We live in a modern society where consumers need to keep changing rather rapidly. Consequently, businesses are sprouting left, right, and center at the same rate in a bid to fill the gap and fulfill these needs.
This is only to say that competition is steeper than ever before in the history of business dynamics. Moreover, there comes the need to stay one step ahead of the competition if you are to succeed in your business.
However, you can’t be able to stay ahead if you have no idea who or what you are up against. That’s where competitor analysis comes into play. Simply put, competitor analysis is an in-depth analysis of your competition in a bid to unearth their strengths and weaknesses.
Done right, competitor analysis can unlock valuable insights that can help you refine your strategy and position yourself as an authority in your niche.
Here is how to conduct a competitor analysis that can help you succeed in business.
1. Identify your competitors
Competition comes in various ways, and you may be surprised that a business you considered a competitor is in fact not. There are direct competitors who essentially are offering the same thing as you in the same geographical location or online space. Then there are indirect competitors who offer substitute products to yours.
That is why you need to identify your competitors to avoid putting in efforts in analyzing the wrong businesses. Before terming a business as your competitor, first, check the products that they offer. Are they the same or substitute to yours? Are their target markets similar to yours? Are they in the same geographical or online space like you?
A quick search on the web can reveal the names that you need to consider. For best results, start by searching your business name, the other names that come up in the search results gives you a place to start. You can also search for popular keywords in your niche and check out the names that appear. This requires basic SEO training, however, if you feel like this is not part of your expertise, you can partner with an SEO company, to do the keyword research and analysis you need to thrive.
2. Gather the necessary information
After coming up with a list of the names to assess, the next step is to gather information about them. You can look at their websites and social media pages for the information that you need. You can also check on other customer review sites for what customers are saying about them.
The information that you need includes:
·The range of products and services they offer, the products features, future products, quality, and pricing
· Market positioning, market share, brand awareness, target markets, profitability
·Objectives and strategies to achieve those objectives
·Reviews- both positive and negative
·Website ranking and speed, online presence
·Resources-funding and technology
·Customer service and support
·Talents motivation and commitment
3. Do a SWOT analysis
The aim of collecting the above information is to do a comparative analysis of your business against your competitors. In other words, you need to conduct a Strength, Weaknesses, opportunities, and Threats (SWOT) analysis for you and your competitors.
You can start with their objectives and all the strategies they are employing to get there and compare to yours. For instance, if you are all planning to expand to other regions, say Germany, look at how they are planning to do that. You can then decide to take a shorter route such as expanding through a PEO in Germany. A Germany PEO will help you get settled there in a short time, hire talents compliantly even without establishing a legal entity.
Next, compare all the other details that you have gathered about the competitors and don’t leave any stone unturned. The idea here is to identify their strengths and the things that they are doing better than you. You can then work on improving in those areas with an aim of surpassing them. You also unearth their weaknesses or the things that you are better than they are. You can then take advantage of the gap to gain a competitive advantage. In addition, you identify the opportunities exposed to them and seek to take up those chances before they do.
If you are to make the most of your competitor analysis, it is important that you have an end goal in mind. Otherwise, the information will not mean anything if you have no idea why you were doing it in the first place. In addition, this exercise should not be a one-time thing. Business dynamics change so fast-your competitors might be different tomorrow. For all you know, they too might be doing an analysis of your business.
This article was written by Vincent Rubin.
Vincent is a life coach with 7 years of experience with a focus on family relationships. In his free time, he likes to read and spend time with his family doing outdoor activities. Right now he is focused on sharing his expertise with a wider audience through his writing.