We choose the right competitors. Types of competitors: direct, indirect and potential

Competitors are companies that operate in the same area of ​​market relations that produce and sell the same or similar goods or services.

All competitors are divided into:

Direct competitors are companies that sell similar products or provide similar services, and the consumers of these companies are also similar. Direct competition is established between companies of the same type.

Indirect competitors- These are companies that work for similar consumers, but sell a different product. In the case of elite or wooden windows, these are indirect competitors. The task of the company is to convince the consumer that it is not worth overpaying for "eliteness", and also it is not necessary to install wooden windows for ... such and such reasons. This is not very easy to do, but still easier than standing out from direct competitors.

Indirect competitors quite often combine into holdings and deal a powerful blow to competitors.

If companies have similar products, but different consumers, then competitors are called " commodity". Commodity competitors unite even more often than indirect ones, and such alliances are very effective and profitable for both companies.

Implicit competitors- these are those for which both goods and consumers are different. A huge number of business entities fall into this category, and they become competitors only because there is an immovable concept of the size of the consumer wallet

P potential competitors. These include:

1. Existing companies that do not yet play in our market, but can start doing so at any time. For example, they decide to master, in addition to their own, our niche of goods and services;

2. Indirect competitors. If one of them realizes that our products and services are willingly bought up by his own customers, then he will wish to weaken this influence. And it will begin to duplicate our offers, thereby retaining buyers. Most of the other competitors can do the same.

3. A company that can offer a more effective solution to the problem for our customers can also become a potential competitor. This will be especially dangerous in the case when such a solution significantly reduces the costs both in terms of money and effort.

4. Also potential competitors these are the companies or individual entrepreneurs who at any time can come to our niche after us. And then the state of affairs in our market will change dramatically and we will have to look for ways to resolve problems that have suddenly arisen: reducing the number of customers, profits, dumping prices, etc.

Finding and analyzing all existing and potential sources of competition is an almost impossible task. After all, there can be a lot of direct, indirect and potential competitors: several tens, hundreds, or even thousands. Therefore, it is necessary to single out only the most serious and dangerous competitors. It is they who will be able, either now or in the future, to have a real and significant impact on the business.

Textbook Slagoda pp. 78-85, p.
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110-119

Competition underlies the functioning of a modern market economy.

If you look at the economy from the side of a multitude of goals and means to achieve them, then you can talk about the competition of goals and means. Competition represents the possibility for something to be chosen or rejected because of the preference of another. If one means is to be used to achieve different mutually exclusive goals, then there is competition goals use of the good as a means. If there are different means of achieving the same goal, also mutually exclusive, then there is competition of means. For example, a bag of grain can act as an end (in agriculture) and as a means to an end (in the production of alcohol).

Usually, when an economic agent is considered as a buyer (consumer), we are dealing with a competition of goals: the same amount of money should be used to buy a variety of sets of benefits. When an agent is considered as a seller (producer), we are dealing with competition of means: the same amount of good must be produced using different combinations of resources.

If there is a choice - no matter the goals or means - then for a rational person there is also a meaning (aim) of the choice itself: the best solution. It is usually believed that in the competition of goals, one is chosen that gives the best (maximum) result with given means, brings the greatest benefit to the person making the decision, or to the one in whose interests it acts. Accordingly, in the competition of means, an option is chosen that minimizes the means of achieving the goal, the desired result. This duality in the understanding of rational choice - either ends or means - is also manifested in economic theory.

In practice, there may be mutually exclusive goals - goals that contradict each other and cannot be achieved simultaneously.

The competition of various goals (or means) - the basis for making any decision - is supplemented by the competition of economic agents, which are not only people, but also organizations.

When alternative goals are compared among themselves by the same person, he begins to realize the limits of the realization of existing desires, or the inevitability of ʼʼsacrificesʼʼ. This happens when in the process of interaction - negotiations on the terms of the transaction - the agents fail to agree on mutually acceptable conditions for its conclusion. Regardless of the results of the negotiations on the exchange of benefits, the very participation in them allows each agent to receive an objective assessment of his own claims from other such agents.

Along with straight assessment of the claims of each agent on the part of his direct partners in the transaction, real or not indirect grade. An indirect assessment is the claims of agents who are ready to engage in negotiations. For example, for an apple seller in the market, buyers of apples give a direct estimate of his price claims, while other sellers of apples give an indirect estimate. If the price of other sellers is lower, then in conditions of free competition he is forced to either accept their price or leave the market. If other sellers have a higher price, then they will have problems selling the goods. If there are no other sellers, then there is no indirect competition. But direct competition remains, in which potential buyers face a choice: buy a good or produce it themselves.

The same can be said about buyer competition. It must also be direct and indirect.

The ratio of direct and indirect competition in the exchange of certain types of goods (see table) is usually perceived as an indicator of the development of market infrastructure. In a normal market economy, indirect competition prevails. In transitional conditions, the role of direct competition is great.

The main result of competition between people and enterprises is the gradual specialization of each of the producers in what he does relatively better than other manufacturers, and therefore can be sold at a lower price than competitors offer.

Competitor analysis

kind of trap.

One side

On the other hand

Direct competitors

Indirect competitors

Rules for conducting a SWOT analysis.

Rule 1: Carefully define the scope of each SWOT analysis. Organizations often conduct general analyzes that cover their entire business. It is likely to be too general and of little use to those managers who are interested in opportunities in specific markets or segments. For example, focusing a SWOT analysis on a specific segment ensures that the most important strengths, weaknesses, opportunities, and threats are identified there.

Rule 2 . It is important to understand the differences between SWOT elements: strengths, weaknesses, opportunities and threats. Strengths and weaknesses are internal features of the organization, therefore, under its control. Opportunities and threats are related to the characteristics of the market environment and are not subject to the influence of the organization.

Rule 3. Strengths and weaknesses can be considered as such only if they are perceived as such by consumers. Only the most relevant strengths and weaknesses should be included in the analysis, and they should be determined in light of the needs of competitors. A strong side will be considered as such only if the market recognizes it. For example, the quality of a product will only be a strength if it is higher than that of competing products. As a result, there can be a lot of such strengths and weaknesses, so it will be difficult to figure out which of them are the main ones. To avoid this, strengths and weaknesses should be ranked according to their importance in the eyes of consumers.

Rule 4. For greater objectivity, it is necessary to use versatile incoming information. It is clear that it is not always possible to conduct an analysis based on the results of extensive marketing research, but it is also impossible to entrust it to one person, since such an analysis will not be as accurate and deep as an analysis carried out in the form of a group discussion and exchange of ideas. It is important to understand that a SWOT analysis is not just a listing of managers' suspicions and must be based on objective facts and data.

Rule 5. The wording of the results of the analysis should not have double interpretations. Too often, the quality of a SWOT analysis suffers from statements that are likely to mean nothing to most consumers. The more precise the formulations, the more useful the analysis will be.

Choice of legal form

State regulation of the activities of commercial organizations

Depending on the purpose of the activity, there are two types of organizations - commercial and non-commercial. The main purpose of a commercial organization is to make a profit. Its participants have a wider range of rights compared to participants in non-profit organizations, the fundamental difference is that in commercial organizations, participants have the right to direct profit. But they also bear a great economic responsibility for the results of their organization.

Any of these types of organization must be registered in one of the organizational and legal forms of an economic object, depending on which the method of fixing and using the property belonging to the organization is determined. To legalize the activities of any enterprise, it is necessary to register a legal entity and choose a legal form (OPF).

When choosing an OPF for registering an enterprise, you should be aware that there are restrictions for commercial organizations regulated by Article 50 of the Civil Code of the Russian Federation “Commercial and non-profit organizations”.

According to the legislation, "legal entities that are commercial organizations can be created in the form of economic partnerships and companies, economic partnerships, production cooperatives, state and municipal unitary enterprises." The list of forms can only be adjusted at the state level.

Risk assessment

Risk assessment is a set of analytical measures that make it possible to predict the possibility of obtaining additional business income or a certain amount of damage from a risk situation that has arisen and untimely taking measures to prevent risk.

The degree of risk is the probability of a loss occurring, as well as the amount of possible damage from it.

The risk may be:

1. acceptable - there is a threat of a complete loss of profit from the implementation of the planned project;
2. critical - not only profits are possible, but also revenues and loss coverage at the expense of the entrepreneur's funds;
3. catastrophic - loss of capital, property and bankruptcy of the entrepreneur are possible.

Quantitative Analysis - this is the determination of the specific amount of monetary damage to individual subspecies of financial risk and financial risk in the aggregate.

Entrepreneurial losses - this is primarily an accidental decrease in entrepreneurial income. It is the magnitude of such losses that characterizes the degree of risk. Hence, risk analysis is primarily associated with the study of losses.

Depending on the magnitude, there are three groups of probable losses:

1. losses, the value of which does not exceed the estimated profit, can be called admissible;
2. losses, the value of which is greater than the estimated profit, are classified as critical - such losses will have to be compensated from the pocket of the entrepreneur;
3. even more dangerous is the catastrophic risk, in which the entrepreneur risks incurring losses in excess of all his property.

The probability of an event occurring can be determined objective method and subjective.

Objective method used to determine the probability of an event occurring based on the calculation of the frequency with which the event occurs.

subjective method is based on the use of subjective criteria, which are based on various assumptions. Such assumptions may include the appraiser's judgment, his personal experience, the assessment of the rating expert, the opinion of the auditor-consultant, etc.

Three ways to determine losses: statistical method, method of expert assessments, analytical method.

The essence of statistical The method lies in the fact that the statistics of losses and profits that have occurred in a given or similar production are studied, the magnitude and frequency of obtaining one or another economic return is established, and the most probable forecast for the future is made.

Method of expert assessments usually implemented by processing the opinions of experienced entrepreneurs and professionals. It differs from statistical only in the method of collecting information to build a risk curve.

This method involves the collection and study of estimates made by various specialists (of the enterprise or external experts) of the probabilities of occurrence of various levels of losses.

Analytical method building a risk curve is the most difficult, since the elements of game theory underlying it are available only to very narrow specialists. A subspecies of the analytical method is more commonly used - model sensitivity analysis.

13. Primary documents of the financial plan.

To draw up a financial plan, the following primary documents are used - sources of information:

1. management accounting tables with aggregated financial data;

2. contracts (terms of contracts, terms of payment);

3. macroeconomic indicators of inflation and lending rates;

4. tax legislation (rates and mechanisms for calculating taxes);

5. information on possible volumes of attracting external financing;

6. marketing research data on the volumes and prices of product sales, data on the strategic marketing plan;

7. data from suppliers on prices for raw materials, materials, equipment;

8. data from equipment manufacturers on performance specifications;

9. labor market data on wages by specialty. It is possible to draw up an operational plan as a source of information. The operational plan reflects the results of the interaction of the firm and its target markets for each product and market for a certain period. At the firm, this document is developed by the marketing service. The set of indicators of the operational plan shows what market share is occupied by the company for each product and what share is expected to be won in the future. Indicators are determined for each type of product, which allows you to compare them.

The main documents of the financial plan consist of a bunch balance sheets - financial results - cash flows . The elements of this link correspond to three main types of financial plans (reports) and three main accounting forms:

a) balance plan-report (form No. 1);

b) plan-report on financial results (form No. 2);

c) plan-report on cash flow (form No. 4).

In fact, the three main report plans reflect:

a) assets in the context of the structure and sources of formation of assets;

b) income, expenses and financial result;

c) cash receipts and payments, cash balance and deficit/surplus.

Cash flow plan

The current financial planning document is the annual cash flow plan. The need and importance of preparing this document is due to the fact that the concepts of "income" and "expenses" used in the "Income and Expenses" plan do not reflect the actual cash flow, these are indicators calculated "on paper" (accrual method). In the DDS plan, the receipt of funds and their write-off are reflected taking into account the schedules for payment of receivables. The DDS plan is a plan for the movement of funds on the current account and in the cash desk of the enterprise and its structural unit, reflecting all projected receipts and withdrawals of funds as a result of the financial and economic activities of the enterprise.

It takes into account cash inflows and outflows in three areas of the enterprise:

· Operational and production activities;

· Investment activity;

· Financial activities.

Operating activities are related to the production and sale of products, works, services. The main cash inflow from operating activities is related to cash sales transactions.

The main items of cash outflow from production activities are:

· Payment of invoices of suppliers of materials;

· Payment of wages;

· Taxes, fees;

· Other current expenses.

The difference between the inflow and outflow of cash determines the net cash flow from operating activities.

The investment activity of the enterprise is connected with the purchase and sale of fixed assets and intangible assets, the acquisition and sale of long-term financial instruments of the investment portfolio. Consequently, transactions with assets add up the inflow and outflow of cash. Comparison of inflows and outflows of money is determined by the final result of the investment activity of the enterprise.

Cash flows from financial activities are associated with attracting additional or share capital, obtaining loans and borrowings, paying dividends, and paying off debts.

Analysis of cash in these three areas allows you to identify the effectiveness of management of the production, investment, financial aspects of the enterprise.

The DDS plan in expanded form is drawn up by analogy with form No. 4 of financial statements. At the same time, in relation to the practice of management, most of the indicators are difficult to predict with sufficiently high accuracy. Cash forecasting is often reduced to determining only the main components of cash flow.

At the same time, in relation to the practice of management, most of the indicators are difficult to predict with sufficiently high accuracy. Cash forecasting is often reduced to determining only the main components of cash flow.

Profit and loss plan.

To the profit and loss plan(financial results, income and expenses) include:

1. proceeds (income) from the sale;

2. costs (costs, expenses);

3. tax and other deductions.

Based on these indicators, the profit remaining at the disposal of the company is calculated. According to the plan, you can determine whether the activity brings profit to the company. The ultimate goal of this document is to show how profits will change and form.

It must be borne in mind that financial result (profit or loss)- this is just an assessment of the company's performance, which largely depends on the applicable cost allocation rules and revenue recognition rules.

If you prepare a profit and loss plan in the context of individual products, then you can compare different products in terms of profitability in order to determine the feasibility of their further production. The following are the main items of the profit and loss plan:

Revenues from sales.

Direct costs.

Marginal profit.

overhead costs.

Competitor analysis

When preparing the "Competition" section, the company must adequately identify its competitors, justify the choice of those with which it will compare and explain what its competitive advantages are.

First, the company must agree on its definition of competition with investors. Definition of competition from the point of view of professional investors: any products and services that a consumer can use to meet the same needs that are satisfied by the company's products / services. It includes companies offering similar products, replacement products and other solutions.

Any business plan containing the assertion that there are no competitors seriously undermines the credibility of the management team.

When describing competition, companies fall into their own kind of trap.

One side, they want to show investors that they have no or very few competitors because their product/service is unique (regardless of the above definition from an investor's point of view).

On the other hand– this creates a negative perception on the part of investors. They may assume that the absence of competitors indicates that the demand in the market is too small for the company to be successful in it.

Direct and indirect competitors

The business plan should identify direct and (if possible) indirect competitors. Direct competitors operate in the same target market, with the same products and services.

Indirect competitors operate in the same market with other products/services or in another market with similar products and services.

After competitors are identified, they need to be described in detail. Then you should objectively analyze the strengths and weaknesses of competitors, as well as the main success factors and ways to differentiate from competitors.

Most important in the Competing section is a description of our competitive advantage over other companies and, if possible, a description of how our business model will make it difficult for new competitors to enter. “Barriers to market entry” are the reasons why clients who have started working with you will not switch to new market participants.

Too many business plans try to show the uniqueness of the company and therefore report no or few competitors. However, this leaves a negative impression.

The absence of competitors in the market suggests that the number of potential customers is too small to provide them with work. In fact, the inclusion in the business plan of a description of a large number of companies in the market (with the correct positioning of your company) is a signal confirming that the market is large enough. And this, in turn, gives investors confidence that if the management does everything right, the company will make a good profit and become an interesting object for sale.

Only these three types of competitors matter. This model of competition is applicable to all industries and for all business entities.

Three types of competition

Direct competitors

This type of competition occurs whenever there are other businesses within the same market sector that offer the same products and services as your company. You directly compete with each other in terms of location, reach of the target audience and for your products. In the case of direct competition, your customer relationship management plays an important role, allowing you to take market share. If a customer receives excellent service from a company, they are unlikely to move to a competitor.

Indirect competitors

This type of competition occurs when someone from another company takes a customer away from you by offering products or services that are not in your range. For example, for cinemas, the Internet and cable television become an indirect competitor. A certain part of the target audience is given the opportunity to watch movies in good quality exclusively at home. Thus, this type of competition makes it necessary to build barriers to lure customers.

In the case of indirect competition, your marketing strategy should include a broader selling proposition, and you should run strong promotions so that the customer cannot ignore you.

Competitors are phantoms

This phenomenon occurs when, instead of buying your service or your product, the customer is going to buy something completely different. This type of competition includes offerings from companies that don't exist in the typical mindset of customers. For example, in the example above, instead of going to the cinema, the customer can easily change their plans when they go to the mall. He can get carried away shopping or, having met friends, spend time with them in a cafe for a friendly conversation. At this point, the client changed his plans and did not spend his money in your company.

The selection of such competitors is very difficult to conduct, because it is completely in the minds of customers. Marketers are aware of direct and indirect competitors, but if a product has too many phantom competitors and eventually your offer is ignored by a potential customer, then the product or service will have a very short life cycle. Against phantom competitors, more engaging promotional activities are needed.

The nature of competition in business

In a market economy country, there are a number of different market systems that depend on the industry and the company within that industry. It is also important for entrepreneurs and small business owners to understand what type of market system they operate in when making decisions about the price and production of products. The behavior of your company in the market is predetermined by 5 types of competition and their corresponding market relations.

Perfect Competition

This is a system characterized by the presence of a large number of different sellers and buyers. With such a large number of participants in the local market, it is almost impossible to dramatically change the prevailing price in the market and get a strategic victory. If someone tries to set a dumping price, then the sellers will have an infinite number of alternative options to repel the attack and lead the initiator to negative economic results.

Monopoly

The exact opposite of perfect competition. In a pure monopoly, there is only one producer of a particular good or service, and there is no reasonable substitute at all. In such a system of market relations, the monopolist is able to charge any price. The one he wants because of the lack of competition. But its total income will be limited by the ability or willingness of consumers to pay the price of the monopolist.

Oligopoly

Similar in many ways to a monopoly. The main difference is that instead of one producer of a good or service, there are several companies that make up the dominant majority of production in the market. While oligopolies do not have as high price power as a monopoly, it is likely that, without government regulation, oligopolists will collude with each other to set prices in the same way as a monopolist.

Monopolistic (imperfect) competition

P is a type of market relations that combines elements of monopoly and perfect competition. The difference is that each participant is sufficiently differentiated from the others. Therefore, some of them may charge higher prices than under perfect competition. Accordingly, this type of relationship allows you to extract additional profit due to visible differences.

Monopsony

Market systems can be differentiated by more than just the number of suppliers in the market. They can also be differentiated depending on the number of buyers. Whereas in a perfectly competitive market there is theoretically an infinite number of buyers and sellers, in a monopsony there is only one buyer for a particular good or service. This gives considerable power to the buyer in lowering the price of the producers' goods and services. An example of such relations is the modern form of public procurement, in which a state enterprise, forming unique requirements for a government contract, becomes a monopsony in a very narrow local market.

Brief structure of market relations in the economy

Fundamental and structural differences in the nature of competitors

Variety of goods and services

• In perfect (pure) competition, products are standardized because they are either identical to each other or homogeneous. The buyer does not see any differences in the products offered on the market, as they are absolute substitutes for each other. For example, food at different retail outlets, automotive fuel at different gas stations.
• Monopoly, by definition, means that there is only one producer of a product in the market. The buyer has no choice of any other option. An important factor is state regulation and restrictions on natural monopolies in order to maintain a balance of interests of the state, producers and consumers.
• Oligopoly implies the production of homogeneous products, as in pure competition, and differentiated products (as in monopolistic competition). The main problem for entrepreneurs is the barrier to entry to the market.
• In monopolistic competition, products are differentiated in terms of product brand, shape, color, style, trademark, quality, and durability. Buyers can easily distinguish a product offered on the market from those available on the market by more than one criterion. However, under monopolistic competition, the products on the market are close substitutes for each other. For example, cars of the same class, but different manufacturers.
• With monopsony, conditions are created under which product differentiation is influenced by the production needs of the buyer. At the same time, state-approved standards and regulatory procedures become important factors.

Market Barriers

• In pure competition, the number of producers is large, so that any single change in the entry or exit of any of the participants in the market does not have a significant effect on the total volume of goods or services offered. Market barriers are minimal and are determined by the availability of funds for the entrepreneur. In this situation, we can talk about the infinite elasticity of demand. The level of profit within the local market will be distributed evenly.
• The main reason for the existence of monopolies is the high barriers to entry into the market. These barriers include exclusive ownership of resources, copyrights, high initial investment, and other restrictions on the part of the government in order to maintain proper welfare in the state.
• Oligopolies seek to prevent new competitors from entering the market, as this affects sales and profits. New companies cannot easily enter the market due to various legal, social and technological barriers. In this case, existing enterprises have full control over the sales market.
• It is understood that under monopolistic competition there are no restrictions placed on organizations to enter and exit the market. A large number of small sellers can be on the market at the same time, selling differentiated, but not close to substitution, products.
• Monopsony implies a large number of suppliers of goods and services and low barriers to entry. Thus, conditions are formed for reducing the cost of purchased products and increasing their own profits.

Business mobility

• Under pure competition, there is perfect mobility of production. This helps companies in adjusting their own supplies according to demand. It also means that resources can move freely from one industry to another.
• For monopolies, there is no mobility as such. Such structures have the exclusive right to certain resources, which by their nature are limited. These may be raw materials, or monopolies may arise due to specific knowledge of production techniques (patent law).
• For oligopolies, mobility is limited or absent. In monopoly and perfect competition, businesses do not take into account the decisions and reactions of other companies. Oligopolies are influenced by each other's decisions. These decisions include pricing issues and decisions on the volume and production of own products, taking into account the situation in the market.
• Monopsony does not imply mobility due to its own characteristics. Technological advances and economies of scale from innovation are important factors in this situation.

Efficiency and business size

• It is assumed that under perfect competition, buyers and sellers have perfect knowledge of the prices of products prevailing in the market. In such a case, when sellers and buyers are fully aware of the current market price of a product, neither of them will sell or buy at a higher rate. As a result, the market price will dominate the market. The efficiency and size of the business is primarily affected by demand and the organizational and economic indicators of the company itself.
• The effectiveness of the monopoly is achieved through many years of experience, innovative potential, financial strength, but is reduced due to managerial competence and the availability of financial markets with a lower cost of borrowed capital.
• Oligopolies are not uniform in size. Some businesses become very large in size, while some remain very small. Market capacity determines the size, therefore, business efficiency is determined by the monopoly model. Oligopolies tend to avoid rash changes in the price of their products for fear of losing market share.
• In monopolistic competition, each seller's product is unique, which is a sign of a monopoly market. Therefore, it can be said that monopolistic competition is the integration of perfect competition and monopoly. Therefore, the same factors affect the efficiency and size of a business as in pure competition as in a monopoly.
• In a monopsony, the efficiency and size of a business do not depend on the market for goods and services.

Conclusion

The somewhat abstract issues described above tend to define the major, but not all, details of a particular market environment where buyers and sellers actually meet and transact. Competition is useful because it shows the real demand of buyers and encourages sellers to provide a sufficient level of quality of service and a level of competitive prices. In other words, competition can combine the interests of the seller with the interests of the buyer. In the absence of perfect competition, three main approaches can be taken to address the problems associated with the control of market power.

Any commercial organization has both direct and indirect competitors. A direct competitor is a company that offers the same goods and services to the same customer base. An indirect competitor is a company that offers the same or similar in quality, properties and purpose goods and services, but not as its main line of business, but as part of it, as part of its general activities, as well as a company offering such goods and services that can serve as a full-fledged replacement for the proposals of the first. Both types of competition can have a significant impact on an organization's operations, and a good business plan should consider both types of competitors.

One of the main differences between direct and indirect competition lies in the type of enterprises and their business model. To be considered a direct competitor, a company must be in the same industry as the one it is being compared to. For example, a direct competitor to a video rental company would be a similar location or chain of video rental kiosks. In addition to the same field of activity, a direct competitor works with the same contingent of customers. Therefore, an online video rental store would also be considered a direct competitor of the organization in question, even though the company that owns it may be located in a different geographic location.

In turn, the indirect competitor of this organization will be a company that offers the same or similar products and services, but not as its main line of business, but along with other products and services. If we return to the example of the same video rental, then its indirect competitors include supermarkets and large shopping centers, where, in addition to all other departments and sections, there is also a video rental point. The situation is similar with the point of sale for the sale of grilled chicken. Supermarkets often have a section for cooking and selling grilled chicken, which is also an example of indirect competition.

The difference between direct and indirect competition is not always so obvious. Indirect competition can also be created by a company whose business is an alternative to yours. For example, a grilled chicken outlet not only competes directly with similar outlets, but also competes indirectly with a snack bar, pizzeria, sandwich stand, and other fast food outlets. Despite the fact that the goods they offer are different, each of the enterprises provides the same service - it provides fast food at a low price.

When drawing up business plans and developing marketing strategies, many organizations do not pay due attention to direct and indirect competitors, and both can significantly affect the success of a business. It is worth noting that, according to studies, indirect competitors can lure even more customers from an organization than direct ones. This is especially true when a competitor located in the same geographical location offers a wide range of products and services. For example, if a certain customer prefers to buy grilled chicken at point "A", he is unlikely to go and buy it at point "B", but if the same customer buys groceries in a supermarket, which, among other things, has a section for preparing and selling chicken grill, then he is more likely to buy chicken there, and not stop at point "A" on the way home.