What is the purpose of a competition plan?

The purpose of a competition plan primarily revolves around anticipating and understanding how various market entities, such as competitors, customers, and other stakeholders, may respond when new competitors enter the market. By focusing on forecasting reactions to new competition, organizations can better prepare their strategies to maintain or bolster their market position.

This foresight allows businesses to consider potential price changes, shifts in customer loyalty, and alterations in market dynamics that could arise from competitive actions. Developing a competition plan helps firms become more proactive, enabling them to adapt their marketing strategies, product offerings, and service levels in response to competitor movements, thus enhancing their chances of success in a competitive landscape.