BUSINESS
How to do a competitive analysis
How to do a competitive analysis
- Introduction to competitive analysis
- Definition of competitive analysis
Competitive analysis is a crucial process that helps businesses gain a deeper understanding of their industry landscape and identify opportunities for growth and improvement. It involves systematically evaluating competitors’ strengths and weaknesses to discover valuable insights for strategic decision-making.
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Importance of competitive analysis in business
Competitive analysis is a cornerstone of successful business planning. It allows companies to anticipate market trends, identify gaps in their offerings, and assess their position against competitors. By gathering actionable data, businesses can craft informed strategies that enable them to outperform rivals.
Ii. Identifying competitors
- Direct competitors
- Definition of direct competitors
Direct competitors are companies that offer similar products or services, target the same customer base, and operate within the same market space. They are the most apparent threats to your business’s success.
- How to identify direct competitors
To identify direct competitors, start by defining your unique selling proposition (USP) and target audience. Conduct market research, keyword analysis, and monitor industry trends to discover businesses vying for the same market share.
- Indirect competitors
- Definition of indirect competitors
Indirect competitors are businesses that offer substitute or complementary products or services, targeting a slightly different market segment but still competing for customers’ attention and spending.
- How to identify indirect competitors
Identify indirect competitors by broadening your scope during market research. Look for products or services that solve similar customer problems or fulfill similar needs, even if they operate in different markets.
Iii. Gathering data and information
- Conducting market research
Conducting comprehensive market research involves gathering and analyzing data about your industry, target market, and competitors. Leverage surveys, interviews, and online tools to gather valuable insights.
Utilizing market research tools
Use high-volume keywords and SEO tools like google trends, semrush, or ahrefs to identify popular industry-related search terms and gather data on market demand and trends.
- Industry reports and publications
- Accessing industry reports
Obtain industry reports from reputable sources, trade associations, or market research firms to gain a comprehensive overview of the competitive landscape and emerging trends.
- Analyzing industry trends and insights
Identify patterns and insights from industry reports to adapt your business strategies, capitalize on trends, and address potential threats proactively.
- Customer feedback and reviews
- Using customer feedback for analysis
Gather customer feedback through surveys, feedback forms, and social media interactions. Analyze customer preferences and pain points to understand how your offerings compare to competitors.
- Reviewing online customer reviews and ratings
Analyze customer reviews and ratings of competitors’ products or services to gauge customer satisfaction and identify areas where you can excel.
Iv. Analyzing competitor products and services
- Product/service features and specifications
- Identifying key features
Identify the key features and specifications of competitor products or services that resonate with customers.
- Comparing features with your offerings
Compare your own products or services with those of competitors to identify strengths and areas for improvement.
- Pricing strategies
Analyzing competitor pricing
Analyze competitor pricing to ensure your pricing strategy is competitive and attractive to customers.
Evaluating your pricing position
Determine your pricing position in the market and adjust as necessary to maintain profitability and customer satisfaction.
- Marketing and promotional tactics
- Examining competitor marketing strategies
Study competitor marketing efforts to gain insights into their messaging and promotional tactics.
- Assessing the effectiveness of your marketing efforts
Compare the success of your marketing strategies against competitors to refine your marketing approach.
- Assessing competitor strengths and weaknesses
- Swot analysis
- Understanding swot analysis
Perform a swot analysis (strengths, weaknesses, opportunities, threats) for each competitor to identify their internal advantages and vulnerabilities.
- Applying swot analysis to competitors
Use the swot analysis to develop a comprehensive understanding of each competitor’s position in the market and their potential impact on your business.
- Unique selling proposition (USP)
- Identifying competitor USPS
Identify the unique selling propositions of your competitors – the factors that differentiate them from others in the market.
- Creating and enhancing your USP
Based on your competitor analysis, refine your own USP to highlight your strengths and set your business apart.
Vi. Understanding market share and positioning
- Calculating market share
Use market research data to calculate your market share and compare it to competitors to gauge your market position.
- Comparing your market share with competitors
Understanding your market share relative to competitors will reveal areas where you can improve and increase your market presence.
- Positioning in the market
- Defining market positioning
Define your brand’s market positioning – the space it occupies in consumers’ minds relative to your competitors.
- Evaluating your positioning against competitors
Evaluate your brand’s positioning against competitors to identify opportunities to enhance your market standing.
Vii. Monitoring competitor activities
- Tracking competitor changes
- Monitoring product/service updates
Stay vigilant about changes in your competitors’ offerings, whether it’s new features or updates to their products or services.
- Keeping tabs on pricing and promotions
Regularly monitor competitors’ pricing strategies and promotional activities to respond effectively.
- Competitor news and events
- Staying informed on industry news
Stay up-to-date with industry news and trends to anticipate potential changes in the competitive landscape.
- Reacting to competitor events
Monitor competitor events and launches to respond swiftly and effectively, ensuring you remain competitive.
Viii. Identifying opportunities and threats
- Identifying opportunities
- Leveraging competitor weaknesses
Identify and capitalize on competitor weaknesses to gain a competitive advantage.
- Identifying unmet customer needs
Identify gaps in the market and unmet customer needs that your business can fulfill, setting yourself apart from competitors.
- Recognizing threats
- Addressing competitor strengths
Develop strategies to counter competitor strengths that could pose a threat to your business.
- Adapting to market changes and challenges
Stay adaptable to market changes and challenges, adjusting your approach as needed to remain competitive.
Ix. Implementing changes based on analysis
- Creating an action plan
- Setting objectives and goals
Based on the insights from your competitive analysis, set clear objectives and goals for your business.
- Developing strategies for implementation
Develop actionable strategies to achieve your objectives, taking into account your competitive insights.
- Continuous monitoring and adjustment
- Tracking progress and performance
Continuously monitor and measure the performance of your strategies to ensure they align with your goals.
- Adapting to new competitive insights
Stay agile and be prepared to adjust your strategies based on new competitive insights and changes in the market.
In conclusion, a well-executed competitive analysis provides businesses with a roadmap for success. By understanding their competitors and the broader market landscape, companies can make informed decisions, capitalize on opportunities, and remain resilient amidst challenges. Remember, continuous improvement and adaptation are key to thriving in an ever-changing business environment.
