Sample Competitive Analysis
Adapted from content excerpted from the American Express® OPEN Small Business Network
The competition for high-end camera sales comes mainly from other independent photo equipment dealers. Several larger general merchandise chains also offer 35-mm cameras, but we do not see them as our direct competitors, since they provide neither the expertise, service, nor complete product selection that East End Camera and other specialty retailers can. The competition for film developing is much broader, and includes: other photography stores, 60-minute photo processing franchises, mass merchants, drug stores, variety stores, news stands, and supermarkets.
East End Camera, A Photography Store
East End Camera is a new photography store opening in the burgeoning East End section of Anytown. It will offer a full range of amateur and professional camera equipment and accessories, have an extensive photo finishing department, and offer digital imaging services. This is its analysis of other camera stores and photo finishers in the Anytown region. There are 17 "photographic equipment and supplies" dealers and 78 "photo finishing" companies listed in the Anytown Yellow Pages, which covers downtown and 14 surrounding towns. Approximately 15 percent of these shops are located within a 5-mile radius of East End Camera. The closest competitors to East End Camera are Williams Photo, a camera dealer, and Zyplex 60-Minute Film Developing, a while-you-wait photo finishing franchise, each located less than 1/4 mile from East End Camera. Neither offers the combination of quality, service, broad product line, and affordable prices that East End Camera will. We also will be the only photography store in our region to provide full digital imaging workstations that can be rented by the hour, although we understand Arnold's Camera in the University District (10 miles away) plans a similar set-up. In terms of photo finishing, we had a professional photographer take several rolls of color film to area stores and evaluate the quality of their prints. Here is a brief synopsis of the results:
- Zyplex 60-Minute Film Developing - Photos were done in under 1 hour. Film can be dropped off and picked up from drive-through window. Color matching was weak and colors looked washed out. Several photos were cut incorrectly. Does not use name-brand paper.
- Williams Photo - Film developing took overnight. Prices and quality comparable to East End Camera's custom labs. ₱3 charge for a second set of prints.
- Pridetown Drugs - Film dropped off by 10 a.m. available after 3 p.m. Offers lowest prices, but quality of prints is poor - colors are muddy. Only 3.5" x 5" prints available.
- Bigelow Photo & Copy - Uses automated film developing system similar to Zyplex. Prints promised in 60 minutes were not ready 2 hours later. Quality is good, but does not use name-brand paper. Lost film of customer ahead of us on line.
East End Camera intends to offer same-day or overnight service for all film developing through our in-house custom lab. We will use only Kodak paper and chemicals. While our prices will be slightly higher than film developing franchises, we will provide both higher quality and a free second set of prints. Plus, we intend to offer an unconditional money-back guarantee for any print that does not satisfy the customer. The photo equipment market in Anytown is fragmented. Each camera store operates in isolation, and no single shop has enough market share, resources, or influence to react strongly to new entrants.
There is a certain amount of price competition at the low end of the market, driven by Wil-Shoot Photo's heavy advertising campaign. East End Camera sees this segment of the market as a loss leader, and we plan to meet our competitors' advertised prices in order to create long-term, loyal customers. Moreover, Wil-Shoot does not offer higher-end equipment that requires greater service (and has higher margins); this will be East End Camera's "bread-and-butter." Other high-end camera dealers include:
- Williams Camera - The 40-year old store recently changed owners and is no longer operated by the Williams family. Customers report that the new management is particularly weak in the area of customer service, and the store seems to be shifting its emphasis from high-end to high-volume sales. In fact, Williams Camera recently lost its authorization to sell certain professional-level cameras.
- The Shutterbug - Probably the most complete camera store in the Anytown region, The Shutterbug caters to both professionals and amateur photo enthusiasts alike. In fact, East End's partners modeled their concept on The Shutterbug's mix of quality, selection, and competitive price. Since this store is located in Anytown's West End region, it does not draw many customers from the developing East End. We believe East End Photo will fill this need in this neighborhood.
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