Business Plan - Competition

Analysis of competition is an essential component of most business plans. This section tends to cover the strengths and weaknesses of rivals and includes information about their market share, profitability, and pricing strategies. Prior to choosing books as Amazon's initial focus, Bezos analyzed his competition and realized that market share was distributed among many leading book publishers. In fact, industry leader Barnes & Noble held less than 12 percent of the $25 billion book retailing market. This market fragmentation, Bezos believed, left room for upstarts. He also planned to gain a competitive advantage over traditional book retailers by offering a wider selection and undercutting prices by 10 to 30 percent. Successful brick and mortar firms drawing up business plans for new online ventures might also include a discussion of how their established customer base and distribution outlets affords them an advantage over rivals only operating online.