It is necessary to do a competitor analysis. Not least because you may use their data to define your goals, marketing plans, tactics, new product lines, pricing, and more. Use competitor analysis to:
- Identify the strength of your hair salon competition.
- Search for opportunities to distinguish your hair salon from competitors.
- Set your service’s price.
On the market, you will almost certainly discover some extremely powerful competitors, some of whom will be offering services similar to yours at unbelievably low costs. However, not every competitor works with low-cost, low-quality hair services
The first step is to determine who your direct and indirect competitors are.
The direct competition consists of other hair salon businesses that offer essentially the same services or products to the same people as you do.
Your indirect competitors are other options customers have to purchase from you that aren’t direct competitors. These include items they can buy at supermarkets and other retailers both offline and online (hair polishing, hair files, etc.). This shows that you understand that not everyone in your target market visits a hair salon on a regular basis.
Once you’ve identified the competition, concentrate on the direct, head-to-head competitors, since they are the most threatening to your hair salon— but keep an eye on the indirect competition as well, just in case.
Provide an overview of each direct competitor’s business and detail their strengths and weaknesses.
You will be able to position yourself competitively in the market if you perform proper competition research. Perform a SWOT Analysis to learn your competitors’ strengths, weaknesses, and competitive advantages in the following areas:
- Prices – Are they offer cheaper hair salon services or more costly than you and other rivals, what value do buyers get for that price?
- Quality – Are they offer premium hair salon services, the perceived worth in the eyes of the customers
- Customer service – How they respond to their consumers, whether they treat them poorly or well, and the degrees of satisfaction customers show
- Reputation — The sum of everything mentioned above: their credibility, how loved the brand is, and the loyalty of their customers
The final section of your competitive analysis should include a list of your areas of competitive advantage. for example: Are you going to offer premium hair salon products or services? Will you offer unique hair salon services that your competitors don’t offer? Will you offer better pricing or will you offer greater customer support?
Consider how you will outperform your competitors and include them in this portion of your hair salon business plan.