Your company’s competitive analysis and preparation of your product or service will help you to succeed. There’s a high chance that someone is selling something similar to what you are selling
How can you deal effectively with your competition and gain an advantage over them? Doing a competitive analysis is the best way to find out.
What is a Competitive Analysis?
Competitive analysis is a strategy tool that helps you identify and evaluate your competition. This is done to identify the strengths and weaknesses of your competitors regarding your product or services.
Competitive analysis has the following main goals:
- Examine the market landscape
- Forecast the demand and supply of your market
- Restructure your business strategy
- Forecast market trends and patterns
You can learn about your competitors and their strategies so that you can take the right steps to increase your company’s performance and distinguish yourself from them.
Create a list of all your competitors
First, identify your competitors. It may seem simple, but it can be quite difficult. You may be familiar with one or two companies you are interested in, but that is not enough to do a competitive analysis.
Use the following:
- Search Engines – Entering your business name into a Google search engine will automatically produce suggestions for businesses offering similar or identical products.
- Search Engine Ads – Similar to the above, they show you paid ads from businesses that target the same market.
Once you have identified at least 5 competitors, divide them into two categories. To be able to carry out your competitive analysis successfully, both types of competitors must be considered.
Competitors either direct or primary
These are companies that offer the same product or service in the same place and to the same customers. Let’s say you sell bread. A direct competitor is any bakery that sells bread in the same location to the same consumers at the same price.
Competitors’ indirect or secondary
These are companies that offer different products, but target the same market and solve the same problem differently. You may be also interested to know Local SEO for medical professionals.
In the above example, an indirect competitor would be a bakery that sells pastries and cinnamon rolls as well as pastries. The products may be different but the purpose and target audience remain the same.
Choose a framework for competitive analysis
The SWOT analysis is a popular competitive analysis tool that has been embraced by many successful companies. The SWOT analysis examines four sets of data about your competitors.
- Strengths: What are your competitors doing well that sets them apart?
- Weaknesses: What are customers complaining about most? And what products do they often miss?
- Opportunities: Are there any product changes made by your competitors that you could use?
You will get the most from this competitive analysis tool if you have enough data to cover all four areas. Once you have this data, begin brainstorming ways to improve the business practices.
Analyze your competition
Once you have identified your top competitors and established your criteria, you can begin to run your competitive analysis framework. To improve your business processes, analyze each competitor using your criteria.
Identify areas that can be improved
Your findings might seem overwhelming at first. That’s normal. Once you begin to sort the data, everything will become clearer. You can categorize your results in a way that allows you to refer to the data easily, such as by product features or competitors.
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