistic for a startup with less resources than competitors. Decide which part you are willing to lose against competitors.

 
 
 

Do’s & Don’ts for the Master Class Entrepreneurs

♦ Name competitors you can’t beat

It sounds phony if a startup claims that it can beat all competitiors just by doing SWOT analysis.

Don’t be in denial. It’s better to say “There are no effective measures to win over Company A.” or “We are aiming for the No.2 IPO in the industry.”

 
 

♦ Analyze the future

As long as you analyze the past, your conclusion is more or less that your competitors are ahead of you and bigger than you. You won’t find much insight by digging up past facts, .

Analyze the future.

  • What will your competitors do in next year or two?
  • How will they react if we wage a price war?

Analyzing the future isn’t easy. You need to use your brain and defiant vision.

 
 

♦ Picture your rival’s face

Rivalry can be strong motivation for working hard. But it’s hard to feel a rivalry against a company, which is too abstract an entity to picture. You feel a rivalry against a person. Make an appointment with him, and meet him in the face, and you’ll picture your rival with a grudge when you go to bed every night.

 
 
 

Editor’s Postscript: The Pressure from 700 People

Last week, I produced two contesters in the largest business plan contest in Japan. 7 finalists gave presentations in front of 700 people. You might have watched in World Business Sattelite TV.

We got one-two finish!

Yeah!

The pressure from 700 audience was overwhelming. Imagine hundreds people scrutinizing your business plan and more nerve-wreckingly your ego.

We rehearsed our presentations time and time again. Still, it’s hard to deliver what you prepared.

But they nailed it. Good job!

 
 
 

That’s it for today. Thanks for reading my blog.

Irino

 
 

Yasutaka Irino, Linzy Consulting CEO
A strategy consultant
  • One-two finish in the largest business plan contest in Japan

  • One-two finish in Asian Entrepreneurship Award

  • No.1 in google "business plan"

  • Judge in the Cloud-Computing Awards

  • Write/Review +100 business plans a year

  • Meet +300 entrepreneurs a year

  • Large-scale project management
    e.g. +15,000 man-months post merger integration

  • Expertise: business planning, financing, IT, project management

  • Fortune Global 500 companies:
      bank, brokerage, card, SIer, etc

  • Startups:
      IT, cloud, bio, cosmetics, minor metals, aerospace, etc

  • Tokyo University -> University of British Columbia -> Oracle -> Headstrong -> Independent

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