Now that you’ve performed a SWOT Analysis on your business, it’s time to determine where you stand versus your competition.
There are numerous ways to do a competition analysis, but here’s how I suggest you start. Take a sheet of paper and turn it landscape, on the left hand side write your business name. Beneath your name, make a list of your competitors. This will include competitors based on theme (both Italian restaurants), proximity (other nearby restaurants or bars), concept (both sustainably minded), or hitting similar demographics (both appeal to middle income business people). You may have an idea already of who your closests competitors are, I would list those companies near the top of the column as you’ll want to see and compare them easily. Then fill out the rest of the column with decreasingly competitive businesses. You can limit to about 10. Anymore than that and it starts to become so large it’s ineffective.
Once you have your competitors listed, make several more columns. At the top of each column list a factor that customers use when determining whether to pick your business or your competitors. These will include things such as location, food quality, drink quality, service quality, ambience, prices, niche, unique features, and so forth. You may have a couple of other unique deciding factors that hit your customer base, otherwise you can start with the columns listed above.
With your business and that of each competitor rank yourself in each category. It may be helpful to write notes with each category as well such as; 9 for unique features, have the best outdoor area in the city, right on the river with a nearby boat dock. This will help you pick out important details of your competition quickly.
This takes some time and deep thought. Most importantly, it takes honesty. If your competitor is better than you in a category, put that down! If you don’t know where you truly fit versus your competition, you won’t be able to strategically compete against them. You will naturally be better in some categories and weaker in others.