No company operates in a vacuum. If you own a small business, your rivals are something you consider frequently. However, what should you focus on, and how should you use this information?
Competition analysis can be helpful in this situation. Any level of your organization should conduct one. You will identify rivals, examine their marketing strategies, and assess your brand’s advantages and disadvantages.
Before any important game, a good sports team researches their opposition. Each opponent will be the subject of research, game footage analysis, and scouting reports by coaches. A competition analysis is a tool for creating a game plan to help your business succeed, much like a scouting report does for a company.
What is a competitor analysis?
A competitive analysis, sometimes referred to as competitor analysis, is a technique for assessing how well your business and its goods or services are performing in contrast to other companies in your industry that offer goods or services that are similar to yours.
According to Petal CEO David Taffet, “a competitor analysis focuses on identifying market players positioned to intrude on your potential and differentiates each participant’s operational strengths, substantive deficiencies, product offers, market dominance, and missed chances.”
How competitor analysis helps you to grow your business?
The following ways that competitive analysis can help you improve your business:
Determine your strengths and weaknesses.
Knowing where you stand apart from the competition allows you to focus your marketing message on that area. Understanding where you fall short can help you improve your goods, services, and customer support to surpass your rivals.
Recognize your place in the market.
Many of your competitors are known to you, but you won’t know them all at once, and you might not be aware of the newest market entrants. The key to defeating them is to recognise your main rivals (as well as any prospective threats) and how they vary from your business.
Analyze the trends in your sector.
Which rivals are launching new or improved goods, services, or features to obtain an advantage? What patterns do they see that you don’t? By looking at their routines and behaviors, you may assess whether other businesses in your industry have taken the right course and whether you should compete with them.
Make preparations for future growth.
Instead of being the fourth-largest company in your sector, would you prefer to be the third? The information you need is provided by competitive analysis, including how much more you must sell, market demographics, and potential skill shortages your organization may have.
How to do a competitor analysis?
Choosing what to concentrate on when conducting a competitive analysis might be challenging. To get you started, follow these six steps before you start, think about what you hope to achieve from your competitor analysis. Include any additional fields of study that are relevant to these goals.
Research the competition
When making a list of possible rivals, consider where your clients may go if they decide not to purchase from your company. Start by typing the name of your item or its category into Google or another search engine, then look through the results. You can also survey or speak with them to learn what options existing consumers consider before selecting your product or service.
Create a matrix of your competitors.
Before analyzing your competitors, take a moment to gather your thoughts. You can organize your research using a table or spreadsheet called a competitor matrix, often known as a competitor grid. You’ll be able to do this to compare your data to that of rivals and spot more significant trends.
Start by giving each recognised competitor a row or column. On the polar axis, provide the data points or categories of information you want to know about each competitor. If you’re not sure what to peek for right now, don’t worry. As your research develops, more categories can always be added.
Assemble background data
Once you’ve compiled a list of your competitors, you can start researching their businesses. Work your way up from the most fundamental knowledge by beginning there. Start by looking at the company’s websites, social media profiles, and any news articles written about them.
Determine who your competitors’ ideal customers are.
A business cannot exist without customers. You can learn much about your competitors’ businesses by finding out who they sell to. To determine who a company’s ideal clients are:
- See if you can find their assignment statement.
- Look at the language they use.
- Observe who they interact with on social media.
- Verify if any current customers are mentioned in the article.
Use this information to build a profile of the customers your rivals are trying to attract with their offerings. Since these clients are your competition, their characteristics are likely to reflect those of your target clients, so pay attention to any differences, no matter how small.
Pay attention to the four Ps.
Now that you know each rival’s ideal customer, look into how they approach that market segment. This will require a careful analysis of their marketing strategies.
The four Ps (product, pricing, promotion, and place), also referred to as the marketing mix, are the key elements of bringing a product to market. Ask yourself the following questions for each rival you’ve decided to research.
Examine the advantages and disadvantages of both you and your rivals.
Using your acquired data, consider each of your competitors’ advantages and disadvantages. Consider why consumers choose a particular company’s product or service over the alternatives. Note your conclusions in your spreadsheet.
Finally, consider the advantages and disadvantages of your own business. How does your business stack up against the rivals you looked into? You may better serve your target clients by knowing what sets your business apart from the competition and where it falls short of expectations.
Wrapping Up
Analyzing competitors is a critical component of marketing. A corporation might not know which channels to target or which strategy will help them generate conversions without conducting a competitive analysis.
Utilize the advice above to find, monitor, and better comprehend your rivals so you can quickly move about your industry.
