Whether you acknowledge it or not, our competitors contribute to the detailed shape of our business.
If there were no competition, there would be no drive towards improvement. We can ensure longevity by gathering opposing insight with an updated competitive analysis.
Once you learn how to create a competitive analysis, you can actively grow by developing a more informed and effective marketing plan. Comprehending different players and their strategies in the industry helps you clearly see the competitive landscape, where your brand can shine, and what you need to do to be ranked over your competitors .
What is a Competitor Analysis?
A Competitor Analysis looks at the other participants within your industry. To yield the most accurate results, analyze the strategies used by your competition, as well as looking at the strengths and weaknesses of their operations in comparison to your own business. The idea behind completing this form of analysis is to properly be able to develop a go-to-market strategy and to stand out from the competition.
Benefits of Conducting a Competitor Analysis
Competitive research-a critical tactic-analyzes your competitors activities and the specific threat they have to the success of your company.
Once you’ve determined the trends and offers of your competitors, You will better understand the entire market. Furthermore, it can also help you figure out how your exact competitors may be, as this is not always clear on the surface.
Through your researching efforts, you can specifically pinpoint these businesses solid strategies while avoiding their demonstrated unfavorable attempts. An ideal part of the strategic planning process to move your business forward, it can further help you discover areas where you can position yourself to succeed.
Maximize your targeting effectiveness and strengthen your competitive edge with a better understanding of the market dynamic and setting yourself apart from the rest of the companies in your industry. This will provide the basis of your marketing strategy.
Finally, you will be able to identify potential upcoming trends that you can take advantage of when bringing your business to the next level and starting your marketing campaigns via social media outlets or other.
What Are The Steps To Writing A Competitor’s Analysis?
1. Set Your Analysis Goals
As a part of this analysis, you must already have goals in place thorough knowledge of your business . Key Performance Indicators (KPIs) are a powerful tool for your business to quantify the targets you want to reach.
You should also identify your top competition. A seemingly obvious yet crucial first step, begin by asking yourself: do you even know who are the top competitors in your industry?
If you’re selling products or services online, you’re likely to compete with tens or even hundreds of companies. These companies are all going after the same selection of “qualified leads”.
Whether you’re a local, national, or international enterprise, there is likely someone within your organization, probably in the sales or marketing team, who will be able to identify the leading competitors quickly. They are also likely to have insight into what differentiates these companies from yours. It is best to leverage their experience for these insights.
2. Researching your competitors
Researching your competitors in both an online and offline setting is essential. This allows you to see what they are doing, what their pricing is like, and understand certain aspects that you might implement into your own business.
Competitive analysis can significantly vary depending on the objectives of what you’re trying to learn. You may perform analysis around a specific area of business, such as competitor’s websites, or take a high-level look at their entire marketing approach.
As you collect the data on your competitors, strive to keep it organized. A spreadsheet or table can be easily updated and shared, making it easier to use the information you obtain. Within your document, take note of different criteria where you would like to compare and contrast. Areas include:
-The revenue and market share and other important financial ratios
-The way the company differentiates itself
-The needs and characteristics of their ideal client
-The size of the company and information about their management
-An overview of customer perception of the company
-A broad strengths and weaknesses description
Additionally, it is impossible to create a competitive analysis report without extensive market research. This involves gathering information to understand customers, identify growth opportunities, and recognizing industry trends.
This research will help you to create a profile of customer personas, which will influence your business and marketing decisions and assist you in planning for shifts that could disrupt the marketplace. Consider a SWOT analysis that will accompany this data set. This outlines Strengths, Weaknesses, Opportunities, and Threats around both your business and the competition. Defining these factors helps to take an objective look at your operation and can help you to make more informed, smarter choices to future proof your brand.
3. Data Analysis
Once you have gathered all of the relevant data on your competitors, it’s time to analyze it. Everything from their marketing strategy to financial figures and business locations will be included in this spreadsheet.
Categorize each company as a primary, secondary, or tertiary competitor. This helps to determine how they relate competitively to your business more effectively.
Your direct competitors are your primary competition. They sell a similar product or service to your target market. These are the brands your customers are likely to compare you to. For example, HULU and Netflix are each other’s primary competitors.
Secondary competition sells similar products but to a different audience. They may focus on the downmarket or upmarket with their products or services. Sticking with a television theme, for Netflix, Live sports streaming service would be a secondary competitor.
Tertiary competition is related to brands that market to a similar audience. However, they don’t directly compete with you or sell the same products. These could be competitors in the future if they choose to expand.
4. Understand Your Added Value
Finally, summarize the strengths and weaknesses of your own business and understand where you can improve; you should now have a clearer picture and crystal understanding of what your competitors are doing.
Identify personal key areas of competitive advantage and disadvantage. You should also review the competitive environment of your products or services.
Discuss and summarize the major issues and opportunities that face your company and that may require immediate action. Problems can include things such as: distribution coverage, market penetration, price revisions, cost reductions, and product line shortages.
Important tips that will help you to streamline this process:
Just like the rest of your crucial business tools, you will want to periodically update your analysis. As the market constantly changes competitors may go out of business or add new aspects to their offering that completely change the ball game. By staying up to date with the latest developments, you will be better positioned to react and take action when and as needed.
Leverage public companies’ liabilities: unlike private companies, public companies must file and share in public their financial reports, quarterly as well as annually. Favorably, you can take advantage of this data and find super relevant financial details for your analysis.
Ensure to narrow your focus when conducting this form of analysis as it’s easy to spend ages looking at every tiny detail of your competitor’s businesses. However, you want to be efficient with your time and only look at the areas that really matter when it comes to your business goals.
Set Action Items: If you’re going through the trouble and effort of a competitive analysis, you need to ensure that you act on the findings rather than allowing them to be buried in a folder, and forgotten about. Use the report findings to develop a strategic plan and execute the tactics and unique angles discovered throughout this process.
Speed Up the Process with the Right Tools: The countless available resources today simplify data collection and can be used for competitive analysis. This has made creating a highly accurate, top-notch comparison easier than ever. You don’t need to reinvent the wheel and make life hard for yourself. Use tools and speed up the process while gaining important insights, so you can quickly make informed business decisions.
One of the biggest mistakes made by businesses transpires in their assumptions and focus on themselves-rather than separating themselves from the competition.
With a constructive SWOT Analysis, you will have a valuable tool to reference as you encounter uncertainty in your business decisions-ensuring current and future success. However, a misled, outdated, or complete lack of a SWOT analysis blurs your company vision and leads to harmful mistakes. Furthermore, a relative competitive analysis reinforces your brand and its ultimate mission-only when done right.
Additionally, this valuable data will help you prepare and create a world-class investment/pitch deck for investors and similar groups.
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