10 Questions to Ask When Writing a Business Plan Competitive Analysis

9. How Are Your Competitors' Products and Services Priced?

Pricing is a key component of a competitive analysis, because you can't formulate your own pricing strategy unless you know and understand those of your competitors.

When it comes to strategy, companies can compete in the marketplace based on price, quality, or a combination of both. When competing on price, bear in mind that if your primary competitor has positioned itself as the low-cost provider, then trying to undercut them may shrink your margins to the point that you actually lose money on each sale. But if your competitor positions itself as the high-quality, high-cost provider, you could gain market share by providing products at slightly lower quality, but also lower cost, to appeal to more cost-conscious customers.