Definition: Identifying your competitors and evaluating their strategies will allow you to determine their strengths and weaknesses in relation to your own restaurant.
A competitive analysis is critical to set up a winning Marketing Plan. With a thorough evaluation, you can establish what makes your restaurant unique, and what will be your marketing angle in order to reach your market.
Place your competitors in strategic groups according to how they compete for the share of the market dollar in your area.
For each competitor or strategic group, list their **cash-cow dishes, evaluate their service, their objectives as well as their current and past strategies. Evaluate their strengths and weaknesses, and *gross sales.
Answer those questions:
- Who are your competitors? List all the restaurants within your 3 miles radius of influence.
- What type of food do they offer?
- What is each competitor’s market share? *Evaluate their lunch and dinner business
- What are their *Past marketing strategies?
- What are their *Current marketing strategies?
- What type of media if any do they use to market their restaurants?
- What are each competitor’s strengths and weaknesses?
- What potential threats do your competitors pose?
- What potential opportunities do they make available for you?
- How many time your customers eat out every week and where?
A quick and easy way to compare your restaurant with the ones in your zone of influence is to make a competition grid. Down the left side of a piece of paper, write the names of all the restaurants which are in direct competition with you.
Across the top of the paper, list the main features and characteristics of each restaurant. Include such things price, Happy hour, type of food, size of the restaurant, if they have a full bar or they only serve wine & beer. How is their website, do they have food to go, do they offer catering, do they deliver or use a delivery service, do they take orders on the Internet? What other pertinent features are relevant?
Do not forget to include ready food from markets such as Von’s or Ralph. If they eat home tonight they are not in your restaurant.
A glance at the competition grid will help you see where your restaurant fits in the overall market and how to promote your business to best potential return.
* In a future post I will show you an easy way to figure out the gross income of your competition.
** Cash-Cow is the dish on your menu which has the best food cost and the most sales