A competitive analysis lists the businesses your customers could buy from instead of you, compares them on the things customers care about, and explains how you will win enough of those customers. For a micro business, it usually covers three to six competitors within walking or delivery distance, plus any indirect options like the palengke, a convenience store or online sellers.
Who counts as a competitor
Direct competitors sell the same thing to the same people: the other food cart at the same terminal, the other laundry shop on the same street. Indirect competitors meet the same need in a different way: a convenience store selling snacks, a mall food court, a delivery app, or customers making it at home.
List both. A water refilling station competes with other stations, but also with bottled water at the grocery and with households that boil tap water. Leaving out indirect options makes your plan look naive to a lender who knows the area.
What to compare
Visit each competitor as a customer at least once. Buy something. Note what you see without guessing at their income or profit, which you cannot know.
- Price of the two or three items most customers buy
- Opening hours and days
- Location and visibility
- Speed of service and waiting time
- Cleanliness and look of the space
- Delivery, credit or other extras
- How busy they are at peak hours, from your own count
- What customers praise or complain about
Worked example: a food cart near a jeepney terminal
Example: a food cart near a jeepney terminal in Davao City. This illustration uses placeholder competitors and blanks. Use your own visits.
"Within 100 metres of the terminal there are three carts and one convenience store. Cart A sells fishballs and kikiam at ₱____ per stick and is busy from 5pm to 8pm. Cart B sells siomai and opens only on weekdays. Cart C sells drinks. The convenience store sells packed snacks and is open all day. Nobody near the terminal sells a filling meal under ₱____ before 7am, when we counted [number] commuters boarding in one hour. Our cart will open at 5am selling rice meals in a cup and coffee, then switch to merienda items in the afternoon, so we compete head-on with Cart A only after 3pm."
Notice that the example finds a gap in time, not just in product. It is honest that the cart competes directly in the afternoon. A reader trusts a plan that admits where the competition is strong.
Explaining how you will compete
After the table, write two or three short paragraphs on your position. Pick one main advantage you can keep: a better location, hours that fill a gap, a product nobody nearby sells, faster service, delivery, or trusted credit for suki. Price alone is a weak advantage for a micro business, because a competitor can match it the next day and your margin shrinks.
Also say what you will do if a competitor reacts: lowers prices, copies your menu, or opens next door. One sentence on your plan shows you have thought ahead.
Common mistakes
- Writing "we have no competitors." Every business has some, even if they are indirect.
- Guessing a competitor's sales or profit and putting it in the plan as fact.
- Comparing on things customers do not care about.
- Claiming you will be cheapest and best quality at the same time without explaining how.
- Visiting competitors only once, at a slow hour.
- Naming a competitor's owner or making negative claims about them. Stick to what any customer can see.
Competitive analysis checklist
- List every direct competitor within reach
- Add indirect options like the palengke, convenience stores and online sellers
- Visit each one as a customer and buy something
- Fill in the comparison table from what you saw
- Pick one advantage you can keep
- Write what you will do if a competitor reacts
Competitor comparison template
| Factor | You | Competitor A | Competitor B | Competitor C |
|---|---|---|---|---|
| Main item price | ₱____ | ₱____ | ₱____ | ₱____ |
| Hours | ____ | ____ | ____ | ____ |
| Distance from customers | ____ | ____ | ____ | ____ |
| Extras (delivery, credit) | ____ | ____ | ____ | ____ |
| Busy at peak? (your count) | n/a | ____ | ____ | ____ |
| Customer complaints heard | n/a | ____ | ____ | ____ |
Questions people ask
- How many competitors should I include?
- Three to six is enough for most micro businesses. Include every direct competitor in your immediate area and the main indirect options.
- What if there is no competitor near me?
- Check why. It may be a gap, or it may mean there is not enough demand. Include indirect competitors, and explain why you think the gap exists.
- Can I include franchise brands as competitors?
- Yes, describe what any customer can see, such as price, hours and location. Do not guess at their sales or make claims about them.
- Should I use a SWOT analysis?
- You can add a short SWOT for your own business if your school or lender asks for it. The comparison table is usually more useful because it is based on what you observed.