All businesses have competition, no matter what type of business you are in
Competition comes in all forms, from many different industries and from substitute products.
We have all heard the saying that to be successful you have to be better than the competition. However, what if there is no competition? If you believe that there is no competition for your products, then either there is no market for your product, or you are fooling yourself.
Michigan State University Exentsion feels that all business ventures, no matter what size or industry will face competition. It is important to recognize who you are competing with and develop a strategy for staying ahead of the game. The following is an example of why recognizing who your competition is can be a vital part of managing a successful business. A woman just opened up a Mexican-style family restaurant. She chose to open her business in a particular town that did not seem to have any other competing Mexican restaurants. She failed to recognize that in fact, there was competition in this area and the competition was fierce.
Although there were no other Mexican restaurants in the town, there were many locally-owned restaurants that would still serve as competition to her business. Three of the restaurants were “theme” restaurants with bar/wine services and full menus. In addition, there were six bar and grill type restaurants, three sports bars with grills and full menus, three pizza parlors, five fast food restaurants, two coffee shops, one seasonal food stand and one casino with two attaching restaurants.
There were entertainment outlets as well. As a Mexican style family restaurant, competitors also come in the form of substitute products. There was a bowling alley, a movie theater, a waterfront with grills, a fast food outlet with a jungle gym feature, shopping malls, a mini golf course, a sports park, a dirt automobile race track and a whole host of family-friendly businesses that are vying for the same wallet.
The issue with this client was that she believed that she only competed with other Mexican-style family restaurants. In reality, her competition came from all of the outlets where families go and spend time and money. Competition can come from anywhere, and it is important to keep this in mind before starting a business.