Slide 8: Competition
You have explained how you are going to exchange value with customers and why you will be successful at it. However, savvy investors know that even superior products and services can lose in heavily competitive markets. For example, larger competitors can lower prices and force smaller competitors with thinner profit margins out of business. With this in mind, you need to explain the competitive landscape to the investor.
What are the Competitive Forces?
In this section you will address the major competitive forces in the industry. Start by acknowledging the competition that exists in the industry. Make reference to the largest competitors. If you don’t have any identifiable, direct competitors, then focus on the substitute products in the market and the threat of new competitors entering the market. In do so, mention the existing barriers to entering the market. Explain why these barrier make it difficult to enter and how you are able to overcome these barriers where others are not. Other competitive factors include the level of buyer or supplier strength. A disproportionate amount of strength among either group can make the landscape less favorable and more competitive. Also, address whether there are any on-going competitive rivalries relevant to the market? For additional information on describing the competitive landscape, refer back to the Strategic Analysis chapter.
Keep it Simple
When laying out this information in the slide, be a short and direct as possible. For example, you may use the logo of competitors, rather than their names. Logos do a better job of grabbing investor attention than written words.