Competitive analysis is defined as “identifying your competitors and evaluating their strategies to determine strength and weaknesses relative to your own product or service.” Competitive analysis is a crucial part of both your business plan and your marketing strategy. Understanding your competition can help you gain valuable insights into the strengths and weaknesses of your own business.
In today’s marketplace, especially in light of the current challenging business climate, standing out from your competitors and developing your brand identity is more important than ever before. By examining your competitor’s product or service, profitability, marketing, sales, and organizational structure, you can turn inward and take a closer look at yourself. This is the time to make note of how you’re different and why consumers should choose you over your competitors.
While competitive analysis can be a difficult and time-consuming endeavor, it doesn’t have to be. It is however, a critical part of any business plan and the data can be some of the most important information you’ll use to develop your own marketing strategy, and sales approach. Let’s take a look at analyzing your competition.
Profiling Competitors
Much like a real estate agent determines a home’s sale price by examining comparable properties, your competitive analysis should start with businesses that are similar in style, and offer similar products or services. For example, if you operate a brick and mortar retail, clothing store, you are competing with other brick and mortar clothing stores. If you offer an online component, you can also analyze other online competitors, but make sure they’re similar in size and scope. While you technically may be competing with Amazon.com, you need to be more aware of your direct competitors actions.
Begin by asking and objectively answering questions about each competitor.
• What are Their Strengths? Price, service, location, hours, inventory and ordering are all areas where you can work to differentiate your business from your competitors.
• What are Their Weaknesses? Weakness can be opportunities for your business to shine. Understand your competitor’s weaknesses and make them your strengths.
• What is Their Business Objective? Are they looking for premium customers, do they incorporate loss leaders or ultra high-end merchandise? What are they trying to achieve? Is this a market for you, and how can you exploit their weaknesses to gain share?
• What Marketing Channels and Strategies Do They Employ? Look at their ads, website, marketing materials, collateral materials, past clients and projects. Search online for news stories, PR, Twitter and Facebook etc.
• If They Have Physical Locations, Visit Them. Look around and gather information like promotional literature. Have friends or employees visit and ask questions.
Competitive analysis is more than simply an exercise, or chapter in your business plan. Gaining an understanding of your competitors can help you to identify areas of your own business that can be changed to be more effective. Learn from your competitor’s strengths and take advantage their weaknesses. Use this knowledge to gain insight into, grow, and improve your business.
At ADTACK we can generate a FREE competitive analysis for your company, click below to get started.
