The article explains how to do Competitor analysis and introduces you to it’s benefits. The article explains it’s usages and helps find out who your main competitors are—their niche, strengths and weaknesses. Do you know how many competitors are looking at your target customers? How are they approaching them, delivering their offering, and what are they selling? Devise great questions. Answering them will assist you in building your competitive strategy. And in turn, eventually, strengthen your business.
Who are your competitors?
The first thing to do with Competitive Analysis is to work out who your competitors are. Who are the major players serving your market? Any idea what’s the market split up between them? Broadly speaking, there are two types of competitors. Firstly, those who sell similar products and services to you. Then those who have a different offering but your customers could use them to solve the same problem your offering solves for them. Now define and list of your:
- Key competitors
- Next best competitors
- Newcomers and those companies who could enter the market but are haven’t done so yet.
This analysis will allow you to develop a competitor monitoring strategy without been drowned by data. By conducting Competitor Analysis, you will begin to identify your rivals’ strengths and weaknesses. And the more you know about them the more you will be able to revise your list. And the ones who are the biggest threat to you will become obvious.
Your key competitors
Your key most concerning competitors will have a good business model. They will have happy customers, will have a good reputation and will be making a profit. Are you sure? They are achieving everything you want from your business, and they appear everywhere within your market sector.
Now if they are doing as well as they appear to be then looking at what they are doing (and going to do) could allow you to take some of their best bits and use them in your own business. But again are they doing as well as you think they are? Pointless looking for their strengths and weaknesses if it’s just all smoke and mirrors.
Determine what they do better than you
This situation is where Competitor Analysis comes in. With an open mind, determine what they are doing better than you, what is their sales and marketing strategies and what is so good (or bad) about it. Are they doing anything at a tactical level that you can take advantage of?
What are you doing better than your competitor? What errors have they made and what can you do to avoid making the same mistake? Once you answer these and other questions, you will be able to feed the analysis into your own competitive strategy.
Definition: How to do Competitive Analysis
How to do Competitive Analysis – Identify your current competitors. Not only just current competitors but future competitors too. Look at them from a customer’s point of view, then look at how they see themselves and how they compare to your company. Analyse their significant strengths and weaknesses.
Now it should be time to dig a little deeper with questions like:
- What does your market think about your competitors?
- What’s the product or service look and feel?
- How does it work?
- What experience does the customer receive?
- Do they compete on price, are they catering for a younger or older market than you or are they basing their offering on quality?
- How are they delivering their service or product?
- What do they charge and how can a customer buy the product or service?
- How are their online reviews looking?
- What’s their brand awareness like? Are they trusted?
- Also, look at patents and licenses. Are they the only ones able to manufacture and sell a particular product?
- Do they have exclusive supply arrangements? Are they national, regional or international agreements?
- Do they work, sell manufacturer or distribute differently to you?
- Can they deliver their products or services cheaper than you?
When answering these questions, keep in mind how you will answer the questions about your own company. How could you differentiate your self from these competitors? What does your competitor think of you? What can you do what your competitor can’t?
Barriers to entry
The higher the barrier to entry, the more demanding it is for competitors to replicate what you do. So it is important that you can determine how difficult would it be for someone new to set up shop and start selling something new to your customers? How easy would it be for a larger and more established business to change their offering and suddenly become a significant pain in the backside? How about a merger between two of your competitors? How will that affect you and what can you do about it?
Start your competitor analysis today
Competitor analysis is important for your business planning. It is also vital for your product development, service offering, sales and marketing. So an open and honest review of your competitive landscape can help you find a niche within a market you can own.
The article explained how to do Competitor analysis, including the benefits of Competitor Analysis and usages. We suggested finding out who your main competitors are—their niche, strengths and weaknesses. Competitor Analysis is an excellent way to ascertain where you in your market sector.