V. Competitive Analysis
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Direct & Indirect Competitors
The following businesses are located within a 2 mile radius of [Company Name], thus providing either direct or indirect competition for customers:
Premier Beauty, Inc.
Premier Beauty operates about 1,000 stores across the US, making it the country’s biggest specialized beauty retailer. The company stocks more than 10,000 products, including cosmetics, fragrances, skin and hair care products, salon styling tools, and accessories. In addition to its brick-and-mortar presence in retail power centers, the company operates an e-commerce site that sells items available in stores plus brands available only online.
Premier Beauty has products from some 300 product vendors, which altogether offer more than 500 brands. Its top 10 vendors include the likes of Bare Escentuals, Procter & Gamble, Coty, and L’Oréal.
It helps that the company sells hands-on products like cosmetics that customers can try in stores. They have also developed a customer loyalty program that rewards members with deals and access to products available.
Beauty Supply USA
Through more than 300 stand-alone stores in North America and another 475 inside department stores, Beauty Supply USA takes a self-service approach to buying makeup, fragrances, and skin care products. It offers more than 200 brands of prestige products, including its own-brand products, all of which customers are encouraged to sample. The company also sells via catalog and online.
The retailer differentiates itself from competitors by emphasizing its Insider loyalty program, holding in-store events to promote selected brands, providing beauty services (including makeup lessons and express hair styling), and offering a broad array of products from popular makers and its own collection.
Beauty Supplies Incorporated
Beauty Supplies Incorporated is one of the largest retailers and distributors of professional beauty supplies in the US. The company sells more than 10,500 hair, skin, and nail products in more than 5,000 stores, including franchised locations. Beauty Supplies Incorporated’s customers are consumers, salons, and salon professionals.
The stores offer products for hair, skin, and nails, and carry brands such as Clairol, L’Oreal, Wella, and Conair, as well as proprietary merchandise. Overall, products for hair color and hair care generate about 75% of the company’s sales while skin and nail care products supply about 15%.
Pricing varies widely depending on the type of product.
[Company Name] enjoys several advantages over its competitors. These advantages include:
- Location: [Company Name]’s location is near the center of town, giving us access to commuters going to and leaving the train station, local office workers, and passersby shopping in the city. We also offer adequate parking making it easy for customers to patronize us.
- Great products and services at an affordable price: The complete array of beauty products and services offered by [Company Name] nearly equals the most premium positioned competitor, [Competitor]. However, [Company Name] will offer these services at a much more affordable price.
- Management: Our management team has years of business and marketing experience that allows us to market to and serve customers in a much more sophisticated manner than our competitors.
- Relationships: Having lived in the community for 25 years, [Founder’s Name] knows all of the local leaders, newspapers and other influences. As such, it will be relatively easy for [Company Name] to build brand awareness and an initial customer base.