Last Fall I started a project to create a second edition of my book: The Entrepreneur’s Notebook.  Periodically I present a piece of the original text, and ask for suggestions or additions.  I was hoping some of the great marketing minds I have met on the net would weigh in on some of the topics.   And I have gotten some good feedback.

But I got busy, and haven’t put a section up recently.  Well it is time to get back at it.  Contributors will be included with credit in the revised text, which I still hope will be released some time next summer.

Today’s Text comes from a new section on Your Competitors I want to add to the 2nd addition. What do you think:

Even new, completely innovative products have competition. Long before your product comes into the market, customers have found ways to solve their problems. Understanding who your real competitors are is critical to your business success. As you analyze your competitors, it can be helpful to think about the three levels of competition.

Level Two. These companies offer an alternative solution to your customer’s problem. On the surface, they may not appear to be a direct competitor because the product or service is dramatically different. If, however, this alternative solution solves your customer’s problem, it is a competitor.

Level Three. These companies or products do not solve the same problem at all, but compete for your customer’s limited resources.

Your business may not have competitors in every category, but you have some. As you think about the solution you provide from your customer’s perspective, why would they choose one of the alternative solutions? Price? Habit? Unless you understand why they are making the choice, it will be difficult to help them choose you instead.