The five things customers compare: each one cuts both ways

1. A rival is strong or weak only on the things its customers actually notice, and Edexcel names five of them.
2. Each of the five can be a strength or a weakness depending on the rival you hold it against, so never label a feature good or bad on its own.
   1. Price: a low price pulls price-sensitive shoppers away from a rival, but it signals lower quality to some buyers and leaves a thin margin on every sale.
   2. Quality: high quality supports a higher price and brings customers back, but better materials and skilled staff cost more, and the price that follows narrows the product to buyers who can afford it.
   3. Location: a unit on a busy high street brings passing trade the rival never has to advertise for, but the rent can be several times that of a side street, so those extra sales have to cover it.
   4. Product range: a wide range suits more types of customer but ties up cash in stock that may not sell, while a narrow range is cheaper to hold and sends some customers elsewhere.
   5. Customer service: staff who know the product and remember regulars build loyalty, but they have to be trained and paid enough to stay, which raises costs every week.
3. Which of the five decides the sale depends on the customer, so a shopper on a tight budget forgives a narrow range while a shopper buying a gift will not forgive slow service.

Finding out about a rival: four sources a small business can actually use

1. Guesswork about a rival is worth nothing in an exam answer or in a real business, so gather evidence from four places.
   1. Visit the rival: go in as a customer and record how busy it is, how long the queue takes and how the staff deal with you.
   2. Check its prices and its website: write down what it charges for the products you also sell, then read the site for opening hours, delivery times and the full range it lists.
   3. Read its online reviews: reviews name the weakness in the customer's own words, such as cold food or empty shelves, which is exactly what the rival will never advertise.
   4. Listen to your own customers: people who have used both will tell you why they came to you this time, and why they sometimes do not.
2. All four are cheap or free, but each is partial, because one visit shows one day and online reviews are written mostly by the very pleased and the very annoyed.

Why it matters: where you can win and where not to fight

1. A rival's weakness is a gap you can fill, because the customers it disappoints are already nearby and already spending money on this type of product.
2. A new sandwich shop opening near Greggs cannot win on price, because Greggs sells cheap hot food in high volume and buys its ingredients far more cheaply, so matching those prices would leave almost nothing on each sale.
3. The same shop can win on what Greggs does not offer, such as fillings made to order and staff who know the regulars, so a weakness in the rival becomes the reason a customer walks past it.
4. Knowing where a rival is strong is worth as much as knowing where it is weak, because it tells you which fight would cost more than it could ever earn back.
5. Strengths and weaknesses shift as rivals react, so a judgement made a year ago can point you at a gap that has already closed.