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Businesses in a completely different sector could still be important competition.
The extent to which you need to worry about indirect competition depends on the nature of your customer base. If you’re selling food staples, for example, then you are principally competing only with other suppliers of very similar products.
However, if you sell fine wines you’re certainly not just competing against other wine sellers – you’re targeting the customer’s disposable income, so you’re competing with all the myriad of other ways in which that customer could possibly spend the same money, such as on eating out, buying jewellery or even investing. So be careful not to take a narrow vision when it comes to competition.
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