Potential franchisees are often instructed to do market analysis to determine which system is the best match for them. But once an individual has chosen a franchise, that does not mean he or she should stop hitting the books. Part of being a successful franchisee requires thorough understanding of one's competitors - identifying the similarities and differences between their products or services and one's own offerings will help franchisees create a plan to compete for success.

According to FranchiseKnowHow.com, there are several basic things every franchisee should know about his or her competitors, ranging from financial information to marketing campaigns and internal operations. A few of the items, such as where competitors are located, what products or services they offer, their pricing schemes, estimated revenues and how they advertise are fairly concrete facts and easy to determine, especially with the burgeoning capabilities of the Internet. However, discerning a competitor's perceived strengths and weaknesses may be a bit more difficult.

Which Franchise recommends undertaking a SWOT analysis - an acronym for strengths, weaknesses, opportunities and threats. When beginning to research each of these items, the Web site suggests keeping in mind four questions: "How can we use each strength? How can we stop each weakness? How can we exploit each opportunity? How can we defend against each threat?"

Determining the strengths of a competitor's operation entails doing the same analysis a franchisee would conduct on his or her own unit. Strengths include the caliber of a unit's sales team, the brand name, the quality of support team, how cost effective a product or service is versus the rest of the market, customer service rankings and the usability and appeal of a system's Web site. Weaknesses consider the same internal factors - they are simply the areas in which a company or franchise unit could improve.

After identifying a competitor's strengths and weaknesses, a franchisee can develop a plan to exploit them, in conjunction with market opportunities and changes in technology, legislation, the economy and demographics. For example, a competitor may be slow to adapt to new software that could greatly improve operational speed and service or may be unable to capitalize on a new, younger market.

These same opportunities may actually pose a threat to a franchisee's own operation, so staying on top of new advancements is absolutely essential, the Web site writes. The same technology that could help a franchise could eventually render it obsolete and economic fluctuations could create budgetary issues or even affect marketing campaigns.

Identifying these factors will ensure that potential franchisees are well-prepared to come up against direct business competitors and external influences to compete at the highest level.

The Liberty Tax Service franchise opportunity is #9 on the fastest growing franchises list of the 2010 Entrepreneur “Franchise 500.” Our tax franchise is an affordable and viable business choice. Each office provides thorough, computerized tax preparation coupled with superior customer service. For the best small business opportunity in the income tax franchise industry, choose Liberty!