Business Selling Prep: Market Competition

The buyer will analyze your competitive position.

They may request that you list your competition along with the strengths and weaknesses of each competitor:

if you are operating in an emerging market, you may have few competitors. But fast growing markets invite in new players with new capital that can challenge your dominant position.
if you are operating in stable markets, you may have many competitors who hold a strategic position in the market. It is unlikely to see new competition; but it is possible for mergers and acquisitions that may give a competitor added strength and depth.

The buyer will discuss your competitive defense:

define the barriers of entry into your market — how easy or how difficult is it from someone entering your market to compete?
define the the barriers of exit — can a competitor exit the business fairly easy or are the barriers so high that an attack on a competitor may force retaliation in price or other?
what competitive threats do you find from players in the value chain — can your supplier or buyer move down or up the value chain to compete directly?
what gives you an competitive advantage over the next player: is it your retail location, target location, product offering, or what?

Business Selling Prep