Direct Competition

Direct competition occurs when two or more businesses offer the same product or service and are competing for the same customers. For example, McDonald’s and Wendy’s are direct competitors because the both offer a fast-food burger. Zoe’s Kitchen would not be a direct competitor to McDonald’s or Wendy’s because they offer fast-casual Mediterranean food. They would be an indirect competitor because they are also in the food service industry, but they are not competing for the fast-food burger customer. Understanding market share among direct competitors is key when developing and executing a marketing plan.