What is a direct competitor?

A direct competitor is defined as a business that offers a similar product or service and targets the same audience as another business. This means that both companies are vying for the same customers and their offerings fulfill the same needs or desires. For example, if two companies sell athletic shoes, they are considered direct competitors because they provide similar products to a similar customer base interested in sporting goods.

This understanding is essential in competitive analysis, as it helps businesses identify who they are competing against, understand market positioning, and strategize accordingly. Companies must consider their direct competitors to differentiate their products and find unique selling propositions that will attract customers away from their competitors.

In contrast, the other options describe businesses with varying degrees of indirect competition or no competition at all, as they either focus on dissimilar products, target different audience segments, or operate in entirely different market areas.