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One of the purposes of identifying competitors is so you can develop a competitive strategy to deal with each one. However, when you create a list of head-to-head competitors, this can sometimes be a long list. For example, if you’re starting up a business as an electrician, you may find 50 other electricians are working in your local area. You don’t want to have to come up with 50 different competitive strategies, so your best tactic is to try to group these competitors in some way.

Try this process:

1 List your competitors in a small number of groups based on similarities.For example, the electrician may split their list of 50 other electricians according to size of the business, focus of the business (maybe some focus more on repairs, others on hot water, others on new buildings), or by locality or suburb.

2 Think about how you’ve organised these groups. Will a customer looking for your kind of business use these same criteria?For example, if a customer is searching online for an electrician, are they going to search by suburb, by specialty, or by services provided (such as 24-hour call outs)?

3 Have a think about where you belong in the scheme of things.For example, the electrician may decide they want to focus on solar systems but within a 50-kilometre radius only.

4 Think to the future. Do you want to be in this same group in five years’ time?For example, maybe the electrician has a vision to offer not just solar installations, but home-energy consultations also.

By organising your competitors into groups, you can build a clearer idea about how to develop different competitive strategies, depending on what kind of competitor you’re dealing with.