One of the earliest activities involved with bringing any new effort to market is a competitive analysis. Here is a shortcut to crafting a compelling and useful competitive analysis enviornment for your new product based business.
Direct competitors are other businesses in the marketplace that:
For example if you are a Men’s Resort wear brand. You may have direct competitors that have the same customer, also serve the resort market, and have a near identical product line up. The purpose of having direct competitors is to validate demand and positioning in the marketplace. Choosing your direct competitors is less about seeing what they are doing from a product standpoint and more about gaining clarity about where you sit in the market place.
Indirect Competiors are other businesses in the marketplace that accomplish 2 of the below:
An example of an indirect customer for our Mens resort wear brand would be a business that has a similar customer and problem, but not the same solution because they only offer mens Swimtrunks. The purpose of having indirect competitors in your competition landscape is to use these brands as research weigh-points. Is there something your indirect competitors do to improve their customer service that you can adopt? Indirect competitors are great brands to observe because neither business is directly competing for the same dollar spend.
You’ll really stand out with investors if you can clearly identify a meaningful aspiratational brand that you compete with. For example, if you are in the atleisure space you may list Lululemon as your aspirational brand. The purpose of the aspirational brand being a part of your competitive landscape is that it keeps your development and business model flexible and research heavy. When you have an outlier brand you will consistently have a benchmark of success to guide your early stage start up days.
This method of Two (direct), Two (indirect) and One (Aspirational, or the 2:2:1 Selection is a proprietary market research strategy brough to you by The Product Place. Send us a DM with your 2:2:1 for your new brand – we’d love to take a look!