Competitor analysis is more important than ever
In today’s competitive business world, staying ahead of the curve and knowing your competitors’ strategies is critical. You must perform an in-depth competitor analysis to respond appropriately and get on the front foot.
Are they watching you?
If not proactively managed, one of your competitors may launch a similar product to the one your R&D Department was working on just before you did. Another competitor may apply deep discounts the same week you planned to increase your prices. Any such actions by your competitors can and will go a long way towards negatively affecting your market share and brand image.
Now, unless you believe that coincidences are just that and fairies live at the bottom of your garden, it also shows that it is probable that they are conducting competitive intelligence against you.
To address such risks, companies need to consider not only their own strategic priorities and the voice of their customers but also what their competitors plan, develop and offer to the market.
This is compounded by the media and markets obession with the word “recession” which is to quote Lawrence Fulliers 2023 outlook “There is an obsession with recession and sentiment is at abysmal levels. This is blinding most to the fact that the foundation of this recovery and expansion is extremely strong because it was built from the bottom up”. You need to know whats happening, why and what you can do about it.
Competitor analysis is critical in ensuring you have a complete picture of their strategic and tactical investments. Most companies believe competitor analysis is important in business development, and many businesses believe competitor intelligence is important for new product launches and R&D planning and execution.
Use it or lose it
Unfortunately, most companies that do competitor research perform such activities only on an ad-hoc basis and do not follow a structured process or plan. What’s worse, such research often gets lost on the desktop of a few specialists and never sees daylight again. Or they use competitive intelligence software and forget to access it.
Practical competitive intelligence with high ROI requires the proper focus and utilisation, which comes with good planning and dedication. How? The obvious, but not so commonly covered, the first step in competitive intelligence is the identification of competitors.
New kids on the block
Unfortunately, most companies assume only their usual rivals create competitive risks and fail to recognise a potential up-and-comer or a complete newcomer until it is too late. For example, Xerox failed to recognise Canon as a potential threat before entering its market. US automotive makers considered Honda only a motorcycle manufacturer and did not consider it a future competitor. Apple stole a march on Sony and their Walkman developments. Nokia and Blackberry failed to anticipate competitor moves. Will Tesco and Sainsbury’s allow Amazon to take their market? Unlikely, but never say never.
Identification of current and new competitors requires the ability to foresee who might enter the market and who has substitute offerings stealing market share from them. Once the current and potential competitor list is defined, companies should set up monitoring to regularly follow news and gather insight about their competitors and markets. But remember, monitoring is not competitive intelligence or competitor analysis. Competitive intelligence and all its subplots, of which competitor analysis is one, is so much more than collecting all the news on them you can find.
Turn a pile of stuff into something useful
When reviewing news and all the other stuff you have collected, ask:
- What does it mean?
- So what?
- How is it going to affect me?
- What should we do about it? (if anything)
And what the massive database companies will not usually tell you is that you will be swamped by news and views if you are following a company like Apple or Morgan Stanley and the like. And most of it will be repetitive and boring. Equally, you will be disappointed if you expect the same content from mid-tier to SME businesses.
There’s nothing wrong with these databases, but they are built for private and institutional investors. And you can bet your bottom dollar the company you want to monitor will lack valuable data. That’s why people use competitive intelligence companies like ours to go and find insight.
Competitor analysis is more important than ever
In conclusion, the competitive market is ever-changing, and companies must remain vigilant in their research and development processes. They must be aware of new product launches, discounts, and changes in the market. By having a comprehensive competitor analysis, companies can identify potential issues, address them swiftly and make decisions that help ensure they are staying one step ahead of the competition. Launching a similar product by a competitor with an additional discount makes it difficult for any company to keep up.