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What Is a Competitive Advantage?

  • How It Works
  • How To Build It
  • Competitive vs. Comparative Advantage

The Bottom Line

  • Business Essentials

Competitive Advantage Definition With Types and Examples

what is competitive edge in business plan

Yarilet Perez is an experienced multimedia journalist and fact-checker with a Master of Science in Journalism. She has worked in multiple cities covering breaking news, politics, education, and more. Her expertise is in personal finance and investing, and real estate.

what is competitive edge in business plan

Competitive advantage refers to factors that allow a company to produce goods or services better or more cheaply than its rivals. These factors allow the productive entity to generate more sales or superior margins compared to its market rivals. Competitive advantages are attributed to a variety of factors including cost structure, branding , the quality of product offerings, the  distribution network , intellectual property, and customer service.

Key Takeaways

  • Competitive advantage is what makes an entity's products or services more desirable to customers than that of any other rival.
  • Competitive advantages can be broken down into comparative advantages and differential advantages.
  • Comparative advantage is a company's ability to produce something more efficiently than a rival, which leads to greater profit margins.
  • A differential advantage is when a company's products are seen as both unique and of higher quality, relative to those of a competitor.

Investopedia / Michela Buttignol

Understanding Competitive Advantage

Competitive advantages generate greater value for a firm and its shareholders because of certain strengths or conditions. The more sustainable the competitive advantage, the more difficult it is for competitors to neutralize the advantage. The two main types of competitive advantages are comparative advantage and differential advantage.

A comparative advantage is when a firm can produce products more efficiently and at a lower cost than its competitors.

A differential advantage is when a firm's products or services differ from its competitors' offerings and are seen as superior. Advanced technology, patent-protected products or processes, superior personnel, and strong brand identity are all drivers of differential advantage. These factors support wide margins and large market shares.

For example, Apple is famous for creating innovative products, such as the iPhone, and supporting its market leadership with savvy marketing campaigns to build an elite brand. Another example is major drug companies. They can market branded drugs at high price points because they are protected by patents.

The term "competitive advantage" traditionally refers to the business world, but can also be applied to a country, organization, or even a person who is competing for something.

How To Build a Competitive Advantage

To build a competitive advantage, a company can use one of three main methods:

  • Cost: Provide offerings at the lowest price
  • Differentiation: Provide offerings that are superior in quality, service, or features
  • Specialization: Provide offerings narrowly tailored to a focused market

Competing on price can be effective, but if you slash prices too much you risk decreasing profit margins to an untenable level. Many firms opt instead to differentiate themselves in other ways, which helps preserve or expand their profit margin.

Benefits of a Competitive Advantage

When a company creates a durable competitive advantage, it sets itself apart from the competition and provides value to customers as well as stakeholders. By producing a desirable product or service that is better or more cost-effective than its competitors,' the company can make more sales, generate more revenue, and enjoy greater profits.

Strategies to Build a Competitive Advantage

To build a competitive advantage, a company must know what sets it apart from its competitors and then focus its message, service, and products with that difference in mind. Here are several strategies companies use to build a competitive advantage:

  • Research the market : Market research helps a company identify and define its target market, which can guide it in developing the most effective advantage.
  • Identify strengths : A company can find its unique strengths, especially relative to competitors, by reviewing products, services, features, positioning, and branding.
  • Evaluate finances : Companies can take a close look at their financial performance to spot profit centers and areas of stability, using financial statements and ratios.
  • Review operations : How efficient is a company's operations? Where is it effective, and where is there room for improvement? Consider customer service as well as production and supply chain management.
  • Consider human resources : The talent a company can attract as employees and leadership can make an important difference in the success of the business. Evaluating company culture, hiring, and staffing practices can help.

Competitive Advantage vs. Comparative Advantage

A firm's ability to produce a good or service more efficiently than its competitors, which leads to greater profit margins, creates a comparative advantage. Rational consumers will choose the cheaper of any two perfect substitutes offered. For example, a car owner will buy gasoline from a gas station that is 5 cents cheaper than other stations in the area. For imperfect substitutes, like Pepsi versus Coke, higher margins for the lowest-cost producers can eventually bring superior returns.

Economies of scale , efficient internal systems, and geographic location can also create a comparative advantage.

Comparative advantage does not imply a better product or service. It only shows the firm can offer a product or service of the same value at a lower price.

For example, a firm that manufactures a product in China may have lower labor costs than a company that manufactures in the U.S., so it can offer an equal product at a lower price. In the context of international trade economics, opportunity cost determines comparative advantages. 

Amazon ( AMZN ) is an example of a company focused on building and maintaining a comparative advantage. The e-commerce platform has a level of scale and efficiency that is difficult for retail competitors to replicate, allowing it to rise to prominence largely through price competition.

How Do I Know If a Company Has a Competitive Advantage?

If a business can increase its market share through increased efficiency or productivity, it would have a competitive advantage over its competitors.

How Can a Company Increase Its Competitive Advantage?

Lasting competitive advantages tend to be things competitors cannot easily replicate or imitate. Warren Buffet calls sustainable competitive advantages economic moats , which businesses can figuratively dig around themselves to entrench competitive advantages. This can include strengthening one's brand, raising barriers to new entrants (such as through regulations), and the defense of intellectual property.

Why Do Larger Companies Often Have Competitive Advantages?

Competitive advantages that accrue from economies of scale typically refer to supply-side advantages, such as the purchasing power of a large restaurant or retail chain. But advantages of scale also exist on the demand side—they are commonly referred to as  network effects . This happens when a service becomes more valuable to all of its users as the service adds more users. The result can often be a winner-take-all dynamic in the industry.

How Is Competitive Advantage Different From Comparative Advantage?

Comparative advantage mostly refers to international trade. It posits that a country should focus on what it can produce and export relatively the cheapest—thus if one country has a competitive advantage in producing both products A & B, it should only produce product A if it can do it better than B and import B from some other country.

A company's competitive advantage is the way it excels compared to its rivals. This advantage may be through cost leadership, differentiation, or focus. Identifying a company's competitive advantage helps show how it is positioned to be more successful than its competitors, creating more revenue and generating greater profits.

Young African Leaders Initiative. " Action Your Business Growth: The Importance of Knowing Your Competitive Advantage ."

U.S. Small Business Administration. " Market Research and Competitive Analysis ."

what is competitive edge in business plan

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How to Write a Competitive Analysis for Your Business Plan

Charts and graphs being viewed through a magnifying glass. Represents conducting a competitive analysis to understand your competition.

11 min. read

Updated January 3, 2024

Do you know who your competitors are? If you do, have you taken the time to conduct a thorough competitor analysis?

Knowing your competitors, how they operate, and the necessary benchmarks you need to hit are crucial to positioning your business for success. Investors will also want to see an analysis of the competition in your business plan.

In this guide, we’ll explore the significance of competitive analysis and guide you through the essential steps to conduct and write your own. 

You’ll learn how to identify and evaluate competitors to better understand the opportunities and threats to your business. And you’ll be given a four-step process to describe and visualize how your business fits within the competitive landscape.

  • What is a competitive analysis?

A competitive analysis is the process of gathering information about your competitors and using it to identify their strengths and weaknesses. This information can then be used to develop strategies to improve your own business and gain a competitive advantage.

  • How to conduct a competitive analysis

Before you start writing about the competition, you need to conduct your analysis. Here are the steps you need to take:

1. Identify your competitors

The first step in conducting a comprehensive competitive analysis is to identify your competitors. 

Start by creating a list of both direct and indirect competitors within your industry or market segment. Direct competitors offer similar products or services, while indirect competitors solve the same problems your company does, but with different products or services.

Keep in mind that this list may change over time. It’s crucial to revisit it regularly to keep track of any new entrants or changes to your current competitors. For instance, a new competitor may enter the market, or an existing competitor may change their product offerings.

2. Analyze the market

Once you’ve identified your competitors, you need to study the overall market. 

This includes the market size , growth rate, trends, and customer preferences. Be sure that you understand the key drivers of demand, demographic and psychographic profiles of your target audience , and any potential market gaps or opportunities.

Conducting a market analysis can require a significant amount of research and data collection. Luckily, if you’re writing a business plan you’ll follow this process to complete the market analysis section . So, doing this research has value for multiple parts of your plan.

What’s your biggest business challenge right now?

3. create a competitive framework.

You’ll need to establish criteria for comparing your business with competitors. You want the metrics and information you choose to provide answers to specific questions. (“Do we have the same customers?” “What features are offered?” “How many customers are being served?”)

Here are some common factors to consider including: 

  • Market share
  • Product/service offerings or features
  • Distribution channels
  • Target markets
  • Marketing strategies
  • Customer service

4. Research your competitors

You can now begin gathering information about your competitors. Because you spent the time to explore the market and set up a comparison framework—your research will be far more focused and easier to complete.

There’s no perfect research process, so start by exploring sources such as competitor websites, social media, customer reviews, industry reports, press releases, and public financial statements. You may also want to conduct primary research by interviewing customers, suppliers, or industry experts.

You can check out our full guide on conducting market research for more specific steps.

5. Assess their strengths and weaknesses

Evaluate each competitor based on the criteria you’ve established in the competitive framework. Identify their key strengths (competitive advantages) and weaknesses (areas where they underperform).

6. Identify opportunities and threats

Based on the strengths and weaknesses of your competitors, identify opportunities (areas where you can outperform them) and threats (areas where they may outperform you) for your business. 

You can check out our full guide to conducting a SWOT analysis for more specific questions that you should ask as part of each step. 

  • How to write your competitive analysis

Once you’ve done your research, it’s time to present your findings in your business plan. Here are the steps you need to take:

1. Determine who your audience is

Who you are writing a business plan for (investors, partners, employees, etc.) may require you to format your competitive analysis differently. 

For an internal business plan you’ll use with your team, the competition section should help them better understand the competition. You and your team will use it to look at comparative strengths and weaknesses to help you develop strategies to gain a competitive advantage.

For fundraising, your plan will be shared with potential investors or as part of a bank loan. In this case, you’re describing the competition to reassure your target reader. You are showing awareness and a firm understanding of the competition, and are positioned to take advantage of opportunities while avoiding the pitfalls.

2. Describe your competitive position

You need to know how your business stacks up, based on the values it offers to your chosen target market. To run this comparison, you’ll be using the same criteria from the competitive framework you completed earlier. You need to identify your competitive advantages and weaknesses, and any areas where you can improve.

The goal is positioning (setting your business up against the background of other offerings), and making that position clear to the target market. Here are a few questions to ask yourself in order to define your competitive position:

  • How are you going to take advantage of your distinctive differences, in your customers’ eyes? 
  • What are you doing better? 
  • How do you work toward strengths and away from weaknesses?
  • What do you want the world to think and say about you and how you compare to others?

3. Visualize your competitive position

There are a few different ways to present your competitive framework in your business plan. The first is a “positioning map” and the second is a “competitive matrix”. Depending on your needs, you can use one or both of these to communicate the information that you gathered during your competitive analysis:

Positioning map

The positioning map plots two product or business benefits across a horizontal and vertical axis. The furthest points of each represent opposite extremes (Hot and cold for example) that intersect in the middle. With this simple chart, you can drop your own business and the competition into the zone that best represents the combination of both factors.

I often refer to marketing expert Philip Kohler’s simple strategic positioning map of breakfast, shown here. You can easily draw your own map with any two factors of competition to see how a market stacks up.

Competitive positioning map comparing the price and speed of breakfast options. Price sits along the y-axis and speed along the x-axis.

It’s quite common to see the price on one axis and some important qualitative factor on the other, with the assumption that there should be a rough relationship between price and quality.

Competitive matrix

It’s pretty common for most business plans to also include a competitive matrix. It shows how different competitors stack up according to the factors identified in your competitive framework. 

How do you stack up against the others? Here’s what a typical competitive matrix looks like:

Competitive matrix example where multiple business factors are being compared between your business and two competitors.

For the record, I’ve seen dozens of competitive matrices in plans and pitches. I’ve never seen a single one that didn’t show that this company does more of what the market wants than all others. So maybe that tells you something about credibility and how to increase it. Still, the ones I see are all in the context of seeking investment, so maybe that’s the nature of the game.

4. Explain your strategies for gaining a competitive edge

Your business plan should also explain the strategies your business will use to capitalize on the opportunities you’ve identified while mitigating any threats from competition. This may involve improving your product/service offerings, targeting underserved market segments, offering more attractive price points, focusing on better customer service, or developing innovative marketing strategies.

While you should cover these strategies in the competition section, this information should be expanded on further in other areas of your business plan. 

For example, based on your competitive analysis you show that most competitors have the same feature set. As part of your strategy, you see a few obvious ways to better serve your target market with additional product features. This information should be referenced within your products and services section to back up your problem and solution statement. 

  • Why competition is a good thing

Business owners often wish that they had no competition. They think that with no competition, the entire market for their product or service will be theirs. That is simply not the case—especially for new startups that have truly innovative products and services. Here’s why:

Competition validates your idea

You know you have a good idea when other people are coming up with similar products or services. Competition validates the market and the fact that there are most likely customers for your new product. This also means that the costs of marketing and educating your market go down (see my next point).

Competition helps educate your target market

Being first-to-market can be a huge advantage. It also means that you will have to spend way more than the next player to educate customers about your new widget, your new solution to a problem, and your new approach to services. 

This is especially true for businesses that are extremely innovative. These first-to-market businesses will be facing customers that didn’t know that there was a solution to their problem . These potential customers might not even know that they have a problem that can be solved in a better way. 

If you’re a first-to-market company, you will have an uphill battle to educate consumers—an often expensive and time-consuming process. The 2nd-to-market will enjoy all the benefits of an educated marketplace without the large marketing expense.

Competition pushes you

Businesses that have little or no competition become stagnant. Customers have few alternatives to choose from, so there is no incentive to innovate. Constant competition ensures that your marketplace continues to evolve and that your product offering continues to evolve with it.

Competition forces focus & differentiation

Without competition, it’s easy to lose focus on your core business and your core customers and start expanding into areas that don’t serve your best customers. Competition forces you and your business to figure out how to be different than your competition while focusing on your customers. In the long term, competition will help you build a better business.

  • What if there is no competition?

One mistake many new businesses make is thinking that just because nobody else is doing exactly what they’re doing, their business is a sure thing. If you’re struggling to find competitors, ask yourself these questions.

Is there a good reason why no one else is doing it?

The smart thing to do is ask yourself,  “Why isn’t anyone else doing it?”

It’s possible that nobody’s selling cod-liver frozen yogurt in your area because there’s simply no market for it. Ask around, talk to people, and do your market research. If you determine that you’ve got customers out there, you’re in good shape.

But that still doesn’t mean there’s no competition.

How are customers getting their needs met?

There may not be another cod-liver frozen yogurt shop within 500 miles. But maybe an online distributor sells cod-liver oil to do-it-yourselfers who make their own fro-yo at home. Or maybe your potential customers are eating frozen salmon pops right now. 

Are there any businesses that are indirect competitors?

Don’t think of competition as only other businesses that do exactly what you do. Think about what currently exists on the market that your product would displace.

It’s the difference between direct competition and indirect competition. When Henry Ford started successfully mass-producing automobiles in the U.S., he didn’t have other automakers to compete with. His competition was horse-and-buggy makers, bicycles, and railroads.

Do a competitive analysis, but don’t let it derail your planning

While it’s important that you know the competition, don’t get too caught up in the research. 

If all you do is track your competition and do endless competitive analyses, you won’t be able to come up with original ideas. You will end up looking and acting just like your competition. Instead, make a habit of NOT visiting your competition’s website, NOT going into their store, and NOT calling their sales office. 

Focus instead on how you can provide the best service possible and spend your time talking to your customers. Figure out how you can better serve the next person that walks in the door so that they become a lifetime customer, a reference, or a referral source.

If you focus too much on the competition, you will become a copycat. When that happens, it won’t matter to a customer if they walk into your store or the competition’s because you will both be the same.

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Content Author: Tim Berry

Tim Berry is the founder and chairman of Palo Alto Software , a co-founder of Borland International, and a recognized expert in business planning. He has an MBA from Stanford and degrees with honors from the University of Oregon and the University of Notre Dame. Today, Tim dedicates most of his time to blogging, teaching and evangelizing for business planning.

what is competitive edge in business plan

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How to Write a Competitive Edge for Business

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Outline & Sample of a Marketing Plan

How to write a preface for a business plan, how to write a marketing analysis report.

  • What Factors Make the Difference Between a Good Business Plan & an Excellent One?
  • Definition of a SWOT Analysis

Establishing your competitive edge is an important part of the feasibility study you do prior to writing your startup business plan or your year-end strategic planning for next year's business expansion. It entails research into your competition, how their products differs from yours, how their operations differ from yours and how their marketing differs from yours. Your research should also include the demographics and buying habits of your target customer so you can identify or create your competitive advantage.

SWOT Analysis

List the qualities of your product, business operations, marketing and customer base. Then list how those qualities compare to your competition and what you can do to best that competitor. Once you have a list of qualities that give you a competitive advantage, perform a SWOT analysis, which is taking each point and determining the strengths, weaknesses, opportunities and threats associated with that product, operational system, marketing campaign or customer base.

Writing a description of your competitive edge, and how you will achieve and maintain it, may require revision and refining of your initial vision. This is why you put in research and evaluation time to identify holes in your planning and fantasies in your decision making prior to writing. Competitive edge is an elusive reality. Self-deception destroys many businesses because it leads you to think you have enough money, time, product superiority, operational superiority and marketing savvy to blow your competition out of the water.

A discussion of your competitive edge can be part of the section of your business plan that deals with the description of your company, or it can be the introduction to your marketing plan. It is also useful as a basis for your brochures, website copy and marketing presentations. Describe your product, and compare its strengths and weaknesses with respect to the competition's products. Then, indicate how your company compares to the competition and what opportunities or threats you have identified. Describe your target customers, their needs and buying habits, and why your product appeals to them. Then indicate your marketing plans for targeting and attracting those customers by educating them about the superiority of your product and services relative to those of your competition.

Reality Check

Always get an outside opinion before you deliver your description to an investor, bank or customer. Organizations such as the Service Corps of Retired Executives, known as SCORE, can provide you with unbiased advice regarding the reality of your assumptions so you have the opportunity to revise your description of your competitive edge, if needed. A clear and factual vision is one of the best competitive edges you can develop.

  • Entrepreneur: Market Strategies
  • Marketing MO: Competitive Positioning

Victoria Duff specializes in entrepreneurial subjects, drawing on her experience as an acclaimed start-up facilitator, venture catalyst and investor relations manager. Since 1995 she has written many articles for e-zines and was a regular columnist for "Digital Coast Reporter" and "Developments Magazine." She holds a Bachelor of Arts in public administration from the University of California at Berkeley.

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  • How to create a competitive analysis (w ...

How to create a competitive analysis (with examples)

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Competitive analysis involves identifying your direct and indirect competitors using research to reveal their strengths and weaknesses in relation to your own. In this guide, we’ll outline how to do a competitive analysis and explain how you can use this marketing strategy to improve your business.

Whether you’re running a business or playing in a football game, understanding your competition is crucial for success. While you may not be scoring touchdowns in the office, your goal is to score business deals with clients or win customers with your products. The method of preparation for athletes and business owners is similar—once you understand your strengths and weaknesses versus your competitors’, you can level up. 

What is a competitive analysis?

Competitive analysis involves identifying your direct and indirect competitors using research to reveal their strengths and weaknesses in relation to your own. 

[inline illustration] What is a competitive analysis (infographic)

Direct competitors market the same product to the same audience as you, while indirect competitors market the same product to a different audience. After identifying your competitors, you can use the information you gather to see where you stand in the market landscape. 

What to include in a competitive analysis

The purpose of this type of analysis is to get a competitive advantage in the market and improve your business strategy. Without a competitive analysis, it’s difficult to know what others are doing to win clients or customers in your target market. A competitive analysis report may include:

A description of your company’s target market

Details about your product or service versus the competitors’

Current and projected market share, sales, and revenues

Pricing comparison

Marketing and social media strategy analysis

Differences in customer ratings

You’ll compare each detail of your product or service versus the competition to assess strategy efficacy. By comparing success metrics across companies, you can make data-driven decisions.

How to do a competitive analysis

Follow these five steps to create your competitive analysis report and get a broad view of where you fit in the market. This process can help you analyze a handful of competitors at one time and better approach your target customers.

1. Create a competitor overview

In step one, select between five and 10 competitors to compare against your company. The competitors you choose should have similar product or service offerings and a similar business model to you. You should also choose a mix of both direct and indirect competitors so you can see how new markets might affect your company. Choosing both startup and seasoned competitors will further diversify your analysis.

Tip: To find competitors in your industry, use Google or Amazon to search for your product or service. The top results that emerge are likely your competitors. If you’re a startup or you serve a niche market, you may need to dive deeper into the rankings to find your direct competitors.

2. Conduct market research

Once you know the competitors you want to analyze, you’ll begin in-depth market research. This will be a mixture of primary and secondary research. Primary research comes directly from customers or the product itself, while secondary research is information that’s already compiled. Then, keep track of the data you collect in a user research template .

Primary market research may include: 

Purchasing competitors’ products or services

Interviewing customers

Conducting online surveys of customers 

Holding in-person focus groups

Secondary market research may include:

Examining competitors’ websites

Assessing the current economic situation

Identifying technological developments 

Reading company records

Tip: Search engine analysis tools like Ahrefs and SEMrush can help you examine competitors’ websites and obtain crucial SEO information such as the keywords they’re targeting, the number of backlinks they have, and the overall health of their website. 

3. Compare product features

The next step in your analysis involves a comparison of your product to your competitors’ products. This comparison should break down the products feature by feature. While every product has its own unique features, most products will likely include:

Service offered

Age of audience served

Number of features

Style and design

Ease of use

Type and number of warranties

Customer support offered

Product quality

Tip: If your features table gets too long, abbreviate this step by listing the features you believe are of most importance to your analysis. Important features may include cost, product benefits, and ease of use.

4. Compare product marketing

The next step in your analysis will look similar to the one before, except you’ll compare the marketing efforts of your competitors instead of the product features. Unlike the product features matrix you created, you’ll need to go deeper to unveil each company’s marketing plan . 

Areas you’ll want to analyze include:

Social media

Website copy

Press releases

Product copy

As you analyze the above, ask questions to dig deeper into each company’s marketing strategies. The questions you should ask will vary by industry, but may include:

What story are they trying to tell?

What value do they bring to their customers?

What’s their company mission?

What’s their brand voice?

Tip: You can identify your competitors’ target demographic in this step by referencing their customer base, either from their website or from testimonials. This information can help you build customer personas. When you can picture who your competitor actively targets, you can better understand their marketing tactics. 

5. Use a SWOT analysis

Competitive intelligence will make up a significant part of your competitor analysis framework, but once you’ve gathered your information, you can turn the focus back to your company. A SWOT analysis helps you identify your company’s strengths and weaknesses. It also helps turn weaknesses into opportunities and assess threats you face based on your competition.

During a SWOT analysis, ask yourself:

What do we do well?

What could we improve?

Are there market gaps in our services?

What new market trends are on the horizon?

Tip: Your research from the previous steps in the competitive analysis will help you answer these questions and fill in your SWOT analysis. You can visually present your findings in a SWOT matrix, which is a four-box chart divided by category.

6. Identify your place in the market landscape

The last step in your competitive analysis is to understand where you stand in the market landscape. To do this, you’ll create a graph with an X and Y axis. The two axes should represent the most important factors for being competitive in your market. 

For example, the X-axis may represent customer satisfaction, while the Y-axis may represent presence in the market. You’ll then plot each competitor on the graph according to their (x,y) coordinates. You’ll also plot your company on this chart, which will give you an idea of where you stand in relation to your competitors. 

This graph is included for informational purposes and does not represent Asana’s market landscape or any specific industry’s market landscape. 

[inline illustration] Identify your place in the market landscape (infographic)

Tip: In this example, you’ll see three companies that have a greater market presence and greater customer satisfaction than yours, while two companies have a similar market presence but higher customer satisfaction. This data should jumpstart the problem-solving process because you now know which competitors are the biggest threats and you can see where you fall short. 

Competitive analysis example

Imagine you work at a marketing startup that provides SEO for dentists, which is a niche industry and only has a few competitors. You decide to conduct a market analysis for your business. To do so, you would:

Step 1: Use Google to compile a list of your competitors. 

Steps 2, 3, and 4: Use your competitors’ websites, as well as SEO analysis tools like Ahrefs, to deep-dive into the service offerings and marketing strategies of each company. 

Step 5: Focusing back on your own company, you conduct a SWOT analysis to assess your own strategic goals and get a visual of your strengths and weaknesses. 

Step 6: Finally, you create a graph of the market landscape and conclude that there are two companies beating your company in customer satisfaction and market presence. 

After compiling this information into a table like the one below, you consider a unique strategy. To beat out your competitors, you can use localization. Instead of marketing to dentists nationwide like your competitors are doing, you decide to focus your marketing strategy on one region, state, or city. Once you’ve become the known SEO company for dentists in that city, you’ll branch out. 

[inline illustration] Competitive analysis framework (example)

You won’t know what conclusions you can draw from your competitive analysis until you do the work and see the results. Whether you decide on a new pricing strategy, a way to level up your marketing, or a revamp of your product, understanding your competition can provide significant insight.

Drawbacks of competitive analysis

There are some drawbacks to competitive analysis you should consider before moving forward with your report. While these drawbacks are minor, understanding them can make you an even better manager or business owner. 

Don’t forget to take action

You don’t just want to gather the information from your competitive analysis—you also want to take action on that information. The data itself will only show you where you fit into the market landscape. The key to competitive analysis is using it to problem solve and improve your company’s strategic plan .

Be wary of confirmation bias

Confirmation bias means interpreting information based on the beliefs you already hold. This is bad because it can cause you to hold on to false beliefs. To avoid bias, you should rely on all the data available to back up your decisions. In the example above, the business owner may believe they’re the best in the SEO dental market at social media. Because of this belief, when they do market research for social media, they may only collect enough information to confirm their own bias—even if their competitors are statistically better at social media. However, if they were to rely on all the data available, they could eliminate this bias.

Update your analysis regularly

A competitive analysis report represents a snapshot of the market landscape as it currently stands. This report can help you gain enough information to make changes to your company, but you shouldn’t refer to the document again unless you update the information regularly. Market trends are always changing, and although it’s tedious to update your report, doing so will ensure you get accurate insight into your competitors at all times. 

Boost your marketing strategy with competitive analysis

Learning your competitors’ strengths and weaknesses will make you a better marketer. If you don’t know the competition you’re up against, you can’t beat them. Using competitive analysis can boost your marketing strategy and allow you to capture your target audience faster.

Competitive analysis must lead to action, which means following up on your findings with clear business goals and a strong business plan. Once you do your competitive analysis, you can use the templates below to put your plan into action.

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How to Identify Your Competitive Strengths for Your Business Plan If you don't know what gives your new business an edge in the marketplace, here's how to figure out your unique strengths and tell others about them.

By Entrepreneur Staff • Jan 8, 2015

In their book Write Your Business Plan , the staff of Entrepreneur Media offer an in-depth understanding of what's essential to any business plan, what's appropriate for your venture, and what it takes to ensure success. In this edited excerpt, the authors explain just how important it is to identify what sets you apart and gives your business its competitive edge.

As a business owner, you're not alone, even if you own a one-person, homebased business. You also have your competition to worry about. And your financial backers will worry about your competition, too. Even if you truly are in the rare position of addressing a brand-new market where no competition exists, most experienced people reading your business plan will have questions about companies they suspect may be competitors. For these reasons, you should devote a special section of your business plan to identifying your competitors.

If you had to name two competitors in the athletic shoe market, you'd quickly come up with Nike and Reebok. But these by far aren't the only competitors in the sneaker business. They're just two of the main ones, and depending on the business you're in, the other ones may be more important. If you sell soccer shoes, for instance, Adidas is a bigger player than either of the two American firms. And smaller firms such as Etonic, New Balance and Saucony also have niches where they are comparatively powerful.

You can develop a list of competitors by talking to customers and suppliers, checking with industry groups and reading trade journals. But it's not enough to simply name your competitors—you need to know their manner of operation, how they compete.

Does a competitor stress a selective, low-volume, high-margin business, or do they emphasize sales growth at any cost, taking every job that comes along, whether or not it fits any coherent scheme or offers an attractive profit? Knowing this kind of information about competitors can help you identify their weaknesses as well as their names.

What makes you better?

This is one of the most important sections of your plan. You need to convince anyone thinking of joining with your company, as an investor or in another way, that you offer something obviously different and better than what's already available. Typically, this is called your competitive advantage, but it's not an overstatement to call it your company's reason for being.

Your competitive edge may lie in any of the your company's key distincitions, including cost, features, service, quality, distribution and so forth. Or it could be something totally different. The success of a retail convenience store located on an interstate highway, for instance, might depend almost entirely on how close it is to an exit ramp. Compare what you have to offer to that of your competitors, including your online competitors. Look for your competitive edge without knocking or denigrating your competition—your goal is not to say they aren't good but that you are a better choice—and explain why.

To figure out your competitive advantage, start by asking yourself these two critical questions:

1. Why do people buy from me instead of my competitors? Think about this question in terms of product characteristics. Ask your customers why they buy from you. Ask noncustomers why they don't. Ask suppliers, colleagues and anybody you can find why they're choosing you over a competitor. Use online surveys, read reviews on places like Yelp or Angie's List, and get a feel for what people like and don't like about the places that do what you do ... or are planning to do.

2. What makes me different and, I hope, better? Your competitive advantage isn't quite as important if your company is going to operate in the beginning stages of a new industry. When interest and sales in a new field are growing fast, you can survive and prosper even if you aren't clearly better than the rest. If, however, you plan to take market share away from established competitors in a mature industry, then competitive edge is all-important. Without a convincing case for being very different and much better than the rest, your business plan will have a hard time swaying anybody.

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10 Proven Strategies to Gain a Competitive Edge for Your Business in 2022

Saurabh

Small businesses, worldwide, find themselves losing their traditional competitive advantages with globalization and proliferation of internet in our daily lives. These businesses risk falling into the commodity trap if they do not strategize now to gain a competitive edge through differentiation.

You may think it does not apply to your business.

You would be wrong.

As a small business, your competition is not just the neighborhood small business, but also the Googles and Amazons of this world, and the tech-tools available to everyone.

How long before Amazon or Google start selling what you sell? How long before your local competitor will optimize their supply chain by utilizing Alibaba?

It is sooner than you may think.

In a world, where there are so many options for the consumer, making a prospect choose the solution you offer can be quite difficult. Today, every other business is trying its level best to gain a competitive edge over the other.

But how do you get this competitive edge over other businesses?

Well, here’s the thing - there’s no magic wand that gives your business a competitive edge. Instead, it is all about connecting your business to the right audience with the right message.

And the key to doing this is execute the 10 strategies we have outlined in this article.

Finding the right execution model will take experimentation. Yes, there will be failures on the way. But as long as you have your basics in place, and you persevere, you will find the model that works for you.

What is a competitive edge?

86% of the customers check out multiple competitors. It is quite simple then. You need to give your audience a reason to choose you. This reason is your competitive edge.

That reason is what will differentiate you from your competitors. You need to find a unique mix of values to offer to your audience. Once you find that, your business growth will depend on marketing strategies and customer retention.

Gaining a competitive edge can help you in reaping a lot of benefits. Here’s why a competitive edge is important:

  • Attract more new customers.
  • Gain the customer’s loyalty.
  • Stand out of the competition and shine.
  • Maximizing the revenue by expanding the customer base.

So, without further ado, here are the 10 strategies to gain a competitive edge for your small business. Please note, this is not a magic wand, but an effort to guide you in the right direction. You may be doing all or some of it, and that is a great thing, but it never hurts to revisit the concepts.

1. Build a unique online presence

Creating a solid digital presence is no more an option for businesses. With digitalization, every business is moving online. By creating digital footprints a business can reach a wider audience. Plus, social media can be used to share unique thoughts and ideas that can help in standing out.

Most importantly, online marketing is cheaper than traditional marketing. And, as a small business, you can save a lot of money and use it somewhere else.

With the proliferation of social platforms and search engines, it is not just about spending money on ads, or building a website. It is as much about engaging with the right audience via great content and distribution.

You can use easy website building tools to get you up and running in no time.

2. Leverage the content

Content is king! No business in the world can survive without content.

Use content marketing to reach out to your customers. A killer brand story will help you to position yourself in the market. Share your mission and vision with your audience and let them know what you are doing or offering.

Educate your audience and keep posting content. It will help in creating engagement and gaining the trust of the audience, and also create a competitive edge over others.

Distribution of content is as important as creating content. Email marketing is a powerful tool, in addition to social media, to distribute content effectively.

3. Identify and segment your audience

Segmenting will help your business to build and market your product/service effectively.

If you keep on targeting everyone, you will end up converting no one.

You need to properly analyze the market and identify your target audience. This way you will be able to direct your efforts in the right direction. Then you need to find out ways, to how you can reach out to them and tell them about your offer.

Tools like Deskera CRM let you segment audiences and contacts easily and dynamically with rules.

Go inch wide-mile deep. Stay focused on solving problems for selected personas through your product/offerings and direct your marketing efforts towards the same audience.

4. UX / Design / Visuals cannot be ignored

Visuals are important to gain positive attention.

You need an amazing logo, website, and social media handles to establish your brand. The content should be backed up by killer designs to elevate the brand. Get a proper brand color, theme, etc., and start designing banners, logos, and all.

UX should constantly evolve . Always be on the look out for making things easier for your users. Even if they don't find it hard today, you can bet your money that your competitor is trying real hard to build an even easier way. Don't let them win.

5. Incorporate customer feedback

Take into account the constructive feedback and make changes accordingly.

81% of the companies think customer experience is a competitive differentiator. Understanding your customer's psychology will help you gain the edge here.

Ask your customers for feedback and the ways you can improve your offer. Then, identify and implement the processes to improve your business. This will also make your customers feel wanted and help in making quick and efficient changes in the business.

6. Turn customers into evangelists

90% of people use customer service as the deciding factor to choose a brand.

Focus on building a deeper and stronger relationship with the customers. Provide them value and make sure to exceed their expectations. This will help in retaining the existing customers and attracting new customers.

Whether you are doing this or not can be easily measured with NPS (Net Promotor Score) surveys. One way to exceed customer expectations is to provide world class support.

Encourage your customers to leave reviews on sites like G2, Capterra, Trustpilot among others every time you solve a customer issue. This can greatly boost your perception as customer oriented business.

7. Experiment & innovate continuously

Innovation is the key to stand out from the competition. Experimentation leads to innovations.

Make sure to adapt as per the changes in the business environment. Keep on innovating and coming up with the new  ways of doing things. This will help in gaining a competitive edge over other businesses.

Innovation is not limited to technology.

You can innovate with stuff like what messaging and tone you use to communicate with your customers. Even the simplest changes, like changing the color of a button, can help boost conversion rates.

Here is a comprehensive marketing guide with 75 tips to help you get started.

8. Become an authority

Be the go-to reference for your target audiences.

Once you have identified your audience and their needs, make sure you create content that solves their problems, answers their questions and is all about them.

Take part in events/conferences attended by your target personas. Speak to them about you/your business is solving their problems. Be heard.

Build a training course for your prospective customers. help them get better, and cement your standing and authority.

9. Test your price elasticity

Don't let your product or offering be commoditized.

You are offering a unique value to your users through your products and offerings. Know what you are worth, and the only way to do that is to experiment with how much the market is willing to pay.

While it is never advisable to get into price wars, a timely discount offer on top of your prestige pricing can create the right desire in your prospects to part with their cash.

10. Use IT solutions to remove process bottlenecks

Technology is your friend. If you let it be. Unlocking your team's productivity is a no-brainer. Still, complete digitalization of business processes is something that 80% of small businesses have not even thought about.

How does that work out for them? How will it work out for you?

Not only are you competing with possibly a bigger company with deeper pockets, but also they are doing things faster than you. You know how these stories end.

Unless you level the playing field.

You may not have as much cash as your biggest competitor, but you can work better, smarter, and faster. And technology adoption, digitalization, is the way to do that.

Key Takeaways

The better you know your customers and their pain points, the better solution you can offer. This way, you can not just help them in the best possible way but also gain loyal customers and generate more revenue for your business. Plus, it will help in gaining a competitive edge.

Don't let your product/offering become a commodity. Instead, try to provide an exceptional offer and exceed the customer’s expectations. Focus on creating a brand that has something unique to offer.

Here’s a quick summary of the 10 strategies we covered to give your business the competitive edge:

  • Build a unique online presence
  • Leverage the content
  • Identify and segment your audience
  • UX / Design / Visuals cannot be ignored
  • Incorporate customer feedback
  • Turn customers into evangelists
  • Experiment & innovate continuously
  • Become an authority
  • Test your price elasticity
  • Use IT solutions to remove process bottlenecks

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what is competitive edge in business plan

Defining your competitive edge: Product positioning in your target market

Highlights (click to read).

  • It’s critical to create a competitive edge for your product within your target market.
  • To distinguish and position your product, be the first in the market and leverage your expertise to establish leadership.
  • Work constantly to maintain your competitive edge.
  • Quality, customer service and price do not provide a competitive edge.

Define your competitive edge by finding different ways of being unique in the marketplace. By differentiating your product, service, personnel or brand, you can establish a unique position in your market.

In today’s crowded market, many products can more easily mimic each other in terms of their attributes and offered benefits. The following strategies can help to distinguish your offering in the market and create a competitive edge.

Be first in the market

Buyers tend to stay with what they know. By being first to market, you will be able to take advantage of having no competition with your offering (also known as the first-mover advantage). However, it can take time to gain market acceptance of new ideas, and being first does not last forever.

Leverage your expertise: Establish leadership

Being perceived as an expert in your market bestows on you a level of trust, which transfers to your products. You can establish leadership in different areas, such as technology, science or sales. Develop your reputation and expertise with knowledge-sharing activities, such as writing blogs, articles or white papers, or presenting webinars.

Focus your market expertise

Establish your expertise by focusing on one particular niche to develop market specialization. Your market-specific expertise will set you apart from the competition. For example, instead of concentrating on a wide market encompassing all doctors, zero in on a niche within that market, such as pediatricians. This would enable you to specialize in, and appeal to, a pediatrician’s particular needs. Otherwise, your offering may not hold enough appeal to the wider audience to give you an advantage over your competition.

Make your products stand out as new and improved

Study your competitors and learn how they target a market problem. Ensure that the problem is an important one, and that your solution is better. Then reposition this market problem with your own unique solution. You can capitalize on your competitors’ marketing, but make sure to position your product as the“next generation.” For example, when microwave ovens were flooding the market, new entrants adjusted their positioning by marketing their products as “speed cookers” that evenly cooked food, a significant improvement over their microwave counterparts.

Note : By identifying market problems , you might see a problem/solution in a different way than your competitors, which will give you an advantage.

How to maintain your competitive edge

Once you have defined your competitive edge, you must work to maintain that upper hand. Your competitors will constantly work to improve their products and build their expertise, and so should you. Strive to ensure that your product continually solves your customers’ problems in new ways. By focusing on this goal, you can stay ahead of your competitors.

What is not a competitive edge

Avoid focusing on the following areas or characteristics, as they will not set you apart from your competition.

Quality and customer orientation

Although it is important to manufacture good quality products and be customer-oriented, these factors will not set you apart from the competition. Since your product is on the market, the tacit understanding is that the quality is good.

Customer service

It is assumed that you will work diligently to ensure customer satisfaction. This alone will not keep those customers coming back to you. According to Jack Trout, in  Differentiate or Die , it was found that 40% of satisfied customers would change brands without looking back.

Although pricing your products below market price might attract some buyers, it will not differentiate your product for long. Being cheaper than an alternative will not position you as unique. It will place you in a weak position because your competition could change their price to match yours at any time.

Breadth of line

Based on the success of “superstores,” you might be tempted to become“everything to everyone.” However, this is not differentiation. You might solve some problems for some customers, but it is more likely that you will not fully solve any customers’ problems.

Provide a specific solution to ensure that you solve real problems for a specific target market .

Summary: It’s critical to create a competitive edge for your product within your target market and to work hard to maintain this position against your competition.

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what is competitive edge in business plan

How to Write a Competitor Analysis for a Business Plan (with AI in 2023)

what is competitive edge in business plan

Competitor analysis is a critical component of any business plan. It helps you understand the landscape of your industry, identify opportunities for growth and differentiation, and craft strategies that take advantage of your competitors' weaknesses.

Here's a step-by-step guide on how to conduct a comprehensive competitor analysis, including how to leverage AI tools like Bizway to make the process more efficient and effective.

Step-by-Step Guide to Performing a Competitor Analysis

1. identify your competitors.

Understanding your competitive landscape begins with pinpointing who your direct and indirect competitors are.

Points to Consider

  • Direct Competitors : Those who offer similar products/services in the same market.
  • Indirect Competitors : Businesses targeting your customer base with different offerings.
  • Utilize market research and customer feedback to list competitors.
  • Identify geographical considerations - local, regional, or global competitors.

2. Analyze Their Products/Services

A thorough examination of competitors’ offerings unveils potential areas for differentiation and enhancement in your product/service line.

  • Feature comparisons.
  • Pricing structures.
  • Unique Selling Propositions (USPs).
  • Adopt a customer-centric approach to understand how consumers perceive competitors’ offerings.
  • Identify gaps in their product/service lines that you could explore.

3. Assess Their Marketing Strategy

Understanding competitors’ marketing approaches aids in crafting a superior, data-driven marketing strategy.

  • Target audience.
  • Key messages and value propositions.
  • Channel effectiveness and presence.
  • Use social listening tools to gauge their social media effectiveness.
  • Analyze the SEO performance of competitors’ websites.

4. Examine Their Sales Strategy

Investigating sales channels and tactics employed by competitors reveals market penetration strategies and potential areas for diversification.

  • Distribution channels.
  • Pricing and sales tactics.
  • Customer relationship management.
  • Secret shop to observe sales tactics and customer experiences.
  • Review customer feedback on their purchasing experience.

5. Analyze Their Strengths and Weaknesses

Identifying what competitors excel in and fall short on enables strategic decision-making in exploiting market opportunities.

  • Operational efficiency.
  • Customer service quality.
  • Brand reputation and loyalty.
  • Conduct a SWOT analysis (Strengths, Weaknesses, Opportunities, Threats) for each competitor.
  • Leverage customer reviews and testimonials to gauge reputation.

Using AI for Competitor Analysis

Automated data collection.

AI automates the harvesting of data from myriad sources, ensuring robust research while saving time.

  • Use AI tools to scrape and aggregate data from competitors' websites, social media, and customer review platforms.
  • Ensure the data is categorized and stored systematically for easy analysis.

Real-Time Updates

AI provides a competitive edge by monitoring and reporting real-time updates on competitor activities.

  • Set up AI monitoring for specific competitor activity: product launches, PR releases, or marketing campaigns.
  • Ensure to leverage real-time data to inform swift strategic adjustments.

Predictive Analytics

Predictive analytics via AI deciphers patterns and anticipates future competitor moves, positioning your business proactively.

  • Leverage AI to analyze historical data for predicting future trends.
  • Utilize these insights to anticipate and formulate preemptive strategies.

Using Bizway for Competitor Analysis and Business Planning

One such AI tool that can revolutionize your competitor analysis process is Bizway . Bizway is an AI-powered business planning and research app that can help you research your competitors and write your entire competitor analysis with just a few clicks. Moreover, Bizway can assist you in writing your entire business plan, saving you time and providing you with expert-level planning documents.

With Bizway, you can automate the process of generating clear, concise planning docs across all areas of business, from an SEO Content Plan to User Onboarding Plan. It also helps fill knowledge gaps in areas of business you're not well-versed in.

So, whether you're a solopreneur, a small business owner, or an aspiring entrepreneur still in school, Bizway is the AI assistant you need to take your business planning to the next level.

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Automate 100s of tasks every week & grow your business faster⚡

Create your first AI assistant & project in minutes.⚡

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How to Write Competitive Analysis in a Business Plan (w/ Examples)

The Competitive Analysis Kit

Free Competitive Analysis Kit

  • Vinay Kevadia
  • January 9, 2024

13 Min Read

competitive analysis in a business plan

Every business wants to outperform its competitors, but do you know the right approach to gather information and analyze your competitors?

That’s where competitive analysis steps in. It’s the tool that helps you know your competition’s pricing strategies, strengths, product details, marketing strategies, target audience, and more.

If you want to know more about competitor analysis, this guide is all you need. It spills all the details on how to conduct and write a competitor analysis in a business plan , with examples.

Let’s get started and first understand the meaning of competitive analysis.

What is Competitive Analysis?

A competitive analysis involves collecting information about what other businesses in your industry are doing with their products, sales, and marketing.

Businesses use this data to find out what they are good at, where they can do better, and what opportunities they might have. It is like checking out the competition to see how and where you can improve.

This kind of analysis helps you get a clear picture of the market, allowing you to make smart decisions to make your business stand out and do well in the industry.

After having a brief knowledge of what a competitive analysis is, let’s understand how to conduct it:

How to Conduct a Competitive Analysis?

  • Identify your direct and indirect competitors
  • Study the overall market space
  • Prepare a competitive framework
  • Take note of your competition’s strategies
  • Perform a SWOT Analysis of your competitors

1. Identify Your Direct and Indirect Competitors

First things first — identify all your business competitors and list them. You can make the final list later, but right now jot down all the competitors including new competitors.

Explore your competitors using Google, social media platforms, or local markets. Then differentiate them into direct or indirect competitors. And then distinguish them into direct or indirect competitors.

Direct competitors

Businesses offering the same products or services, targeting a similar target market, are your direct competitors.

These competitors operate in the same industry and are often competing for the same market share.

Indirect competitors

On the other hand, indirect competitors are businesses that offer different products or services but cater to the same target customers.

While they may not offer identical solutions, they compete for the same customer budget or attention. Indirect competitors can pose a threat by providing alternatives that customers might consider instead of your offerings.

2. Study the Overall Market

Now that you know your business competitors, deep dive into the market research. The research should be a combination of both primary and secondary research methods.

Primary research

It means being involved in getting the information directly from customers or by buying the product itself. Some examples of primary market research methods include:

  • Purchasing competitors’ products or services
  • Conducting interviews with customers
  • Administering online surveys to gather customer insights

Secondary research

The secondary research involves utilizing pre-existing gathered information from some relevant sources. Some of its examples include:

  • Scrutinizing competitors’ websites
  • Assessing the current economic landscape
  • Identifying technological advancements

Have a good understanding of the market at this point before you proceed with the next step.

3. Prepare a Competitive Framework

Creating a competitive framework is like charting a strategic roadmap for your business in the competitive landscape. It includes defining your USPs, market positioning, and various strategies.

Establishing your competitive positioning clarifies where your business stands among competitors.

Plan how to make your product or service stand out by figuring out ways to make it different to stand out, whether it’s through new features, better quality, or excellent customer service.

Craft unique value propositions that resonate with your target audience, communicating the benefits of choosing your offerings. This framework serves as a compass for crucial business decisions, ensuring alignment with your strategic positioning.

By consistently referencing this framework, your business can effectively meet customer needs, fostering satisfaction and loyalty through tailored products, services, and interactions.

4. Take Note of Your Competition’s Strategies

By stepping into your competitors’ research, you will learn what strategies they use to market their products or services and how they engage with their customers.

This will motivate you to do something more for customers and give you an idea of what your consumers like.

Start by analyzing their marketing strategies, such as sales and marketing channels, promotional activities, and branding strategies. Understand how they position themselves in the market and what USPs they emphasize.

Evaluate their pricing strategies and offerings, and keep an eye on their distribution channel to better understand your competitors. For example, here are the pricing strategies of a barber shop and its competitors:

This information allows you to make informed decisions about your strategies, helping you identify opportunities for differentiation and improvement.

5. Perform a SWOT Analysis of Your Competitors

You would love to know the opportunities and threats of your business, right? To be prepared for it when the time comes.

Well, conducting a SWOT analysis is like the same, it is more about getting to know about your strengths, weaknesses, opportunities, and threats. It also helps you understand your competitive edge in the market.

Whereas strengths and weaknesses focus on internal aspects of your company — opportunities and threats examine the external factors related to the industry and market.

Things to include in your SWOT analysis are:

It includes the positive features of your internal business operations. For example, it might include a strong brand, skilled workforce, innovative products/services, loyal customer base, etc.

It includes all the hindrances of your internal business operations. For example, it might include limited resources, outdated technology, weak brand recognition, inefficient processes, etc.

Opportunities

As the name says, it is all about the opportunities that will come your way in the near or far future. It is mainly about the external factors related to the market or industry trends.

For example, it might include emerging markets, technological advancements, changing consumer trends, profitable partnerships in the future, etc.

You should include any external factor that poses a challenge or any risk for your business in this section. For example, it might include intense competition, economic downturns, regulatory changes, or any advanced technology disruption.

These were the elements to help you conduct the competitive market analysis. Let us now go through how to write it in a business plan.

what is competitive edge in business plan

Want to Perform Competitive Analysis for your Business?

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How to Write Competitive Analysis in a Business Plan

1. determine who your readers are.

Know your audience first, because that will change the whole context of your competitor analysis business plan.

The competitive analysis section will vary depending on the intended audience is the team or investors.

Consider the following things about your audience before you start writing this section:

Internal competitor plan (employees or partners)

Objective: The internal competitor plan is to provide your team with an understanding of the competitive landscape.

Focus: The focus should be on the comparison of the strengths and weaknesses of competitors to boost strategic discussions within your team.

Use: It is to leverage the above information to develop strategies that highlight your strengths and address your weaknesses.

Competitor plan for funding (bank or investors)

Objective: Here, the objective is to reassure the potential and viability of your business to investors or lenders.

Focus: This section should focus on awareness and deep understanding of the competitive landscape to persuade the readers about the future of your business.

Use: It is to showcase your market position and the opportunities that are on the way to your business.

This differentiation is solely to ensure that the competitive analysis serves its purpose effectively based on the specific needs and expectations of the respective audience.

2. Describe Competitive Advantage

One of the most important things in the competitive analysis is to know your competitive advantage and gain insight into how you are a better option than competitors.

Your competitive analysis should pinpoint the competitive advantage based on the competitors’ product line or service and market segment, pricing, and other such situations. Some of the points you might include in this section are:

  • Product/service differentiation in terms of quality or innovation
  • Cost leadership or competitive pricing
  • Brand reputation
  • Customer service excellence
  • Diverse and effective marketing strategy

3. Explain your strategies

Your competitor analysis section should not only highlight what opportunities or threats your business has. It should also mention that what will be the strategies to overcome those threats or capitalize on the opportunities.

It could be for taking a top-notch quality for your products or services, exploring the unexplored market segment, or having creative marketing strategies.

4. Know the pricing strategy

To understand the pricing strategy of your competitors, there are various aspects you need to have information about. It involves knowing their pricing model, evaluating their price points, and considering the additional costs, if any.

One way to understand this in a better way is to compare features and value offered at different price points and identify the gaps in competitors’ offerings.

Once you know the pricing structure of your competitors, compare it with yours and get to know the competitive advantage of your business from a pricing point of view.

Competitive analysis example

Need help writing the competitive analysis section of your business plan? Here’s the barbershop competitive analysis example to help you get started.

1. List of competitors

Direct & indirect competitors.

The following retailers are located within a 5-mile radius of J&S, thus providing either direct or indirect competition for customers:

Joe’s Beauty Salon

Joe’s Beauty Salon is the town’s most popular beauty salon and has been in business for 32 years. Joe’s offers a wide array of services that you would expect from a beauty salon.

Besides offering haircuts, Joe’s also offers nail services such as manicures and pedicures. In fact, over 60% of Joe’s revenue comes from services targeted at women outside of hair services. In addition, Joe’s does not offer its customers premium salon products.

For example, they only offer 2 types of regular hair gels and 4 types of shampoos. This puts Joe’s in direct competition with the local pharmacy and grocery stores that also carry these mainstream products. J&S, on the other hand, offers numerous options for exclusive products that are not yet available in West Palm Beach, Florida.

LUX CUTS has been in business for 5 years. LUX CUTS offers an extremely high-end hair service, with introductory prices of $120 per haircut.

However, LUX CUTS will primarily be targeting a different customer segment from J&S, focusing on households with an income in the top 10% of the city.

Furthermore, J&S offers many of the services and products that LUX CUTS offers, but at a fraction of the price, such as:

  • Hairstyle suggestions & hair care consultation
  • Hair extensions & coloring
  • Premium hair products from industry leaders

Freddie’s Fast Hair Salon

Freddie’s Fast Hair Salon is located four stores down the road from J&S. Freddy’s has been in business for the past 3 years and enjoys great success, primarily due to its prime location.

Freddy’s business offers inexpensive haircuts and focuses on volume over quality. It also has a large customer base comprised of children between the ages of 5 to 13.

J&S has several advantages over Freddy’s Fast Hair Salon including:

  • An entertainment-focused waiting room, with TVs and board games to make the wait for service more pleasurable. Especially great for parents who bring their children.
  • A focus on service quality rather than speed alone to ensure repeat visits. J&S will spend on average 20 more minutes with its clients than Freddy’s.

While we expect that Freddy’s Fast Hair Salon will continue to thrive based on its location and customer relationships, we expect that more and more customers will frequent J&S based on the high-quality service it provides.

2. Competitive Pricing

John and Sons Barbing Salon will work towards ensuring that all our services are offered at highly competitive prices compared to what is obtainable in The United States of America.

We know the importance of gaining entrance into the market by lowering our pricing to attract all and sundry that is why we have consulted with experts and they have given us the best insights on how to do this and effectively gain more clients soon.

Our pricing system is going to be based on what is obtainable in the industry, we don’t intend to charge more (except for premium and customized services) and we don’t intend to charge less than our competitors are offering in West Palm Beach – Florida.

what is competitive edge in business plan

3. Our pricing

what is competitive edge in business plan

  • Payment by cash
  • Payment via Point of Sale (POS) Machine
  • Payment via online bank transfer (online payment portal)
  • Payment via Mobile money
  • Check (only from loyal customers)

Given the above, we have chosen banking platforms that will help us achieve our payment plans without any itches.

4. Competitive advantage

what is competitive edge in business plan

5. SWOT analysis

what is competitive edge in business plan

Advantages of a Competitive Environment

Somewhere we all think, “What if we had no competition?” “What if we were the monopoly?” It would be great, right? Well, this is not the reality, and have to accept the competition sooner or later.

However, competition is healthy for businesses to thrive and survive, let’s see how:

1. It pushes you to innovation and improvement

In the competitive environment, a businessperson might get a new idea to bring innovation to the market to keep their products and services trending. This way innovation is promoted.

2. Competition validates your idea

Having a good idea becomes valid when others are developing similar products or services. A competitive market confirms that there is a market for your product and service. It also implies that the expenses of marketing and educating your target customers might likely decrease.

3. Efficiency and cost control

Businesses competing with each other get the motivation to operate efficiently to reduce costs and offer competitive prices. This thing for more sales benefits both businesses and customers.

4. Market responsiveness

A competitive environment forces businesses to be quick to adapt to market changes and customer demands. Companies need to adapt quickly to stay relevant and meet consumer preferences.

Competitive Analysis is critical, but don’t go overboard

Whether you are starting a new business or have an experience in the same field, gaining insight from your competitors will always be beneficial for your business.

Remember: Competitive analysis is essential for your business, but you can not assume all things positive on your side. Be realistic and practical while both conducting and writing this section.

Not only competitive analysis, but the whole business plan is necessary for any business to stay on the path. It will be your guide whenever your business is in any problem.

For assistance, you can visit our business plan writing guide . Additionally, we wish you all the luck in your competitive analysis journey.

Build your Business Plan Faster

with step-by-step Guidance & AI Assistance.

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Frequently Asked Questions

Is swot analysis a competitive analysis.

SWOT analysis is a component of a competitive analysis, not the whole competitive analysis. Competitive analysis covers a broad topic of analyzing competitors and knowing the competitive advantage.

What Tools Can I Use for Competitor Analysis?

Executing a thorough competitor analysis requires the use of various tools to collect and analyze data. Here are some tools you can consider:

  • Google Alerts
  • Social media analytics
  • Google Trends
  • Google Analytics
  • Competitors’ website

What are the 5 parts of a competitive analysis?

The main five components to keep in mind while having a competitor analysis are:

  • Identifying the competitors
  • Analyzing competitor’s strengths and weaknesses
  • Assessing market share and trends
  • Examining competitors’ strategies and market positioning
  • Performing SWOT analysis

What is the difference between market analysis and competitive analysis?

Market analysis involves a comprehensive examination of the overall market dynamics, industry trends, and factors influencing a business’s operating environment.

On the other hand, competitive analysis narrows the focus to specific competitors within the market, delving into their strategies, strengths, weaknesses, and market positioning.

About the Author

what is competitive edge in business plan

Vinay Kevadiya

Vinay Kevadiya is the founder and CEO of Upmetrics, the #1 business planning software. His ultimate goal with Upmetrics is to revolutionize how entrepreneurs create, manage, and execute their business plans. He enjoys sharing his insights on business planning and other relevant topics through his articles and blog posts. Read more

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8 Ways to Develop a Competitive Edge in Business

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It hardly matters anymore which niche you occupy, you need a competitive edge in business to stay in the game. There’s no denying that competition out there is fierce . As a business owner, you have to make sure you stay at the top of your game if you want to achieve your goals.

If you are relatively new in your particular market, you’re no doubt looking for ways to develop a competitive edge that differentiates you from the crowd. Branding is vital not only for driving sales but also for making it clear how what you have to offer is innovative and unavailable elsewhere.

1. High-End SEO Services Provide Your Competitive Edge in 2021

In today’s digital age, owning a successful business is all about getting your SEO right. This means that you have to make sure your business appears on the first page of Google search results. To achieve this somewhat daunting goal, you’ll almost certainly need to make sure that you outsource your SEO services to a reputable agency.

Any high-quality SEO agency understands and implements only the latest in SEO trends. They ensure that your SEO campaign is 100% compatible with the trends that have been set as a benchmark by Google. In today’s marketplace, consumers begin their decision-making process by grabbing their phones and searching keywords and phrases. If you’re not investing in top-notch SEO, you have cut yourself off from this exploding market segment.

2. Attract the Best Talent in the Market

Your business can only flourish if you have the best people working for your brand. It stands to reason that to have a competitive edge in any business endeavor, you’ll need to hire the best talent in that market.

Of course, hiring the best talent requires investment, and not just in payroll. For example, you’ll want to create a corporate culture that entices talented people to join your team. Apart from that, you’ll have to offer market-competitive salaries and make sure that you give them incentives and bonuses to prevent them from jumping to another company.

3. Maintain a Presence at Industry Events

If you want to make sure your business stays at the top of its game, then you have to show up at all of the major industry-related events. Failure to keep your name in front of potential customers — and your competition — courts the risk of your company being forgotten or considered as an artifact from the past or an also-ran.

If, like many, you are tempted to think that industry events are merely a marketing strategy, you might want to rethink that position. Maintaining a high-visibility presence at industry-related events opens many opportunities for your business. Additionally, it validates the legitimacy of your company and demonstrates to potential customers that you are keen to promote your business and a force to be contended with.

4. Take a Second Look at Your Product Pricing

It may seem counterintuitive, but if you want to establish a competitive edge over other players in your market niche, consider pricing your product on the high end. Most businesses are reluctant to embrace this strategy, fearful the higher pricing will backfire and result in tepid sales. However, if you are offering a high-quality product or service, then you should set your pricing based on that assessment.

Of course, you must make sure that your product or services meet all the standards of the industry you’re in. Once you are sure of that, let the price of your product speak to its quality. If you believe in the higher value of your offering over that of the competition, then your pricing needs to reflect both the real value and your belief in it. Do your research, assess your products and services honestly, and let your pricing speak to the quality of your brand.

5. Give Your Sales System Its Own Competitive Edge

You might be surprised to learn how the latest in sales technology can take your company to the next level and help you attract and retain more customers. To this day, many businesses continue to stumble at the checkout lane. Making sure you can accommodate all popular forms of payment, whether traditional or electronic, is as important as getting your customers in the door in the first place.

Incorporating new sales technologies into your business will help you gain customer trust. Keeping pace with newer transaction tech gives your business operations an air of sophistication and competence. As you implement debit card transactions, ApplePay, or any other newer form of payment, make sure you don’t leave your longstanding cash or check customers behind, though. Accepting the widest possible forms of payment helps make sure you maintain your competitive edge in business.

6. Optimize Your Website for Voice Search

More than 27% of potential customers are now using voice search when looking for products and services. That percentage is only going to grow, which means that you must optimize your website for voice search. Having a competitive edge in this category will help you snag new business from anyone using their phone or built-in GPS to find what you have to offer.

All you have to do to optimize your website for voice search is establish the keywords that are most relevant to your business. It’s important to note that you must be very careful about the keywords that you select as voice searches are typically long tail and precise. This simply means that the user offers precise instructions hoping to see only the most relevant results. It’s critical that you pick your keywords while always keeping user intent in mind.

7. Make Your Customers Feel Special

You already know that your customers have plenty of options. They can easily go somewhere else if they don’t feel special doing business with you. In the 21st century, it’s important to make sure that your customers feel like they are special.

To achieve this, you’ll want to devote a great deal of attention to your customer care department. Hire only front-line staff who know how to deal with customers with patience, grace, and professionalism. Always remember that customer loyalty is something that is hard to achieve but easy to lose. Loyal customers go a long way. When consistently treated with respect and courtesy, they can even serve as unofficial brand ambassadors for your business.

8. Create a YouTube Channel 

YouTube is the second-most-popular search engine after Google. You might think that your product or service does not lend itself to video. Nowadays, however, you can’t afford to leave this resource untapped. Maintaining a competitive edge in business now requires quality video.

You simply can’t afford to not have a presence on YouTube anymore. Start small with product or service demos and then build. Keep in mind it’s better to have five quality videos on your channel than 35 sloppy or boring ones. So many tools are available now that have served to drastically drive down the costs formerly associated with video production. Spend some time seeing how other businesses in your niche have leveraged this powerful tool.

Maintaining a competitive edge in business takes work. If it were easy, everyone would do it. Plan out your work week with time slots set aside for one or more of the ideas presented above. Feel free to experiment and see what works best in your setting .

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Competitive Strategy: Definition, Types, and Execution

Ivan Kitov

Planning for the fast-approaching future allows companies to act against short-termism and biased perspectives. In this way, they are better able to identify, recognize, and seize opportunities and innovations.

Although it seems challenging to rationally evaluate the future effects of current decisions, developing a suitable competitive strategy is a good way to steer an organization in the right direction.

In this article, we define competitive strategy, list the different approaches, and provide a step-by-step guide to building a plan.

Table of Contents

What is a competitive strategy, types of competitive strategies, how do you implement a competitive strategy, the bottom line.

A competitive strategy is simply a company’s long-term action plan of how to gain an edge over its rivals. The management weighs a firm’s strengths, weaknesses, and unique features against those of its competitors to draft a winning course of action. In a way, this is an instrument for outperforming competitors.

In business, being above average or superior means having a competitive advantage, which you gain by implementing a proper competitive strategy. So, the main goal lies in strengthening a business market position rather than maintaining the current one. Companies that offer similar products to customers do require such a long-term plan of action to thrive.

Most importantly, a competitive strategy should be unique—no other competitor in the market should be able to copy it. A company with an easy-to-replicate plan does not hold an edge.

Since there is no universal approach to attracting customers and keeping the engines running, companies often use one or more of the following.

  • Offensive strategy
  • Defensive strategy
  • Low-cost strategy (cost leadership)
  • Predatory pricing
  • Differentiation strategy

Offensive Strategies

Companies that employ offensive strategies directly target competitors from which they want to capture market share. This is an active, even aggressive competitive business strategy typically involving large investments to stay ahead of the curve.

Defensive Strategies

Defensive strategies , on the other hand, are a counteract to offensive approaches. They focus on offering high-quality products and services, building brand loyalty, and retaining valuable customers that can potentially be taken away by competitors.

Cost Leadership Strategies

A cost leadership strategy entails having the lowest cost of production in the industry to establish a favorable position. A firm can use it defensively (to protect its market position) or offensively (to gain market share).

Either way, being the most cost-efficient business gives you the chance to dictate the market and charge lower prices than the rest of the competition. Generally, firms that follow a low-cost competitive strategy must have tight cost controls and efficient operating and reporting systems.

Predatory Pricing Strategies

Predatory pricing is an extreme variation of the low-cost strategy. That is, prices are set so low that it drives out the competitors. At first, this aggressive strategy seems beneficial for customers because they buy products cheaper.

But once the predator company drives out the competition, it increases its prices and generates even higher returns than it did before, with customers having nowhere else to go. Fortunately, this practice is often illegal. Yet, such competitive business strategies can be seen in many industries.

Differentiation Strategies

Differentiation involves making your products or services distinct and more attractive than those of your competitors. This could be in the form of additional features, functionality, support, and brand image. In practice, successful differentiation works wonders! Of course, one needs to properly match the cost with the client’s perceived value.

The following is an example of how this competitive strategy works in practice.

Suppose you are a coffee shop owner. Your coffee and bagels are the finest catch in town. You pick the ingredients with attention to detail and rely on top-notch quality. However, your production cost is steep: $40 per order. So, you sell a Brazilian coffee + bagel for a total of $70 per set.

How many people, do you think, will stop by to grab a bite and a cup of coffee from you on their way to work? Not many… Most of them will probably prefer the polite uncle working at the local Deli whose prices are thrice as low as yours.

Every organization follows a few basic steps when developing its competitive strategy. They concern the scope and range of a business as well as its vision and products.

Below, you can find the main phases a company goes through to build a competitive strategy:

1.      Define a firm’s business purpose.

It is crucial to identify what the firm does to contribute to consumers’ lives and experiences. This is the reason why customers buy its products or services.

2.      Outline core competencies.

Next, define the unique tangible and intangible attributes of a company. These can be the speed of last-minute product and service delivery, staff expertise, product design—anything that makes a client choose you over your rivals.

3.      Determine the primary business growth method.

Next, business owners must decide on a growth strategy and a business direction. Obviously, an acquisition will require a different competitive strategy than a market expansion.

4.      Establish key market priorities and products.

At this stage, companies determine the products and market segments that contribute to revenue significantly and identify what is still to be improved and revised on that front.

5.      Specify goals for the future.

Goals should describe the things a company strives to achieve, with its mission and vision duly considered.

6.      Identify potential obstacles.

Companies must be proactive enough to foresee future problems and solve them promptly when the time comes. In this way, they can estimate their competitive strategy’s compatibility with a certain obstacle in the long run.

7.      Revisit existing marketing strategies.

The firm’s market concentration and current objectives should align with its competitive strategy. Otherwise, they must be revised.

8.      Use the power of competitive intelligence.

A rather modern concept, competitive intelligence involves gathering data about competitors and analyzing it internally. Note that this will mostly include publicly available information that’s in line with data protection policies. Running through your rivals’ Annual reports, for example, will help evaluate their market and financial positions.

Whatever competitive strategy a firm chooses, it all comes down to building brand loyalty, increasing profits, and making a difference for consumers. Some may opt for a combination of existing strategies, while others develop their own. Ultimately, the goals remain the same; it’s the uniqueness of the approach that brings about the change and effective implementation.

The topic is covered extensively in Michael E. Porter’s Competitive Strategy: Techniques for Analyzing Industries and Competitors —a must-read for every finance professional. You can also read our summary of Porter’s Five Forces Model . And to learn how to create a winning competitive strategy, take our Introduction to Business Analytics , Corporate Strategy , and Marketing Strategy courses.

Learn from our expert instructors, build your skills through practical exercises, and obtain verifiable certificates of achievement. Sign up and try our training for free.

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How to Write the Competitor Analysis Section of the Business Plan

Writing The Business Plan: Section 4

Susan Ward wrote about small businesses for The Balance for 18 years. She has run an IT consulting firm and designed and presented courses on how to promote small businesses.

what is competitive edge in business plan

The competitor analysis section can be the most difficult section to compile when writing a business plan because before you can analyze your competitors, you have to investigate them. Here's how to write the competitor analysis section of the business plan.

First, Find Out Who Your Competitors Are

If you're planning to start a small business that's going to operate locally, chances are you already know which businesses you're going to be competing with. But if not, you can easily find out by doing an internet search for local businesses, looking in the online or printed local phone book, or even driving around the target market area. 

Your local business may also have non-local competitors that you need to be aware of.

If you're selling office supplies, for instance, you may also have to compete with big-box retailers within a driving distance of several hours and companies that offer office supplies online. You want to make sure that you identify all your possible competitors at this stage.

Then Find Out About Them

You need to know:

  • what markets or market segments your competitors serve;
  • what benefits your competitors offer;
  • why customers buy from them;
  • as much as possible about their products and/or services, pricing, and promotion.

Gathering Information for Your Competitor Analysis

A visit is still the most obvious starting point - either to the brick and mortar store or to the company's website. Go there, once or several times, and look around. Watch how customers are treated. Check out the prices.

You can also learn a fair bit about your competitors from talking to their customers and/or clients - if you know who they are. Other good "live" sources of information about competitors include a company's vendors or suppliers and a company's employees. They may or may not be willing to talk to you, but it's worth seeking them out and asking.

And watch for trade shows that your competitors may be attending. Businesses are there to disseminate information about and sell their products or services; attending and visiting their booths can be an excellent way to find out about your competition.

You'll also want to search for the publicly available information about your competitors. Online publications, newspapers, and magazines may all have information about the company you're investigating for your competitive analysis. Press releases may be particularly useful. 

Once you've compiled the information about your competitors, you're ready to analyze it. 

Analyzing the Competition

Just listing a bunch of information about your competition in the competitor analysis section of the business plan misses the point. It's the analysis of the information that's important.

Study the information you've gathered about each of your competitors and ask yourself this question: How are you going to compete with that company?

For many small businesses, the key to competing successfully is to identify a market niche where they can capture a  specific target market  whose needs are not being met.

  • Is there a particular segment of the market that your competition has overlooked?
  • Is there a service that customers or clients want that your competitor does not supply? 

The goal of your competitor analysis is to identify and expand upon your competitive advantage - the benefits that your proposed business can offer the customer or client that your competition can't or won't supply.

Writing the Competitor Analysis Section

When you're writing the business plan, you'll write the competitor analysis section in the form of several paragraphs. 

The first paragraph will outline the competitive environment, telling your readers who your proposed business's competitors are, how much of the market they control and any other relevant details about the competition.

The second and following paragraphs will detail your competitive advantage, explaining why and how your company will be able to compete with these competitors and establish yourself as a successful business.

Remember; you don't have to go into exhaustive detail here, but you do need to persuade the reader of your business plan that you are knowledgeable about the competition and that you have a clear, definitive plan that will enable your new business to successfully compete.

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Business plan tips competitive advantage

Business plan tips: how to identify your competitive advantage

Morgan Beall October 23, 2017

                        Morgan Beall October 23, 2017

At Vancity, we see hundreds of business plans each year from new and aspiring entrepreneurs. And from that experience, we know there are five areas in the business plan that entrepreneurs may not spend enough time on: business objective , SWOT analysis , cash flow projection , competitive advantage and market potential .

In this series, I’m going to share some tips on each of these five areas to get your business plan in top shape. In this post, I’ll cover ways to identify your competitive advantage.

Competitive advantage

What makes your business special? What are you doing differently than your competitors? Why should customers choose your product or service? These are the questions you should ask yourself when determining your competitive advantage. It’s something that often gets overlooked in many business plan s , but understanding your competitive advantage is a huge factor in starting and running a successful business.

https://youtube.com/watch?v=Nid9Frjiz3w

These three steps will help you realize what sets you apart from the rest:

1. Identify your competitors

Start by making a list of your direct and indirect competitors. Not sure who they are? Direct competitors are businesses that satisfy a similar need that you fulfill. Try Google searches and check online business listings in your area. If you are planning on setting up a physical location, walk the community around where your business will be. Even if there don’t appear to be other businesses directly competing with you, there are always other businesses competing for your customer’s time and money. Ask yourself who they are and what products or services are they selling?

2. Find their strengths and weaknesses

Identify what your competitors are doing right. Do a little research to determine what hooks people on their product or service. Next, identify what they’re doing wrong. What’s keeping people from shopping with them? What turns customers off? Make time in your calendar to observe and take notes, or go online and check out website, product and service reviews and see what past customers have had to say.

3. Figure out your “special ingredient”

Lastly, use the information you learned about your competitors to determine your own “special ingredient.” What makes your business stand out? Think about how your values align with your audience, your branding, story, and who you are as a business owner. Consider your customer service, the quality of your products, and where you source your materials from. You may have one very obvious special ingredient, or you may find you have a few special ingredients.

In essence, your competitive advantage is a compelling argument for why a customer should buy your product or service over someone else’s. It’s a vital part of your business plan that helps a financial institution, and your future customers, decide to invest in YOU.

Looking for more support?

Looking for more support to help you complete your business plan? Find out when our next Each One, Grow One small business workshop is happening. The workshop is offered free for members and non-members, and are a great starting place to create your perfect business plan.

Related posts

Business plan tips: how to clarify your business objective, business plan tips: why you need a swot analysis.

  • Business plan tips: how to plan a cash flow projection
  • Business plan tips: how to figure out your market potential

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Home > Business Plan > Competition in a Business Plan

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Competition in a Business Plan

… there is competition in the target market …

Who is the Competition?

By carrying out a competitor analysis a business will be able to identify its own strengths and weaknesses, and produce its own strategy. For example a review of competitor products and prices will enable a business to set a realistic market price for its own products. The competition section of the business plan aims to show who you are competing with, and why the benefits your product provides to customers are better then those of the competition; why customers will choose your product over your competitors.

  • Who are our competitors?
  • What are the competitors main products and services?
  • What threats does the competitor pose to our business?
  • What are the strengths and weaknesses of our competitors?
  • What are the objectives in the market place of the competitors?
  • What strategies are the competitors using?
  • What is the competitors market share?
  • What market segments do the competitors operate in?
  • What do customers think of the competition?
  • What does the trade think of the competitor?
  • What makes their product good?
  • Why do customers buy their product?
  • What problems do customers have with the product?
  • What is the competitors financial strength?
  • What resources do the competition have available?

The focus is on how well the customer benefits and needs are satisfied compared to competitors, and not on how the features of the product compare. For example, key customer benefits might include affordability, can be purchased online, or ease of use, but not a technical feature list.

Competition Presentation in the Business Plan

The business plan competitor section can be presented in a number of formats including a competitor matrix, but an informative way of presenting is using Harvey balls . Harvey balls allow you to grade each customer benefit from zero to four, and to show a comparison of these benefits to your main competitor products. The competitors might be individual identified companies, or a generic competitor such as ‘fast food restaurants’.

In the example below, the key benefits of the product are compared against three main competitors. Each row represents a key benefit to the customer, the first column represents your business, and the remaining three columns each represent a chosen competitor.

The investor will want to understand that your product has the potential to take a major share of the chosen target market by being shown that it is sufficiently competitive for a number of key customer benefits.

This is part of the financial projections and Contents of a Business Plan Guide , a series of posts on what each section of a simple business plan should include. The next post in this series will deal with the competitive advantages the business has in the chosen target market.

About the Author

Chartered accountant Michael Brown is the founder and CEO of Plan Projections. He has worked as an accountant and consultant for more than 25 years and has built financial models for all types of industries. He has been the CFO or controller of both small and medium sized companies and has run small businesses of his own. He has been a manager and an auditor with Deloitte, a big 4 accountancy firm, and holds a degree from Loughborough University.

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To Decide Where to Grow Next, Pinpoint What Makes Your Company Different

what is competitive edge in business plan

Lessons from Costco, Salesforce, Amazon, and Patagonia.

In the ever-changing world of corporate growth, the mastery of ‘strategic clarity’ has become a pivotal element for success. Companies like Costco, Salesforce, Amazon, and Patagonia demonstrate the power of understanding and capitalizing on unique market differentiators. Strategic clarity is more than operational proficiency; it’s about deeply recognizing a company’s distinctive strengths and aligning every operation with this core identity. Costco’s foray into organic foods and Amazon’s expansion into cloud computing with AWS, for instance, were strategic moves rooted in their inherent capabilities and market insights. Patagonia’s commitment to sustainability and ethical practices across all business aspects is the epitome of strategic clarity. Achieving this level of clarity necessitates a disciplined strategy approach, aligning resources, talent, and decisions with the company’s fundamental mission. Such dedication distinguishes a company in a competitive market, driving sustainable growth and fostering customer loyalty. Ultimately, in a competitive landscape, the ability to understand and embody one’s unique value proposition is key to maintaining leadership and achieving long-term success.

As companies set their growth strategies, they could go down many potential paths. Should a company that makes smart fridges expand into industrial cooling? Smart, connected doorbells? Or perhaps consider a “product as a service” model where customers pay a subscription fee for their refrigeration needs rather than owning the fridges outright?

what is competitive edge in business plan

  • Dan McKone is a managing director and partner at L.E.K. Consulting and serves as L.E.K.’s chairman of global innovation, helping to incubate and scale new service lines for the firm’s clients. He is coauthor of Edge Strategy: A New Mindset for Profitable Growth  (HBR Press 2016).

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Sample Property Management Business Plan

Growthink.com Property Management Business Plan Template

Writing a business plan is a crucial step in starting a property management business. Not only does it provide structure and guidance for the future, but it also helps to create funding opportunities and attract potential investors. For aspiring property management business owners, having access to a sample property management business plan can be especially helpful in providing direction and gaining insight into how to draft their own property management business plan.

Download our Ultimate Property Management Business Plan Template

Having a thorough business plan in place is critical for any successful property management venture. It will serve as the foundation for your operations, setting out the goals and objectives that will help guide your decisions and actions. A well-written business plan can give you clarity on realistic financial projections and help you secure financing from lenders or investors. A property management business plan example can be a great resource to draw upon when creating your own plan, making sure that all the key components are included in your document.

The property management business plan sample below will give you an idea of what one should look like. It is not as comprehensive and successful in raising capital for your property management as Growthink’s Ultimate Property Management Business Plan Template , but it can help you write a property management business plan of your own.

Example – AssetGuard Properties

Table of contents, executive summary, company overview, industry analysis, customer analysis, competitive analysis, marketing plan, operations plan, management team, financial plan.

AssetGuard Properties is a forward-thinking property management company based in Tulsa, Oklahoma, dedicated to providing top-tier property management services. Our mission is to simplify the property management process for our clients while enhancing the value and profitability of their real estate assets. We specialize in managing residential properties, offering a comprehensive suite of services designed to meet the unique needs of property owners and tenants alike. Our focus on technology and customer service sets us apart in the industry, ensuring efficient operations and high satisfaction rates among clients and tenants. By leveraging our expertise and innovative approaches, we aim to become a leader in the property management sector in Tulsa and beyond.

Our success is built on a foundation of key factors and accomplishments. Firstly, our in-depth understanding of the Tulsa real estate market allows us to provide tailored advice and services to our clients. The implementation of cutting-edge technology for property management has significantly increased our operational efficiency and customer satisfaction. Additionally, our team’s expertise in marketing and customer service has helped us quickly build a robust portfolio of properties. We have established strong relationships with local vendors and contractors, ensuring cost-effective maintenance and repair services. Our proactive approach to obtaining necessary licenses and certifications has positioned us favorably within regulatory frameworks, setting the stage for a successful launch and sustained growth.

The property management industry is experiencing significant growth, driven by increasing demand for residential rental properties and the complexities of managing these assets. The trend towards professional management services among property owners who seek to maximize profitability while minimizing hassles is a key growth driver. In Tulsa, Oklahoma, this trend is mirrored by a robust real estate market with a growing inventory of rental properties. The industry’s competitive landscape is shaped by both large-scale companies and smaller, localized firms offering property management services. AssetGuard Properties is well-positioned to capitalize on these industry dynamics through our focus on customer service, technology integration, and local market expertise.

Our target customers are property owners and investors in the Tulsa area who own one or more residential rental properties. These clients range from individual property owners to real estate investment groups seeking professional management services to optimize their property’s profitability and minimize operational hassles. Our customer analysis has identified a demand for property management services that provide value through efficient operations, effective tenant management, and strategic marketing to keep occupancy rates high. AssetGuard Properties addresses these needs by offering comprehensive management solutions tailored to the unique requirements of each client, ensuring their investment properties are well-managed and profitable.

Top Competitors: PropertyManagePro, RealEstateGuardians, TulsaPropertyMasters.

Competitive Advantages: AssetGuard Properties distinguishes itself through a strong emphasis on technology and customer service, enabling more efficient property management and higher satisfaction among clients and tenants. Our deep understanding of the Tulsa market and our ability to build strong relationships with local vendors also provide us with an edge in offering cost-effective and quality services.

Our marketing plan focuses on highlighting our comprehensive property management services, competitive pricing, and the value we bring to property owners and investors. We offer a range of services from tenant screening to maintenance, all tailored to meet the diverse needs of our clients, ensuring their properties are well-maintained and profitable. Pricing is structured competitively to offer great value while ensuring our services’ sustainability. Promotional strategies include a strategic marketing campaign leveraging both digital (social media, SEO, targeted online ads) and traditional advertising mediums (local newspapers, property investment seminars) to build brand awareness in Tulsa. By demonstrating our expertise and value proposition, we aim to attract and retain a growing base of satisfied clients.

Our operations plan outlines key processes and milestones critical to our success. This includes obtaining all necessary licenses and certifications, launching our business with a strong marketing campaign, and building a portfolio of managed properties. We will implement efficient property management systems and software for seamless operations, recruit and train a skilled team, and strive to achieve a positive cash flow. Milestones include reaching $15,000/month in revenue and establishing strong local vendor relationships. Regularly reviewing and adjusting our business strategy based on performance and market trends will ensure our sustained growth and success in the property management industry.

Our management team comprises seasoned professionals with extensive experience in property management, real estate, and customer service. This diverse expertise ensures that all aspects of our business, from operational efficiency to client relations, are managed with the highest standards of professionalism and integrity. Our team’s leadership is dedicated to fostering a culture of innovation, accountability, and continuous improvement, driving AssetGuard Properties towards achieving its goals and setting new benchmarks in the property management industry.

Welcome to AssetGuard Properties, a new Property Management company serving customers in Tulsa, OK. As a local business, we’re proud to fill the gap in high-quality property management services within the area. Our commitment to excellence and understanding of the local market sets us apart, ensuring that our clients receive the best possible service.

At AssetGuard Properties, our range of services is designed to meet all your property management needs. This includes Property Marketing and Advertising to ensure your property gets the visibility it deserves, Tenant Screening and Placement to find reliable tenants, Rent Collection and Financial Management to streamline your income, Property Maintenance and Repairs to keep your investment in top condition, and Lease Agreement Management to ensure all legalities are properly handled. Our comprehensive services are tailored to maximize your property’s potential while minimizing your stress.

Our base in Tulsa, OK, positions us perfectly to serve local customers with an understanding and appreciation of the community. This local insight enhances our ability to manage properties effectively and respond promptly to both property owners and tenants’ needs.

AssetGuard Properties stands out as a leader in the property management industry for several reasons. Firstly, our founder brings valuable experience from successfully running a property management business, ensuring that we’re built on a foundation of proven strategies and insights. Secondly, our commitment to offering better services than our competition means that we’re always striving to innovate and improve, ensuring our clients receive unparalleled service.

Since our establishment on January 7, 2024, as a Sole Proprietorship, we’ve made significant strides in building our brand. Our achievements include the creation of a distinctive logo, the development of our company name, and securing a prime location for our operations. These accomplishments mark the beginning of our journey towards becoming the leading property management service in Tulsa, OK.

The Property Management industry in the United States is a thriving sector, with a current market size estimated to be around $88 billion. This industry encompasses a wide range of services, including residential and commercial property management, real estate asset management, and maintenance services.

Market research indicates that the Property Management industry is expected to experience steady growth in the coming years. By 2025, the market size is projected to reach $116 billion, driven by factors such as increasing urbanization, growing demand for rental properties, and the rise of property management technology solutions.

Recent trends in the Property Management industry, such as the adoption of cloud-based property management software, the focus on sustainability and energy efficiency in property management practices, and the increasing demand for professional property management services, bode well for AssetGuard Properties. As a new player in the market serving customers in Tulsa, OK, AssetGuard Properties is well-positioned to capitalize on these trends and establish a strong presence in the industry.

Below is a description of our target customers and their core needs.

Target Customers

AssetGuard Properties will target a diverse range of customers, with a primary focus on local residents in need of property management services. This segment includes homeowners who are seeking to rent out their properties but lack the time or expertise to manage them effectively. These customers will benefit from AssetGuard’s comprehensive management solutions, which are designed to maximize rental income while minimizing the hassle and time commitment for property owners.

The company will also cater to real estate investors who own multiple properties or are looking to expand their portfolios within Tulsa. Recognizing the unique needs of this customer segment, AssetGuard Properties will tailor their services to support investors in optimizing the performance of their rental properties. This includes offering market analysis, tenant placement, and maintenance services, all of which will be crucial for investors aiming to achieve high occupancy rates and return on investment.

Another important customer segment for AssetGuard Properties consists of tenants looking for rental properties. By maintaining a portfolio of well-managed and appealing properties, AssetGuard will attract tenants seeking quality rentals in the Tulsa area. The company will ensure tenant satisfaction through responsive customer service and efficient handling of maintenance requests, therefore building a loyal tenant base that contributes to the stability and profitability of the managed properties.

Customer Needs

AssetGuard Properties caters to the needs of residents who prioritize high-quality property management services. These individuals expect responsive and effective management that can promptly address any issues that arise, ensuring their living experience remains comfortable and hassle-free. This includes everything from regular maintenance to emergency repairs, all handled with professionalism and care.

Moreover, AssetGuard Properties understands the importance of clear communication and transparency between property managers and residents. Customers can expect regular updates regarding any changes or developments concerning their residence. This commitment to open dialogue builds trust and ensures that residents are always informed and involved in the management of their homes.

In addition to the basics, AssetGuard Properties also recognizes the evolving needs of modern residents. This includes the integration of technology in property management, offering digital solutions for payment processing, service requests, and communication. Such conveniences cater to the lifestyle of today’s renters, who expect efficiency and modern amenities in their living environments.

AssetGuard Properties’s competitors include the following companies:

Sunstone Property Management offers comprehensive property management services tailored to both residential and commercial properties. Their services range from tenant screening and leasing to maintenance and financial reporting. Sunstone Property Management operates primarily in the Tulsa, OK area, focusing on high-quality residential units and commercial spaces. The company structures its pricing based on the property type and services required, offering competitive rates that appeal to property owners looking for value and quality. Sunstone is known for its efficient use of technology in property management, which enhances communication with property owners and tenants. However, their specialization in high-end properties may limit their appeal to a broader market segment.

Bates & Assoc Realty specializes in real estate sales and property management services, including marketing properties, tenant placement, rent collection, and property maintenance. They cater to residential properties, with a strong presence in the Tulsa, OK region. Their pricing model is competitive, offering tiered services to meet different property owners’ needs. Bates & Assoc Realty generates significant revenue from both property management fees and real estate transactions, indicating a robust and diverse business model. The company boasts a strong local market knowledge, giving them an edge in property valuation and marketing. Nevertheless, their focus on real estate sales alongside property management could dilute their focus and potentially affect the quality of property management services.

PMI Green Country provides a wide array of property management solutions that include residential, commercial, and association management. Their services encompass all aspects of property management, from tenant screening and leasing to maintenance and beyond. PMI Green Country serves the Tulsa, OK area, and its surroundings, catering to a diverse clientele that includes single-family homes, apartment complexes, and commercial properties. They offer a flexible pricing model that adjusts to the size and complexity of the property being managed, making them accessible to a wide range of property owners. PMI Green Country is part of a larger national franchise, which gives them access to a vast network of resources and expertise in property management. However, being part of a national franchise might limit their ability to customize services to the unique needs of the Tulsa market.

Competitive Advantages

At AssetGuard Properties, we pride ourselves on delivering unparalleled property management services, setting us apart from the competition. Our approach is deeply rooted in understanding the unique needs of each property owner and tenant, allowing us to tailor our services for optimal satisfaction. We leverage the latest technology to streamline operations, from maintenance requests to rent collection, ensuring efficiency and convenience for all parties involved. This commitment to excellence and innovation in service delivery not only enhances the value of the properties we manage but also fosters a sense of trust and reliability among our clients.

Furthermore, our team comprises seasoned professionals with extensive knowledge and experience in the real estate and property management industry. This expertise enables us to offer insightful advice and strategic solutions that maximize returns and minimize risks for property owners. Additionally, our strong local presence in Tulsa, OK, equips us with an in-depth understanding of the market dynamics, allowing us to position properties advantageously. By choosing AssetGuard Properties, clients can expect a partnership that not only elevates their property management experience but also contributes significantly to their investment’s success. Our dedication to excellence, combined with our competitive edge in service quality and market intelligence, makes us the preferred choice for property management needs.

Our marketing plan, included below, details our products/services, pricing and promotions plan.

Products and Services

At AssetGuard Properties, we understand the value of your real estate investment and the importance of maintaining its integrity and profitability. We offer a comprehensive suite of property management services designed to alleviate the burden from property owners, ensuring their assets are well-managed and lucrative. Our services cater to all aspects of property management, from marketing and tenant placement to maintenance and financial oversight.

Our Property Marketing and Advertising service ensures your property doesn’t stay vacant for long. We employ a blend of traditional and digital marketing strategies to attract a wide pool of potential tenants. By showcasing your property in its best light, we aim to secure reliable tenants swiftly. This service is priced at an average of $250, which includes listing your property on top real estate websites, social media platforms, and conducting open houses.

Tenant Screening and Placement is another critical service we offer. Finding the right tenant is paramount to a stress-free property management experience. Our comprehensive screening process includes background checks, credit checks, employment verification, and previous landlord references. This rigorous process ensures that only the most qualified tenants occupy your property. For this invaluable peace of mind, our clients can expect to invest around $100 per tenant screening.

Rent Collection and Financial Management are essential to maintaining the cash flow of your investment. We provide a streamlined process for tenants to pay their rent, reducing late payments and ensuring consistent revenue. Additionally, we offer detailed financial reporting for property owners, including income statements and expense reports. This service is available for an average fee of 8-10% of the monthly rent collected, ensuring that your financial interests are expertly managed.

Property Maintenance and Repairs are inevitable in property management. Our goal is to preserve the value of your property through regular maintenance and prompt, efficient repair work when necessary. We have established relationships with trusted contractors and service providers to ensure quality work at competitive prices. The cost for this service varies depending on the nature of the maintenance or repair but expect to pay a management fee of 10-15% on top of the actual repair costs.

Lastly, Lease Agreement Management is vital to ensure that the terms of the lease are upheld by both parties. We handle everything from lease drafting to enforcement, including renewals and terminations. Our expertise in local real estate laws ensures that your lease agreements are comprehensive and compliant. This service is offered at a flat rate of $200 per lease agreement, providing peace of mind that all legal and procedural bases are covered.

At AssetGuard Properties, we pride ourselves on being a full-service property management solution that meets the diverse needs of property owners in Tulsa, OK. Our competitive pricing, combined with our commitment to excellence, makes us the ideal partner for your property management needs.

Promotions Plan

AssetGuard Properties harnesses the power of online marketing to attract customers, utilizing a multifaceted approach to ensure visibility and engagement. The company will deploy a robust digital marketing strategy, incorporating search engine optimization (SEO) to improve their website’s ranking on search engine results pages. This ensures that when potential customers in Tulsa, OK, search for property management services, AssetGuard Properties appears prominently.

Social media platforms will also play a crucial role in their promotional efforts. AssetGuard Properties will create and maintain active profiles on major social networks, including Facebook, Instagram, and LinkedIn. Through these channels, the company will share valuable content, property listings, and customer testimonials to build a community and engage directly with potential clients. Paid advertising campaigns on these platforms will target specific demographics, ensuring that promotional materials reach those most likely to require property management services.

Email marketing campaigns will further bolster AssetGuard Properties’ promotional activities. By gathering email addresses through their website and social media channels, the company will send out newsletters, special offers, and updates about new listings or services. This direct line of communication will keep the company top-of-mind for current and potential clients.

Beyond digital efforts, AssetGuard Properties will engage in local community events and sponsorships. Participation in local fairs, property expos, and community gatherings will increase brand visibility and allow for face-to-face interaction with potential customers. Sponsorship of local sports teams or events can also enhance their reputation as a community-oriented business.

Referral programs will incentivize existing clients to refer friends and family, creating a word-of-mouth marketing channel that can be highly effective in building trust and expanding the customer base. Offering discounts or other benefits for successful referrals will motivate current clients to share their positive experiences with others.

In summary, AssetGuard Properties will employ a comprehensive promotional strategy that combines online marketing with community engagement and referral programs. By leveraging the power of SEO, social media, email marketing, local events, and referral incentives, AssetGuard Properties aims to attract and retain customers in Tulsa, OK, establishing itself as a leading property management service in the area.

Our Operations Plan details:

  • The key day-to-day processes that our business performs to serve our customers
  • The key business milestones that our company expects to accomplish as we grow

Key Operational Processes

To ensure the success of AssetGuard Properties, there are several key day-to-day operational processes that we will perform.

  • Maintain open and effective communication channels with property owners and tenants to address any concerns, requests, or feedback in a timely manner.
  • Conduct regular inspections of managed properties to ensure they are in good condition and comply with local housing standards and regulations.
  • Coordinate maintenance and repair work by hiring and overseeing reliable contractors, ensuring that work is completed satisfactorily and within budget.
  • Manage financial operations, including rent collection, payment of bills and taxes, and generating monthly financial reports for property owners.
  • Advertise and market vacant properties through various channels to minimize vacancy periods and attract suitable tenants.
  • Screen potential tenants by conducting background and credit checks to ensure they meet the rental criteria.
  • Handle lease agreements, renewals, and terminations, ensuring all documentation is accurate and legally compliant.
  • Provide exceptional customer service to both property owners and tenants to build and maintain positive relationships.
  • Stay informed about local real estate market trends and property laws to offer knowledgeable advice and services to clients.
  • Implement efficient property management software to streamline operations, from tenant screening to maintenance requests and financial reporting.

AssetGuard Properties expects to complete the following milestones in the coming months in order to ensure its success:

  • Obtain Necessary Licenses and Certifications : Secure all required local, state, and federal licenses for operating a property management business in Tulsa, OK. This includes any specific property management or real estate broker licenses that may be required by Oklahoma law.
  • Launch Our Property Management Business : Officially launch AssetGuard Properties with a strategic marketing campaign to build awareness in the Tulsa area. This includes developing a strong brand identity, creating an engaging website, and utilizing social media and local advertising to reach potential clients.
  • Build a Robust Property Portfolio : Acquire a portfolio of properties to manage that will generate consistent revenue. This involves networking with property owners, real estate agents, and investors to showcase the value AssetGuard Properties can bring to their investments.
  • Implement Efficient Operational Systems : Develop and implement efficient property management systems and software that will allow for effective management of properties, including tenant screening, lease management, maintenance requests, and financial reporting. This will ensure high customer satisfaction and operational efficiency.
  • Hire and Train Qualified Staff : Recruit and train a team of professionals with expertise in property management, customer service, and maintenance. This ensures that all properties are managed effectively and that tenants and property owners receive high-quality service.
  • Achieve a Positive Cash Flow : Focus on reaching operational efficiency and financial stability by achieving a positive cash flow. This involves managing expenses carefully while growing the revenue base by increasing the number of managed properties and possibly adjusting the fee structure to remain competitive yet profitable.
  • Get to $15,000/Month in Revenue : Implement strategies to grow monthly revenue to at least $15,000. This could involve expanding the property portfolio, optimizing the fee structure for services provided, and seeking additional revenue streams related to property management such as maintenance and renovation services.
  • Establish Strong Relationships with Local Vendors and Contractors : Build a network of reliable and cost-effective local vendors and contractors for maintenance and repair services. This will help in managing operational costs effectively and ensuring quick and quality service to the managed properties.
  • Implement a Customer Feedback Loop : Develop a system for collecting and analyzing feedback from both property owners and tenants. Use this feedback to continually improve service offerings and customer satisfaction, which in turn will help in retaining clients and attracting new ones through positive word-of-mouth.
  • Review and Adjust Business Strategy : Regularly review the business performance against set goals and industry trends. Be prepared to adjust the business strategy, marketing efforts, and operational processes based on performance data, customer feedback, and changing market conditions to ensure sustained growth and success.

AssetGuard Properties management team, which includes the following members, has the experience and expertise to successfully execute on our business plan:

Kaylee Richardson, CEO

Kaylee Richardson, CEO, brings a wealth of experience to AssetGuard Properties, underpinned by a proven track record in the property management sector. With an entrepreneurial spirit, Kaylee has previously demonstrated her capability by successfully running a property management business. Her expertise not only lies in managing and scaling businesses effectively but also in understanding the intricacies of the real estate market and customer needs. Kaylee’s leadership is expected to drive AssetGuard Properties towards achieving its vision by leveraging her strategic thinking, operational excellence, and commitment to service quality.

To reach our growth goals, AssetGuard Properties requires initial funding to cover startup costs, operational expenses, and marketing initiatives. This investment will enable us to quickly establish our brand, build a strong property portfolio, and achieve operational efficiency. Our financial projections indicate that with the right level of funding, we can reach our revenue targets, achieve a positive cash flow within the first year of operations, and sustain long-term growth. Our plan outlines a clear path to profitability, ensuring a solid return on investment for our financial backers.

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FACT SHEET: President   Biden Announces New Actions to Lower Costs for Americans by Fighting Corporate   Rip-Offs

Launch of Strike Force on Unfair and Illegal Pricing; New Actions to Slash Credit Card Late Fees, Combat High Internet Costs, and Support Small Farmers; And New Report Showing That Administration Efforts to Eliminate Junk Fees Will Save Over $20 Billion Annually

President Biden is laser focused on lowering costs for hardworking Americans by taking action to end corporate rip-offs and other unfair practices that keep prices high. Under the President’s leadership, agencies across the Administration are working to promote competition, protect consumers, and lower prices by implementing the President’s Executive Order on Promoting Competition in the American Economy . Today, President Biden will launch a new Strike Force to crack down on unfair and illegal pricing. President Biden is committed to making sure corporations are held accountable when they try to rip off Americans, including when they break the law while keeping prices high. To that end, the President is establishing a new Strike Force on Unfair and Illegal Pricing co-chaired by the Department of Justice (DOJ) and the Federal Trade Commission (FTC). This Strike Force will strengthen interagency efforts to root out and stop illegal corporate behavior that hikes prices on American families through anti-competitive, unfair, deceptive, or fraudulent business practices. DOJ and FTC, along with other agencies on the Strike Force, will focus their collaborative efforts on key sectors where corporations may be violating the law and keeping prices high, including prescription drugs and health care, food and grocery, housing, financial services, and more. At its sixth meeting, President Biden’s Competition Council will announce three new actions to promote competition and lower costs and release a new report showing that the Administration’s work to eliminate junk fees will save Americans more than $20 billion each year:

  • Ending excessive credit card late fees . Today, The Consumer Financial Protection Bureau (CFPB) finalized a rule to slash credit card late fees from the current average of $32 down to $8, saving consumers $10 billion a year, or an average savings of $220 per year for the more than 45 million people who are charged these late fees annually. For too long, surprise and hidden late fees have burdened consumers. By closing the loophole that has allowed companies to charge these excessive late fees, today’s action will not only save consumers billions of dollars but promote fair and competitive markets. It builds off of steps the CFPB has already taken to crack down on junk fees in the banking sector, including fees for basic customer services and moving to curb overdraft fees and bounced check fees. In addition, the CFPB has found that credit card interest rate margins have climbed to an all-time high and big banks are charging more in interest than smaller banks.
  • Saving consumers more than $20 billion in junk fees. A new blog published today by the Council of Economic Advisers (CEA) finds that actions from the Biden-Harris Administration will help eliminate more than $20 billion in junk fees annually going forward. Analysis of a number of major sectors across the economy show that consumers pay $90 billion in junk fees every year, including on live event tickets, internet and cable fees, apartment rentals, banking fees, auto dealer fees, and more. The CEA analysis cites extensive literature that indicates fees dripped in throughout the purchasing process after the consumer has already made decisions about what to buy make it difficult to comparison shop, disadvantage businesses that don’t want to employ junk fees, and lead to consumers paying more.
  • Cracking down on bulk billing junk fees to lower costs and promote competition. The Federal Communications Commission (FCC) is circulating a proposed rule that would lower costs and increase choice for consumers by banning “bulk billing” arrangements, a practice by which landlords or providers charge everyone living or working in a building for a particular internet, cable, or satellite service, even if they don’t want it or haven’t opted in. These arrangements limit consumer choice by preventing tenants from choosing the services at the price point and level that are best for their needs, and can impose fees for unnecessary services and deter competition. In addition, the proposed rule seeks to address other exclusive arrangements between service providers and landlords that impede competition and drive-up prices, such as exclusive wiring arrangements, exclusive marketing arrangements, and certain revenue sharing agreements.
  • Promoting competitive agricultural markets and ensuring fairness for farmers and ranchers. Fair competition is key to making sure America’s food markets operate effectively and producers and consumers have robust choices and opportunity. Today, the Department of Agriculture (USDA) finalized a rule to protect the farmers and ranchers who produce meat and poultry by cracking down on processing companies’ deceptive contracts, banning retaliatory practices that prevent small producers from raising concerns or coming together in associations, and protecting certain producers from discrimination. USDA’s work across the agricultural supply chain helps support more competition, which can lower food prices.

Today’s announcements build on far-reaching work the Competition Council has undertaken during the seven months since its last meeting, including:

  • Cracking down on junk fees that cost consumers $90 billion each year. The FTC has proposed a rule that, if finalized as proposed, would ban companies from charging hidden and surprise junk fees and require that prices are listed upfront when consumers make purchases. In addition, the FTC finalized a rule to ban auto dealers from using bait-and-switch tactics to deceive consumers and to stop auto dealers from charging hidden junk fees for services that provide no additional value. The Department of Labor also proposed a rule that would reduce junk fees in retirement products and help ensure that the financial advice that Americans get about their retirement is in their best interest. Finally, the FCC proposed a rule to ban early termination fees for cable and satellite operators, and later this month will vote to finalize a rule to mandate all-in pricing for cable and satellite services.
  • Prohibiting financial product comparison shopping tools from steering consumers to products based on kickbacks. The CFPB issued a circular stating that companies that provide consumers with comparison shopping tools—say for a credit card, loan, or bank account—are prohibited from steering consumers to products or lenders because they are receiving a kickback. Individuals often use these sites thinking they are receiving unbiased comparisons; manipulated results makes it difficult for consumers to honestly evaluate products, and may result in choosing a less advantageous product.
  • Promoting competition in food and grocery markets. USDA continues to support new entrants in food markets, protect farmers and ranchers, and lower prices for consumers. This includes supporting domestic fertilizer production with over $50 million in grants awarded in October as part of up to $900 million in funding for the program. USDA also finalized a rule to improve poultry markets by making sure poultry growers receive the information they need about costs and payments from the large corporations they work with.
  • Making health care markets more affordable and competitive. In December, the Department of Commerce released a proposed framework providing guidance that agencies can consider price as a factor when determining whether to exercise march-in rights for federally funded inventions connected to prescription drugs. In addition, HHS rejected more than 1,000 Medicare Advantage TV marketing ads in one year that were misleading to consumers and proposed a rule that if finalized will prohibit insurance companies from paying brokers to steer patients towards certain plans based on compensation, rather than options that meet best patient health needs. Additionally, HHS proposed to protect Medicare consumers from third parties selling their information without their consent. HHS also took historic steps to break up the Organ Procurement and Transplantation Network vendor monopoly. Finally, FTC and HHS launched a probe into anti-competitive behavior by group purchasing organizations (GPOs) and drug wholesalers that may contribute to generic drug shortages and HHS is seeking input on how the agency can increase transparency and promote competition in Medicare Advantage markets.
  • Improving transportation systems. The Surface Transportation Board has proposed a new reciprocal switching rule to improve efficiency and increase competition for moving goods across the country, by creating an opportunity for competitors to share the tracks with railroads that fail to provide reliable service. The Federal Maritime Commission is also implementing the bipartisan Ocean Shipping Reform Act signed by President Biden, including issuing a final rule that provides new clarity and timelines on when shippers like farmers and retailers can be billed by ocean carriers. Finally, the Department of Transportation levied a record $140 million penalty on Southwest Airlines for their 2022 holiday meltdown—$90 million of the penalty will go towards compensating future Southwest passengers affected by cancellations or significant delays caused by the airline.
  • Institutionalizing competition. The FTC and DOJ recently finalized updated merger guidelines to reflect the realities of the modern economy and help promote fair, open, and competitive markets as the two agencies review mergers that come before them. Further, the Office of Information and Regulatory Affairs released new guidance to ensure that competition continues to be at the center of future federal rulemaking.
  • Lowering costs and improving access in the communications sector. The FCC is working to restore net neutrality, which will prohibit Internet Service Providers from blocking legal content, throttling speeds, and creating fast lanes that favor those who can pay for access. The FCC also adopted rules that prohibit digital discrimination in high-speed Internet access based on income, race, ethnicity, religion, and national origin, which will protect civil rights, lower costs, and increase internet access for Americans across the country.

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BT MindRush 2024: Multi-sector panel underscores Indian economy’s bright spots and competitive edge

The diverse panel comprising tata elxsi’s manoj raghavan, apar industries’ kushal n. desai, deepak fertilisers & petrochemicals’ sailesh c. mehta and lemon tree hotels’ patanjali g. keswani, underlined the nation's potential for growth and innovation.

  • Updated Mar 09, 2024, 7:50 PM IST

Manoj Raghavan, CEO & MD, Tata Elxsi, said the primary focus of their customers in R&D is on EV technology.

A diverse panel spanning tech and software design, fertilisers, cable manufacturing and hospitality industries was bullish about the Indian economy’s many bright spots which were proving to be opportunities for their respective businesses, underlining the nation's potential for growth and innovation, at Business Today’s MindRush 2024 event in Mumbai on Saturday.

In a session entitled ‘India Inc’s Competitive Edge: How Resilience Fuels Growth’, Patanjali G. Keswani, CMD, Lemon Tree Hotels, kicked off the discussion by saying that India is at a different point in its history where various discretionary items have become non-discretionary for a large part of the population. Pointing to the surge in air travel as an example, he said: “Three-quarters of discretionary items in India for hundreds of millions of Indians will become routine. When that happens, it's balle balle for most of the discretionary items. In every consumer discretionary category in India, you are going to have an insane amount of demand. That is what I am betting on.”

Manoj Raghavan, CEO & MD, Tata Elxsi, said the primary focus of their customers in R&D is on EV technology.  The company makes about 50% of its revenues from the automotive industry. Whether the US, Europe or even in India, a significant portion of R&D is diverted to electric vehicles, but he added that last three months’ data indicates that a lot of people are not happy with the overall evolution of the EV market. “The range anxiety is real in other countries, unlike on Indian roads where you can never drive 400 kms a day. You drive maybe 50 -100 km a day to office and back. So, there are a lot of challenges even in developed world for EVs to really pick up,” he pointed out.

Speaking about the government involvement in the fertiliser industry, Sailesh C. Mehta, CMD, Deepak Fertilisers & Petrochemicals Corporation, said agriculture productivity would not have gone up without the government’s policy imperative to subsidise fertilisers for farmers. “But today, the industry has matured very well and it needs to be freed up. It needs to be treated like a normal market-driven industry.”

He highlighted that the industry is pushing for direct benefit transfer to farmers rather than through the conduit of the fertiliser industry. “If that policy shift happens, we will see a lot of innovation and transformation in the whole approach to agriculture which has stratified today. What was good earlier, we now need to grow out of.”

Amid the government’s commentary that the private sector needs to increase its capex spends to boost investments in the country, Kushal N. Desai, CMD, APAR Industries, said they noticed a definite capex increase among private players in the country. The company manufactures cables used in various industries. “The amount of solar and wind energy being put in, most of it is coming through private investments. The government is just playing the role of a regulator. That itself is a capital expansion boost.” He further added that talks with customers revealed that capacity utilisations have increased to the tune of 80-90%. “A lot of capex is coming up. That cycle is definitely on,” he said.

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The ai main event: redefining b2b business models.

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Stephen S. Hau is the Chairman and CEO of Newfire Global Partners .

As Michael Stipe, the frontman of R.E.M., famously sang, “It's the end of the world as we know it (and I feel fine).” This refrain, oddly enough, mirrors my sentiments about the much-discussed yet often misunderstood disruptive potential of artificial intelligence (AI) in the business world.

Much ink has been spilled over AI and its transformative effects across industries. But from my perspective as an entrepreneur deeply entrenched in the world of global product development, the narrative has often missed the mark. Sure, ChatGPT has made it crystal clear that the future of customer service call centers likely lies in advanced chatbots (with an AI voiceover), promising greater efficiency and lower costs, but that's just the appetizer in this AI feast.

The main course? I believe this will be new business models enabled by drastically reduced software development costs. In the coming years, I anticipate a wave of new entrants in established markets armed with leaner cost structures courtesy of global software development teams augmented by AI automation. These upstarts aren't just going to compete on price; they're poised to transform the industry landscape by introducing innovative business models and pricing strategies recently made possible by much lower internal costs.

How Lean Entrants Can Disrupt Established Giants

In the CRM industry, picture a newcomer challenging Salesforce with a fee structure tied to customer success, unlike Salesforce's per-user model. This innovative approach links fees to client KPIs such as revenue growth or customer retention, fostering a partnership focused on mutual growth.

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By operating with a lean cost structure, this newcomer disrupts traditional pricing, setting new competitive standards. Their analytics-driven model continuously adjusts, posing a challenge for older companies. To keep up, I believe these firms must restructure fundamentally as there can often be considerable risks associated with ignoring technological changes such as today's AI-driven shift.

This underscores the emerging competitive frontiers. To thrive, newcomers and incumbents alike must not only innovate but also strategically manage and service their technological assets, seizing opportunities for substantial cost efficiencies. The initial move involves pinpointing cost centers. Following that, the focus shifts to investigating both current and impending opportunities for cost reduction, setting the stage for a more streamlined, efficient operation.

Adapting Quickly To Thrive In Market Dynamics

From my own experience leading a global product development company that leverages AI automation, I've seen firsthand how AI can optimize product development and lower costs. Again, this isn't just theoretical musing; it's a reality that's reshaping how companies approach their business models.

Furthermore, the advent of AI in business is leading to a significant shift in how emerging technology companies operate. In my conversations with business leaders, technologists and investors, a common theme emerges: The dynamic market is rapidly evolving, and those who adapt quickly have a better chance of thriving.

The integration of AI in business models is not just about automating processes or cutting costs; it's about reimagining how business is done. As we stand at this crossroads where AI's potential to redefine business models is becoming increasingly evident, more leaders are realizing the importance of embracing this change. The question is no longer about whether AI will impact your business, but how innovatively you can leverage it to transform your business model.

When Your Special Sauce Is No Longer Special

In the rapidly evolving tech landscape, what once gave companies a competitive edge can quickly become their Achilles' heel. This is particularly true for organizations that have heavily invested in proprietary systems, believing these to be their "special sauce." However, these systems often evolve into costly legacies that burden the company with high internal costs, making them less competitive against more agile newcomers.

In my experience, I've witnessed data companies cling to their custom-built data pipelines and analytics engines, pouring significant resources into their maintenance and operation. While these proprietary systems were once a source of pride and differentiation, I've found they have increasingly become liabilities in the face of licensing options that are not only cost-effective but also superior in performance, such as Apache Spark.

For instance, a data analytics firm I worked with continued to invest heavily in its in-house data processing engine, a system that was once groundbreaking but had become outdated. The firm's leadership was initially resistant to change, citing the unique capabilities of its proprietary technology. However, the reality was that the engine required an expensive, dedicated team for its operation.

The turning point came when a startup competitor, leveraging Apache Spark without the burden of legacy costs, entered the market. This competitor was able to offer similar data analytics services at a fraction of the cost, posing a significant threat to the established business model.

Steps You Can Take Now

To stay competitive in the fast-evolving tech landscape, companies should:

1. Conduct a quick tech audit. Catalog all tech assets to distinguish between essential tools and outdated ones, eliminating unnecessary costs and focusing on technologies that advance strategic goals.

2. Assess strategic fit. Evaluate each technology's alignment with long-term goals, identifying outdated or non-unique proprietary systems that inflate maintenance costs.

3. Implement continuous tech evaluation. Use a framework for ongoing assessment of new technologies against business objectives, spotting opportunities to adopt scalable, cost-effective solutions like open-source technologies.

4. Utilize external expertise. Partner with specialists to reduce development costs, gaining access to the latest tech without heavy investment for a leaner operation.

This streamlined approach helps enable companies to adapt to market changes efficiently, ensuring technological investments are both strategic and sustainable.

In Conclusion

As we delve deeper into the era of AI, businesses (especially in the B2B sector) need to look beyond the horizon of simple cost reduction. I believe the real opportunity lies in rethinking business models, making strategic partnerships and staying agile in a rapidly changing market landscape.

It's not the end of the business world as we know it; it's the beginning of a new, more dynamic and innovative era. And I feel more than fine about it—I’m downright excited!

Stephen Hau

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  1. What Is Competitive Advantage and How to Find Your Strategic Edge

    Your competitive strategy is the plan you make to take advantage of or develop your competitive advantage. This type of insight can help you set goals and direction for the future, such as developing new products or services that strengthen your competitive advantage. The type of competitive strategy you need to develop depends on the value you ...

  2. Competitive Advantage Definition With Types and Examples

    Competitive advantages are conditions that allow a company or country to produce a good or service at a lower price or in a more desirable fashion for customers. These conditions allow the ...

  3. How to Write and conduct a Competitive Analysis

    Here are the steps you need to take: 1. Identify your competitors. The first step in conducting a comprehensive competitive analysis is to identify your competitors. Start by creating a list of both direct and indirect competitors within your industry or market segment. Direct competitors offer similar products or services, while indirect ...

  4. Market research and competitive analysis

    Use competitive analysis to find a market advantage. Competitive analysis helps you learn from businesses competing for your potential customers. This is key to defining a competitive edge that creates sustainable revenue. Your competitive analysis should identify your competition by product line or service and market segment.

  5. How to Write a Competitive Edge for Business

    Writing. A discussion of your competitive edge can be part of the section of your business plan that deals with the description of your company, or it can be the introduction to your marketing ...

  6. What is Competitive Advantage?

    Key Highlights. A competitive advantage is what sets a company apart from its competitors, in the eyes of its consumers. These advantages allow a company to achieve and maintain superior margins, a better growth profile, or greater loyalty among current customers. A competitive advantage is often referred to as a "protective moat.".

  7. What is a Competitive Advantage? Explained with Examples

    1. Brand. Strong Branding is one of the strongest sustainable competitive advantages. A lot goes into making a brand like building customer relationships, quality service/product, time, and money. But when the company is identified as a brand in the market, it brings you a positional advantage. And at the same time, your sales become easier and ...

  8. Conduct a Competitive Analysis (With Examples) [2024] • Asana

    You decide to conduct a market analysis for your business. To do so, you would: Step 1: Use Google to compile a list of your competitors. Steps 2, 3, and 4: Use your competitors' websites, as well as SEO analysis tools like Ahrefs, to deep-dive into the service offerings and marketing strategies of each company.

  9. How to Write a Great Business Plan: Competitive Analysis

    The Competitive Analysis section of your business plan is devoted to analyzing your competition--both your current competition and potential competitors who might enter your market.

  10. Competitive Advantage in a Business Plan

    The business plan competitive advantage section is best presented in a two column format. In the example below, the first column shows the advantage, and the second column gives a brief comment about the advantage. ... An investor will look to see if there is a sustained competitive edge, capable of further development, which will allow the ...

  11. How to Identify Your Competitive Strengths for Your Business Plan

    Your competitive edge may lie in any of the your company's key distincitions, including cost, features, service, quality, distribution and so forth. Or it could be something totally different. The ...

  12. 10 Proven Strategies to Gain a Competitive Edge for Your Business in 2021

    Ask your customers for feedback and the ways you can improve your offer. Then, identify and implement the processes to improve your business. This will also make your customers feel wanted and help in making quick and efficient changes in the business. 6. Turn customers into evangelists.

  13. Competitive edge

    Study your competitors and learn how they target a market problem. Ensure that the problem is an important one, and that your solution is better. Then reposition this market problem with your own unique solution. You can capitalize on your competitors' marketing, but make sure to position your product as the"next generation.".

  14. How to Write a Competitor Analysis for a Business Plan (with AI in 2023)

    Competitor analysis is a critical component of any business plan. It helps you understand the landscape of your industry, identify opportunities for growth and differentiation, and craft strategies that take advantage of your competitors' weaknesses. ... AI provides a competitive edge by monitoring and reporting real-time updates on competitor ...

  15. How to Write Competitive Analysis in a Business Plan (w/ Examples)

    Perform a SWOT Analysis of your competitors. 1. Identify Your Direct and Indirect Competitors. First things first — identify all your business competitors and list them. You can make the final list later, but right now jot down all the competitors including new competitors.

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    2. Attract the Best Talent in the Market. Your business can only flourish if you have the best people working for your brand. It stands to reason that to have a competitive edge in any business ...

  17. Competitive Strategy: Definition, Types, and Execution

    A competitive strategy is simply a company's long-term action plan of how to gain an edge over its rivals. The management weighs a firm's strengths, weaknesses, and unique features against those of its competitors to draft a winning course of action. In a way, this is an instrument for outperforming competitors.

  18. Writing a Business Plan: Competitor Analysis Section

    Writing the Competitor Analysis Section. When you're writing the business plan, you'll write the competitor analysis section in the form of several paragraphs. The first paragraph will outline the competitive environment, telling your readers who your proposed business's competitors are, how much of the market they control and any other ...

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    Here are some tips to help build a comprehensive cash flow projection: 1. Lay out your first 24 months. Most financial institutions are looking for a two-year plan. Here is an example of a cash flow template to detail a 24-month cash flow, with annual and monthly totals (if you prefer a spreadsheet that also works).

  20. 12 Competitive Advantage Examples (Plus Definition)

    The organization also experiences higher customer satisfaction ratings, which also contributed to higher sales performance. 9. Quality. Quality contributes to customer satisfaction and an organization's reputation, which both factor into a company's competitive advantage. Quality control programs, maintenance, technology and customer feedback ...

  21. What Is Competitive Advantage, and Why Is It Important?

    Having a competitive advantage over your competition is essential to business success because: It can contribute to higher profit margins. It may help attract more customers more frequently. It helps maintain brand loyalty. It can add predictability and constancy to your company's revenue streams. It may help attract more brand alliances ...

  22. Competition in a Business Plan

    The competition section of the business plan aims to show who you are competing with, and why the benefits your product provides to customers are better then those of the competition; why customers will choose your product over your competitors. Competition analysis should include answers to the following questions:

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    In the ever-changing world of corporate growth, the mastery of 'strategic clarity' has become a pivotal element for success. Companies like Costco, Salesforce, Amazon, and Patagonia ...

  24. What is competitive edge in a business plan

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  25. Mergers And Acquisitions: Tips And Outlook For 2024

    2. Tech Integration For Competitive Edge. Technology is playing an increasingly pivotal role in M&A. Artificial intelligence (AI) is the talk of most financial pundits today.

  26. Sample Property Management Business Plan

    The property management business plan sample below will give you an idea of what one should look like. It is not as comprehensive and successful in raising capital for your property management as Growthink's Ultimate Property Management Business Plan Template, but it can help you write a property management business plan of your own. Example ...

  27. How Trump, suddenly strapped for cash, could raise more than half a

    Donald Trump is facing a cash crunch as deadlines are quickly approaching to find over half a billion dollars he owes in judgments.

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    Promoting competitive agricultural markets and ensuring fairness for farmers and ranchers. Fair competition is key to making sure America's food markets operate effectively and producers and ...

  29. BT MindRush 2024: Multi-sector panel underscores ...

    In a session entitled 'India Inc's Competitive Edge: How Resilience Fuels Growth', Patanjali G. Keswani, CMD, Lemon Tree Hotels, kicked off the discussion by saying that India is at a ...

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    The main course? I believe this will be new business models enabled by drastically reduced software development costs. In the coming years, I anticipate a wave of new entrants in established ...