Knowing who your competitors are is a key piece of business intelligence, helping you understand your market and the core threats and opportunities in your sector.Competitor analysis is the process of identifying, researching and gauging the threat posed by your competitors and is usually carried out prior to launching your business. But monitoring competitors is a useful exercise to undertake regularly, for several reasons.
Regular competitor analysis helps to:
- Understand where you sit in the marketplace
- Identify gaps in the market that you could exploit
- Identify trends that may present a business opportunity
- Looking for the threats and opportunities
For example, if you sell chocolate bars, your immediate competitors will be other chocolate makers. But your product may also compete with fruit and other healthy snack foods, (an insight that highlights a potential opportunity to develop a healthy chocolate range).
To start your competitor analysis:
- Look for competitors online – if competitors’ are limited companies or publicly listed, you can find information about their company online. Check your local registry of incorporated and public companies and find out as much information as possible about their business. Knowledge is power, after all!
- Run a SWOT analysis – A SWOT analysis looks at the Strengths, Weaknesses, Opportunities and Threats within your sector. By looking at where your competitors are strong (and weak) you can quickly position each business within the market and identify their potential impact on your own business and strategy.
- Survey your customers – asking your own customer base for feedback on competitors can be enlightening. Find out if customers have tried other products/services offered by your competitors. If they have (or still do) you’ll get some valuable qualitative feedback on their products and your competitors’ customer service etc.
- Review competitors’ marketing – your competitors will be using marketing to promote their offerings, so you can easily visit their website, sign-up for emails or pick up their literature at expos. By analysing their marketing, messaging and campaigns, you can gain plenty of useful information around their key strategies.
- Look at their product offering and prices – with so much information available online, it’s relatively easy to get a drilled-down overview of your competitors’ product ranges, and their price points. In turn, this can help you develop your own product range, and decide on price points that sit competitively alongside your direct competitors.
- Follow their social media – social media is increasingly important as a marketing tool. So follow your competitors on Twitter, LinkedIn, Facebook, Instagram and YouTube etc. You can review the demographics of their followers, keep up to date with their latest news and help your own company stay one step ahead.
If you want to have the best possible business intelligence about your competitors, you’ve got to do your homework. Track and measure your close competitors – and do it on a regular basis to stay ahead of the pack.