Competitive analysis is a field of strategic research that gathers and reviews information about rivals operating within the same industry. It is important to know what your competitors are doing so that you know if they could become a hindrance for your financial well-being. Or you could find out what market gaps are present which have not been identified yet that you can capitalize upon. This way you can gain the first mover advantage.
In simple words, competitive analysis helps answer two basic questions for you:
1. How is my business doing in comparison to XYZ?
2. What is my perception of my business versus the market perception?
Acquiring Marketing Intelligence & Competitor Information:
With the advent of social media and technological advance, it is very easy to know what competitors are up to, especially through daily news monitoring and various other ethical means of gathering information about them. There are a few basic steps of getting to know what competitors are progressing, for instance:
1. Listing down your top competitors and gauging their business health:
Depending on what product you are selling you should identify the main competitors prevailing in the market for both branded and unbranded products. This way you will be able to know who your direct and indirect competitors are and what level of threat they may pose to your business.
2. Finding market share:
Depending on how big a region you are selling your product in, you should break it down into territories and ascertain the market share in each of these other than the overall market share. This way you can set a target of increasing market share and later develop strategies to be used in doing so by a certain period of time. You should also know your competitors’ unique selling propositions because of which their brands might be the preferred choice of customers.
3. Performing a SWOT Analysis:
After getting to know the market share, you should do a SWOT Analysis of each of your competitors as well as yours. This is important as it shows your position in the industry and helps you set a benchmark to pave your way ahead of the competition through the development of effective strategies. This could also help you identify areas of improvement and find an opportunity for your company through market gaps identified in the process.
4. Building a product portfolio of your competitors:
In doing the competitor analysis, you should also make a summary of the competitors’ product portfolio. Similarly, you should be able to identify the competitors’ tangible and intangible product features and the benefits being offered to the end consumer. Such a portfolio should be kept updated with the help of the sales staff. These are the people who are continuously in contact with the market and can share updates as soon as something new gets introduced.
5. Develop strategies:
Get to know what strategies are being used by each competitor, conduct their web and social media analysis and know how integrated each touch point is. You can thus plan your strategies and line of action, meanwhile setting priorities accordingly.
You can learn from competition, while either operating like them and becoming a market follower or introduce a completely new product idea, thus availing a leadership position.