Direct Vs Indirect: Evaluating Your Competition

Published by BMT Micro on

Evaluating the market that you are in is essential for company growth. Part of this includes doing competitor research to assess how you are doing, and where you stand in relation to others in your market. Analyzing competitors can also help you adapt to better meet customer needs. While most people think of their direct competition when looking into their competitors, indirect competitors are also important.

Direct Vs Indirect Competitors:

Direct competitors are other companies that sell the same services or products as you, for the same client needs within the same market. Every market, no matter how small, will have direct competitors which helps prevent monopolies and increase customer satisfaction.

Examples of direct competitors are everywhere. Some well-known ones are McDonald’s and Burger King, Popeye’s and Chick-Fil-A, Domino’s Pizza and Papa Johns Pizza, Target and Walmart, Lowe’s Home Improvement and Home Depot. There are even more major direct competitors that fit into these categories. Small, local stores in your community have direct competitors as well- think of boutiques, restaurants, breweries, or any other small businesses in your community!

Indirect competitors can be a little more tricky to differentiate. An indirect competitor is someone who targets the same client need in the same market as you, but with different solutions that still satisfy the customer’s need.

Examples of indirect competition vary more than examples of direct competitors because they can fall into different categories. Say you are going out to dinner with some friends, and you are looking at different local restaurants. You might suggest a Mexican restaurant, an Italian restaurant, and a Japanese restaurant. Since these are three different types of food, technically they are indirect competitors. However, they all satisfy the customer’s need of eating dinner at a similar price point.

How To Use Competitor Research:

After you do your competitor research, both for direct and indirect competitors, you can start to break down the information. First, look at the basic differences between you and your competitors. What are the prices differences? Does one seem to have better durability or higher quality materials? How easy is it for customers to purchase from you vs your competitors?

Next, look into what strategies they are using, and what goals they have. Are they creating new products, or expanding into new markets? Are they improving on current products? How quickly are they growing? Looking into what they’ve been doing, and how they’ve been doing, can help you stay a step ahead.

Whether you are looking at your direct or indirect competitors, it is important to keep up with them! Healthy competition is a good thing, but by being aware of your competitors you can improve your marketing stratifies and make sure that you are giving your customers what they are looking for.


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