What is competitive analysis?
Competitive analysis is the process of evaluating the competition and its products. This can be a major part of a business’ marketing plan. By analysing the competition and the products that it offers, a business owner will be able to find their own unique selling point and how to target consumers in a way their competition cannot. There are many ways in which a business can conduct competitive analysis. One method is using the competitive grid. Business owners can also ask themselves the following questions:
- Who are your competitors?
- What products or services do they sell?
- What is each competitor’s market share?
- What are their past strategies?
- What are their current strategies?
- What type of media is used to market their products or services?
- How many hours per week do they purchase to advertise through the media used in this market?
- What are each competitor’s strengths and weaknesses?
- What potential threats do your competitors pose?
- What potential opportunities do they make available to you?
How to identify competition
Being able to identify competition is a major key for businesses. Competition can be other businesses that operate in the same industry and sell similar products. However, competition is not limited to the same industry. Businesses can have competition based on location, even though the products and services may be different.
Direct competition
Same products/services
Same audience
Similar prices
Indirect competition
Alternative products /services
Audience with the same goals
Comparative prices
How to conduct business research
There are many ways to conduct business research. Businesses can simply visit the location of their competition and observe how it interacts with its consumers. However, this method could be time consuming and the results of it might not be accurate. Business owners can use other metrics to research their competition. They can use competition grids that will require them to list and chart their competition’s information.
Gather Competitive Information
In terms of gathering information about their competition, businesses have several options. One of the best places to get information on the competition is from them directly. Using social media and the internet, it has become easier to monitor competitors’ activities. Competitors will list their products with their descriptions and prices directly on their website. Although this method won’t give you details of the competition’s suppliers and costs, it does provide a starting point for gathering further information.
Analyze Competitive Information
Once the information has been gathered, a report on a business’ competition can be compiled. Analyzing the information can be tricky as some of it will be subjective. The best way to analyze a company is by breaking it down and inspecting all of its components, from its structure and activities to its financials. Using the information gathered during your research, simple but powerful assumptions can be made about competitors.
Determine Your Own Competitive Position
After making assumptions about your competition based on the research you conducted, you can now determine your own competitive position. Businesses can compare their products/services and pricing to their competitors to see where they may have an advantage.
