Competition

1. 1

   Small-business owners believe that they operate in highly competitive climates and that these climates are becoming increasingly competitive. Fifty-three (53) percent describe their current competitive climate as highly competitive. Twenty-eight (28) percent believe that it is competitive. Sixty-one (61) percent assess the current climate as much more or more competitive than it was just three years ago.

2. 2

   Small businesses typically compete against a mix of large and small firms (57%). Twenty-eight (28) percent of small employers say that they compete principally against other small organizations and 13 percent say they compete principally against large ones.

3. 3

   The location of most competition for small businesses is local. Forty-nine (49) percent of owners say that their principal competition is located within 10 miles of their business. Another 26 percent report it is located within 100 miles. Only 4 percent indicate that their greatest source of competition originates outside the United States.

4. 4

   Large chains or box stores and foreign businesses can constitute competitive threats to smaller firms. Twelve (12) percent of small-business owners indicate that a box store or a large chain store is a significant competitor, though another 13 percent say that they are a marginal competitor. Meanwhile, 8 percent report that businesses outside the United States are significant competitors and 9 percent more say that they are marginal competitors. When given the opportunity, few small-business owners complain that either competes illegally or unethically.

5. 5

   Governments and non-profit organizations such as universities, hospitals, and trade associations, also engage in commercial activities and potentially deprive small-business owners of customers and sales. Two percent report that government is a substantial competitor while 4 percent claim it is a marginal competitor. Two percent also report a significant competitive impact from non-profit organizations and another 6 percent claim a marginal impact.

6. 6

   One in five (21%) small-business owners believes that a major competitor is competing illegally or unethically against him. The most frequent offending behavior is competitors not following the rules. For example, 8 percent of the 21 percent or about 2 percent of the population allege that a major competitor is violating copyright laws. A less frequent problem appears to involve unseemly, but amorphous behavior such as bad-mouthing another’s firm. Virtually no one alleges such traditional anti-competitive practices as monopoly, price fixing, etc.

7. 7

   Two ways of competing dominate small-business owner strategies. The first is highest possible quality and the second is better service. Over 80 percent insist that each is a major portion of the way that they attempt to compete.
   
   • Less common ways of competing than quality and service are in order: minimal overhead, maximum use of technology, targeting missed or poorly served customers, more choices and selection, unique marketing, lower prices, expansion or growth, a superior location, new or previously unavailable goods and services, alliances or cooperation with another firm or firms, and franchising.

Volume 3, Issue 8, 2003
ISSN 1534-8326

William J. Dennis, Jr.
NFIB Research Foundation

• 1How would you describe the competitive climate in which your business operates? Is it:? Top 100
• 7(competition) Is a box store or a large chain store:? Top 100
• 8(competition) Is an Internet Web site or a mail order house:? Top 100
• 11(competition) Are businesses outside the United States:? Top 100
• 2Over the last three years, has the competitive climate grown:? (If not in business three years, “Since you have been in business?”)
• 3How would you describe your PRINCIPAL competition? Is it:?
• 4Over the last three years, has the number of principal competitors:?
• 5Does your primary competition consist primarily of:?
• 6Is your primary competition located:?
• 9(competition) Is the government or a government agency:?
• 10(competition) Is a non-profit organization such as a university, hospital, or the YMCA:?
• 12Do you believe an important competitor is competing illegally or unethically against you?
• 12aWhat is the competitor doing illegally or unethically?
• 13A(business strategy) Lower prices.
• 13B(business strategy) More choices and selection.
• 13C(business strategy) Franchised goods or services.
• 13D(business strategy) Maximum use of technology.
• 13E(business strategy) Better service.
• 13F(business strategy) Minimal overhead.
• 13G(business strategy) Alliances or cooperation with another firm or firms.
• 13H(business strategy) Targeting missed or poorly served customers.
• 13I(business strategy) Highest possible quality.
• 13J(business strategy) New or previously unavailable goods or services.
• 13K(business strategy) A superior location.
• 13L(business strategy) Unique marketing.
• 13M(business strategy) Expansion or growth.
• 14Over the next three years, do you expect this business to:?