A business strategy is management’s game plan for strengthening performance and is essentially a long-term action plan to achieve specific goals. To have a successful strategy, it is imperative to identify key competitors and understand the wider industry.
The Goals of Competitor Analysis
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Competitor analysis is a way of comparing your business to rivals based on their strengths, weaknesses, and strategies.
The three main goals are:
1. Identify Competitors: Determine who your rivals are—this can be challenging for organizations operating across multiple locations.
2. Look at Strategies: Understand their objectives and how they align with yours.
3. Determine Capabilities: Assess their strengths and weaknesses to see if they are capable of stealing customers or dominating the market.
Analysis should include looking at market share, pricing, competitive advantage, and customer perceptions (positives and negatives).
Direct vs. Indirect Competition
• Direct Competitors produce the same product and target the same customer (e.g., Costa Coffee vs. Starbucks).
• Indirect Competitors operate in the same industry and target the same customers, but may not offer the exact same products (e.g., McDonald’s and KFC). Monitoring indirect competitors is vital because they may introduce a new product that becomes direct competition later.
Building a Winning Hospitality Strategy
For a pub, differentiation is key to competing successfully. For example, a venue can compete by focusing on community, atmosphere, and experience. Specific competitive advantages can include:
• Live Sport Access: Providing services like Sky Sports and TNT to pull in strong trade on match days.
• Tech-Driven Marketing: Using tools for engaging, timely social media content to stay visible.
• Team Culture: Ensuring staff are well-trained and visible, setting a service standard apart from budget-led venues.
Strategic Tools: PESTLE and Five Forces
Managers can use strategic analytical tools to understand the external environment:
• PESTLE Analysis: This six-stage framework analyzes factors outside the business’s control (e.g., the impact of legislation).
◦ Political (e.g., tax or fiscal policies)
◦ Economic (e.g., inflation, interest rates)
◦ Social (e.g., cultural trends, seasonal events like the World Cup)
◦ Technological (e.g., digital media, automation)
◦ Legal (e.g., Health & Safety, GDPR)
◦ Environmental (e.g., weather changes, recycling commitments)
• Five Forces: This graphic helps understand competitive rivalry:
◦ Threat of New Entrants
◦ Buyers Power (customer willingness to switch)
◦ Competitive Rivalry
◦ Suppliers Power (fixed costs or limited choice)
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◦ Threat of Substitution
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Real-time labour %, cash position and VAT liability in one dashboard. Built by a working pub landlord. £97 once, no monthly fees. 30-day money-back guarantee.
Get Pub Command Centre — £97 →By analyzing these forces, a business can understand how easy it is for new venues to open, how much power customers and suppliers have, and where its offering is most at risk.
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