Are you aware of the competition you are up against? What are your competitors doing? Why is competitor analysis important ?
The goal of competitor analysis is to become aware of your competitors to provide an edge over the competition. It is an effective strategy to evaluate the strengths and weaknesses of competitors and adjust your strategy accordingly. It is a brilliant way to look at your business from the outside, in the shoes of a customer.
- CURRENT TRENDS AND STRATEGIES - Your competitors are a storehouse of information on the current trends and innovations in the industry. They give you an edge to think creatively and outdo yourself.
- STRENGTH AND WEAKNESSES- Knowledge of what they lack or mistakes committed will prevent you from doing the same and enable you to improvise the current strategy.
- GAPS IN THE MARKET- It helps you identify the potential gaps in the industry where your resources could harbour more gain.
- EFFECTIVE MARKETING STRATEGY- It makes your marketing strategy and process more effective. Knowing how well their products sell and comparing it with yours. This will help to up your game.
- BUSINESS PLAN-Once you get an idea of the strategies and competition in the market, it will give you a roadmap for your business plan.
- UNIQUE BRAND- It is extremely useful in creating a unique brand for yourself. Once you find out what the others are up to, you can strategize to differentiate your products from others.
The competitors can be either direct, indirect, or substitute ones depending on the product they sell. Whether they sell the same product, similar one, or substitute yours.
WHY IS IT OVERLOOKED?
Most businesses strategize their plans from an inside point of view. It could also become misunderstood as spying or illegal. They assume the customers would relate to the concept the same way as them. But competitor analysis becomes essential as it involves putting yourself in the shoes of the customer.
- Does the product meet their demands?
- Is it unique from the others?
- What makes them select a particular brand and why?
These will give you an effective plan to strategize your marketing process.
HOW TO DO COMPETITOR ANALYSIS?
- IDENTIFYING THE COMPETITORS
- COMPARE PRODUCTS AND SERVICE
- EVALUATION OF STRATEGY
- MARKETING POSITION
- REVIEWS
WHO ARE THE COMPETITORS?
The first thing on the list is to figure out your competitors. Classifying them into direct and indirect competitors will make your work easier.
Direct competitors- They are the ones who provide the same products or services like yours. They target the same audience. Hence, it is crucial to know what you will be up against to stay in the race. Moreover, ask questions like whether they operate in the same geographical area as yours? What is the range of products they sell?
Indirect competitors- They don’t provide the same product but could be similar ones that can have the same end goal as yours.
It is not feasible to obtain information on all your competitors especially when there are so many. Using the 8/20 will be helpful in this case. They are so many platforms that could help you get an idea of what are you are looking for. Get to know their website, advertisements, customer experiences, and their prices and discounts.
- COMPARING PRODUCTS AND SERVICES - The products or services offered are the heart of any business. Obtaining SWOT information i.e., strengths, weaknesses, opportunities, and threats. Getting to know about the quality of their products, how they cater to the customers, and prices in comparison to yours will help you figure out where yours is lacking. Finding out more from the people you are trying to sell to i.e., your customers, can give you a lot of information on your competitors. By putting yourself in the shoes of the customers, you can identify their needs and mentality.
- EVALUATION OF STRATEGY - If you are starting against one of the dominant providers, you need to strategize accordingly. Ask questions regarding their founding year, how quickly they rose, investors, mergers, no. of customers, and market share. Observe their marketing strategy, technological assets, advertisements, pricing, and discounts. Thus, this will not only keep you updated but also uncover potential gaps in the field.
MARKETING POSITION AND CUSTOMER REVIEWS
Their marketing position is determined through social media, advertising, influencers, sales, and customer service.
Once you have done sufficient research you must focus on improvising your products and services. Brainstorm ideas to create new standards, offer unique features that sets you apart, and reduce costs.
The goal of competitor analysis isn’t to steal ideas. It is done to understand the status of your business and ways to improve its position.
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