How to beat your competition with robust competitor analysis
This article asks how to beat your competition with robust competitor analysis. To develop an effective competitive strategy, you need a realistic assessment of your competitors, strengths and weaknesses as viewed by the market.
You need to ask:
- What does each of your competitors do that is better than your own company?
- What places are they weak or worse than your company?
Create a clear picture
Slowly, you will build a clear picture of your position. And also, determine if you are a market leader, one of several followers or new to the marketplace. Once you’ve identified and analysed the competition and understand your position, you’re ready to do something about it. So next steps could include:
- Identify and discuss the main aspects of competitive advantage and disadvantage
- Review your competitive environment
- Look for similar and substitute products or services
- Summarise the significant problems and opportunities facing your firm which may require action
Take the following into account:
- Types of market penetration
- Distribution coverage
- Product line needs
- Price revisions
- Cost reductions or increases
- Market segmentation
Integrate your competitor analysis with demographic market analysis to design and implement a quality marketing strategy to strengthen your market position.
Now that you understand your position and how can you limit and control the competition. Market segmentation further allows you to focus your attempts to limit and control the competition on a smaller target.
There are many strategies a business can employ in a competitive environment, from price to new packaging or improving customer service to new product development. But to beat the competition, you must first know the competition. And the only way to do this is by analysis.
So once you’ve gathered all of the competitive information you’ve been able to find, it’s time to analyse. It would be best to assess product information, market share marketing strategies, and isolate your competitors’ strengths and weaknesses.
Then there’s product evaluation. Determine what features and benefits of your products are most important to your prospects and current customers.
A product’s “features” competitive position is mainly determined by how well it is differentiated from its competitors and, yes, price.
Make a list of your competitors’ product features and benefits in order of priority. Indicate which competitors have what features and benefits. Prepare a grid to show whether or not each of your competitors possesses them.
Features can be straightforward. Either a product has them, or it doesn’t. Benefits are much more subjective. And the most critical opinion must be that of current or potential customers.
Compare to yours
Now determine how own your product compares to your closest competitors. And what features and benefits are unique to your product compared to theirs? Usually, the more unique features and benefits your product has, the stronger your market position.
The next aspect to look at is pricing. Unless you have isolated clear benefits to your customers, if your price for a similar product or service is higher than the competition, you’re going to have a struggling market position. And if it’s lower than the competition, you may have a better product position.
Also, look for trends in pricing rather than momentary rises, and false customer preferences for products or services are just one part of the picture.
Some other things that you need to consider include:
- Do your competitors have the financial resources to withstand any significant financial setbacks?
- Do they have enough money in the bank to sustain a pricing cutting exercise? How long for? Would they do it?
- How are they currently funding new product development and improvement?
- How do they save time and cost with intelligent production and delivery techniques?
- What relationships do they have with other companies regarding product development, promotion or add on sales
- How’s their morale and staff retention levels?
- What is their employee motivation, commitment and productivity levels?
Market share is a commonly used performance indicator. A competitor may not offer the best product or service, But if they have a significant market share, they may control the standards for their products or services. Devote substantial resources to maintain market share. And influence the popular perception of the product or service.
To determine your company’s market share on a percentage basis, use the formula current market share equals company’s sales divided by industry sales. Then calculate the same for each of your competitors. Look to you determine what your competitors market objectives are and the strategies they’re using to achieve to:
- Maintain or increase their market share to maximise short term or long term profits
- Introduce technology to improve their products and change your market
- Establish themselves as market leaders to protect their market share under attack by solid competition
- Develop new markets for their existing products
So, once you’ve identified the objectives your competitors want to achieve, you need to see what strategies are put in place to maximise their success. Ask how you can counteract some of the strategies they may be used to reduce their prices, marketing, and advertising strategies.
And finally, how to beat your competition with robust competitor analysis
This article asked how to beat your competition with robust competitor analysis. To develop an effective competitive strategy, you need a realistic assessment of your competitors, strengths and weaknesses as viewed by the market. And to beat the competition, you must first know the competition.
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