Competitive Analysis is important for 4 compelling reasons
In this article, Competitive Analysis is important for 4 compelling reasons to you and your future. A Competitive Analysis exercise should be at the centre of any successful marketing and advertising strategy.
However, it’s incredibly common for companies to fail to do any Competitive Analysis or just give the exercise lip service and complete a couple of paragraphs to keep everyone happy. But a functional Competitive Analysis is not just confirming a hunch with a considerable dollop of cognitive bias scooped on top. Competitive Analysis will offer the answers to businesses hardest questions. Questions like:
- How competitive is the market landscape?
- Who are our actual customers?
- Is it risky to enter a particular market?
- How successful has our branding strategy been?
What is Competitive analysis?
Competitive analysis is a quantitative and qualitative examination of your external environment and the resources you have at your disposal. Thorough Competitive Analysis will give you a picture of the size and value of opportunities open to you, the risks involved, potential customer purchasing behaviour, the competition, and the known entry barriers. Here are 4 compelling reasons why Competitive Analysis is essential to you:
1. It provides you with a map
Competitive Analysis doesn’t let you know how to position your brand or how to run a marketing campaign. However, it does provide you with a route through the choppy waters, obstacles and barriers that could get in the way of getting to your destination, Without it, you could hit the rocks, and you will ultimately fail.
2. Puts the customers at the centre of your planning
Competitive analysis isolates your offering to make you design it for what your customers are buying it for. Not what you think why they are buying it. The following Theodore Levitt quote excellently sums the point up. “People don’t want to buy a quarter-inch drill; they want a quarter-inch hole.” Once you discover why a customer buys from you, then you will be onto a winner. In our business, we offer Market Intelligence, but we realise that our clients are appointing us to solve their problems. They don’t care how we do it; they just want answers and options.
3. Market Analysis also looks inward
Competitive Analysis can keep an ego in check. We hear this sort of thing a lot. “Why would I need Intelligence when I know everyone in the industry. What I don’t know is not worth knowing”. When you have built your product from scratch, and you live and breath it every day it is incredibly challenging to be genuinely objective. After all its cost you thousands, sleepless nights and it’s your baby. Competitive Analysis answers questions like “Why do consumers use us?” You will also find customers will not buy because of what you do, but why and how you do it. And you need to understand this yourself before expecting customers to.
4. What’s your USP?
A Competitive analysis exercise helps you to determine how to effectively differentiate yourself in your chosen market effectively.
- Product Intelligence – Some differentiate themselves by claiming to be as the highest quality product on the market. Others focus on ease of use, accessibility and availability. A BMW 5 series and a Renault Clio do the same thing, but they attract different customers.
- Brand – How does your brand differentiate you from the competition? Does your brand resonate with the consumers you want to attract? What’s the story about your brand?
In this article, we have defined 4 compelling reasons why Competitive Analysis is essential to you and your future business. Market analysis should be at the centre of any successful marketing and advertising strategy. To determine your entry point and your USP is very important if you want to create a sustainable business model.