Identify Stealth Competitors in Your Business Plan
You can usually spot direct competitors for your business plan pretty easily. They look a lot like you, offer similar products or services, and go after the same customers and market areas. But you have to watch out for less obvious competitors — known as stealth competitors — who serve the same customers you do, but in different, sometimes unexpected, ways.
Competition is almost always more than immediately meets the eye. Suppose that you’re starting a bakery. Your direct competitors are other bakeries within, say, a 10-mile radius. But under-the-radar threats lurk. Most obvious are the bakery sections of grocery stores and restaurants. A little more obscure are bakeries tucked in brewpubs, coffee shops, and health-conscious businesses, or home-based operations selling at increasingly popular farmer’s markets.
Competition also hides in grocery aisles, where consumers can buy bake-it-yourself mixes. Plus, weight-loss programs offer bakery-product alternatives. Dieticians work to curb bakery-product cravings. Even the fresh-fruit industry arises as a healthy option to your bakery offerings.
To understand all you’re up against, imagine yourself in your customers’ shoes and consider every possible alternative — near or far — to the solution your business offers. Here are a few examples:
The bookstore that used to compete with the bookstore around the corner now goes head-to-head with online booksellers, book download sites, and e-book sellers.
The local travel agent now competes with online sites that allow travelers to book hotels, flights, car rentals — even ski equipment — on their own, often with bonus benefits. Suddenly, travel agencies are lonely places, except for forward-thinking agents who read the competitive tea leaves and focused their efforts on particular market segments and services, such as group sales or customized tour packages.
When unmasking stealth competitors, don’t limit your thinking to Internet offerings. Here’s an example of a business blindsided by the impact of a research breakthrough: Makers of flea collars and flea shampoos are slowly fading away because of once-a-month wonder drugs that wipe out fleas.
After you uncover your stealth competitors, keep track of them, along with all your other competitors, whether stealth, direct, or indirect.