If you are into a business, there are bright chances that even your competitors are aggressively marketing the same kind of products. If you really want to achieve the best results in gaining a better competitive advantage, a thorough analysis of the business strategies used by your competitor would be the prime option.
This is what is called Competitive Analysis- analyzing the strategies used by your direct competitors. How you conduct your competitive analysis is what would help you achieve an excellent competitive advantage. Instead of knowing just what they have been into, it is quite essential to understand how they are doing it.
In this article, let us understand what competitive analysis, why we need to indulge in competitor analysis, its benefits and also check out a few examples.
What is Competitive Analysis?
Before we can check out how to conduct a competitive analysis, it would be essential to understand what exactly is Competitive Analysis.
The concept of Competitive Analysis is a marketing strategy where you would analyze the products and services offered by your major competitors and conduct research into their products. You will have analysis into their sales and marketing strategies to understand what they offer and how you can implement the strategy to beat them in gaining a competitive advantage.
Analyze the strengths and weaknesses of your competitors and formulae the policies that can be helpful in bettering it further – that is precisely what would be what competitive analysis is all about.
Why do you need to opt for Competitive Analysis?
Well, there are several reasons you should opt for Competitive Analysis. It would help you get access to the best industry trends and thus help you out-compete your rivals.
It can be quite helpful in arriving at the best business and marketing strategies. You have something to compare your strategies with. You already have a yardstick that you want to better by implementing the best strategies.
Some of the advantages offered by the use of competitive analysis would include –
- You will be able to identify the best industry trends.
- Arrive at the perfect pricing strategies
- You will be able to create benchmarks for your business needs.
- You would also be able to detect gaps in the market and try filling them up.
Do remember that a Competitive analysis is not limited to the newer industries alone. No matter how veteran you may be in the industry, constant analysis of the competitor strategies would make it one of the much-preferred options.
The competitive analysis can be a great way to assist you in identifying the gaps in the market and taking action to reap the benefits from the newer trends. It can be an excellent option to help you launch new products and services.
In essence, a meticulously done Competitive analysis can be assistive in learning the new trends and marketing or selling your products more effectively.
How to do a Competitive Analysis?
Well, a practical competitive analysis involves several steps and procedures. A complete follow up of each of those steps will involve you achieve the best results.
Here are the best strategies you need to follow with respect to Competitive Analysis.
1. Find who your competitors are
List out the best competitors you may have. You will be able to compare the data much accurately. What works for your competitor may not necessarily the right option for your brand under all conditions.
You should focus on your Direct Competitors. In fact, the direct competitors are whom you need to be focussed on. They sell the same products and services as you do. It may also be possible that they are operating their business in the same geographical area that you are into.
The Indirect competitors are those who may not offer the same products. Still, they may be offering something that would appeal to similar customer needs and solve some (if not all) issues you are attempting to resolve.
The right competitor would be the one that meets the following conditions –
- Sells the same products and services as you do.
- Serves the same geological area.
- It is catering to the same or similar audience.
Please note that the trends will keep changing, and it is essential to check if you have been following the trends accurately. Your competitors may change to a considerable extent.
It would be a good idea to check out the possibility of finding a minimum of 7 to 10 competitors. This would be ideally a great option to assist you to consider the improvements over a broader spectrum. The best way to search for your competitor – direct or indirect – would be to start your searches with services such as Google, Alexa, and Amazon.
2. Collect the Data
The right type of data collection assumes a lot of essences when it comes to conduction a complete competitor analysis. You can create a data collection sheet with the following details –
- The products
- Their pricing
- Basic product features
- Social media integration
3.Compare the products from different competitors
You should analyze the entire product line up of your competitor. You can also check out the pricing options and other benefits (such as discounts and offers).
Give enough consideration to whether they provide access to a high priced or low priced product. Check out their market share and have a comparison across different markets. Yet another worthy consideration would be to check what kind of customers do they attract.
Your competitors may be using different strategies for online and offline purchases. The distribution network utilized by the competition would also be one of the essential aspects one needs to give a thought to.
Like we stated above, make sure you have conducted a complete analysis of your competitors.
- Primary or Direct Competitors – These are whom you should focus on when designing or creating your market analysis initiatives. Your customers can get influenced by their strategies and love for them. For example, Samsung and Nokia are direct competitors.
- Secondary or Secondary Competitors – They sell similar products and services to a different audience.
There may be other brands that may be considered tertiary or quaternary. They may not be affecting you directly, but analyzing them and working with them can be a good option.
4. How do they market their products?
The marketing efforts from your competitor would be best analyzed through the websites. Almost every business comes with a website these days.
If they have a blog, check it out and analyze how they are using it for a better degree to achieve more positive results in improving the market share. The use of featured articles, social shares, and FAQs are a few critical factors that would mean a lot.
5. Find the Social media Integration
Social media integration has become one of the great options these days in achieving the perfect sustainability of your business. Each of the businesses is using social media platforms differently and check how it works with your competitor.
Finding how your competitor is using social media profiles and how they are integrating it with their marketing strategy is much essential. Check the frequency of their posts, and keep an eye on the performance of those posts. Have a complete analysis con what kind of visitors are they attracting.
They would be much helpful in helping you arrive at the best strategies in your own social marketing strategy. imIn fact, even when the concerned competitor is not a direct competitor for your business, you can borrow a few ideas that may be helpful in improving and enhancing your own strategies for better marketing.
6. Check out the content marketing strategy of your competitor
If your competitor ahs blogs, the next option would be to check the content strategy that they have applied. How many blog posts r white papers do they have? What frequency are they coming up with the new content?
Analyzing the frequency of the content can be one of the best options that would be helpful in more ways than one. In case they have plenty of content, it can be helpful in analyzing the lead generation strategies that they may have.
7. Perform a SWOT Analysis
A SWOT Analysis can be one of the excellent options in arriving at the best possible results in understanding the Strengths, Weaknesses, Opportunities, and Threats in a more positive manner.
Go through each of the categories viz blogs, websites, social media presence and other details that you have gone through so far. Analyze each of them and arrive at the SWOT analysis for each of them.
The analysis can be carried out in multiple areas –
- What are the channels and areas that your competitors are excelling in? These would include the study of blogs, podcasts, publications, ads, and social media posts.
- What are the areas that your competitor has the edge over you?
- Which area are they weakest in?
- Where can the brand do better? You can use this knowledge to improve your performance.
- Which areas do you think your competitor is your threat?
The primary essence of a SWOT analysis would be to compare their weaknesses against your strengths and your weaknesses with their strengths. That way, you will end up with an excellent option to better your competitors and gain a substantial competitive advantage.
8. Detect the areas for improvement
The performance of the competitive analysis you worked on will decide your future course of action. This would better provide you with a better idea of what your competitors are doing and what you are lacking.
Based on the Analysis you have carried about in the previous steps, you can now find access to the areas that actually need improvement. You should be able to detect the areas that you need to work on and how to apply the newer strategies to attain a competitive advantage on the other players in your industry.
In addition to applying a few changes that so far had been lacking, you can learn a few wiser things form your competitor. This would be an excellent option to achieve the best results.
Things to avoid in a Competition Analysis
While competition analysis is what would help you achieve the best standards in terms of beating your competitors and gaining a competitive advantage over them. But, do note that there a few key areas that you need to focus on when opting for competitive analysis.
Make sure you avoid the following mistakes when you choose to undertake an efficient and effective Competitive analysis.
Competitive analysis is not what you would do once and forget
Competitive analysis is an ongoing process. Given the continuing nature of changes, you should get involved in these analyses quite frequently and at regular intervals. Keep an eye on the competitive analysis and keep yourself abreast.
If you believe you would do it once and forget it, such a competitive analysis would not be of use.
Data is much essential – lack of it can be an issue
Information is a vital element for any competitive analysis. If you are collecting the data and do not use them, there is no meaning to your exercise. Create a plan designed around your data and execute different plans to analyze your competitors. That can help you get access to improved performance.
Never start without a direction
A directionless action may not be something we would recommend. Unless you have a clear understanding and objective of what you are trying to do, you would not be able to achieve the right options. Define a goal and arrive at the best results. That would be essential to design your future plans accordingly.
Competitive analysis is one of the strongest points in favor of improving or enhancing your business. In fact, competitive analysis is what would provide you with access to an enhanced business edge for your marketing needs. Collect your data with a better degree of analysis and arrive at the best options available for your requirements.
Competitive analysis can provide you with access to an improved understanding of the market. That can be one of the best alternatives to help you stay ahead of your competitors and perhaps, borrow something from them.