Competitive analysis is an essential part of any corporate strategy. Studying information about a competitors’ products, methods, costs and marketing, as well as their strengths and weaknesses, will help you to identify any opportunities in the market. You will also gain a better understanding of the products and services you should offer and how you can market them effectively.
A good analysis is a report of the actual market terrain that your company must navigate in order to be successful. The analysis begins with a list of your company’s competitors and should finish with an outlook review detailing what the market is like for your company’s product right now.
Who are Your Competitors?
Make a list of your company’s competitors; most of the time this will include companies you are in direct competition with, but remember there are also likely to be companies you are in competition with indirectly too.
Establishing who you are in competition with on the internet is as easy as entering a search into Google using your key search terms, and making a list of the top ten.
The list should comprise anyone who you will be sharing your customers with whether directly or not and you should also consider anyone who may be launching a business in the upcoming year. Once you have compiled the full list, highlight those businesses you consider will pose the biggest threat to you.
What Products are they Selling?
Analyze your competitors’ products in terms of quality, features and value. Look at how they sell their products and consider how customers view them and what would make them choose their product over yours.
What are their Strengths and Weaknesses?
Be objective when performing a SWOT analysis on your competitors. You’ll achieve nothing if you are biased towards your own business, instead try to view the competition through their own eyes. If they’re growing quickly, try to think what may be contributing to this growth.
There are numerous internet resources you can use to find this information out; the competitor’s website is a great start and the trade press will also provide you with a valuable insight. However, for a fully-rounded view don’t just stick to the internet, make some calls to others who are active in your industry and ask them. You’ll be surprised how happy they are to share this information with you.
What are their Strategies and Objectives?
This part of the analysis can be tricky and a little investigative work will be required to get a full picture. Try to establish how your competitors market themselves through press releases and advertising and review quarterly and annual reports if they’re publicly available.
What is the Market Outlook?
Consider the market you are in as a whole; is it growing? Is it flat? Are there enough customers to go around? Is it breaking into niches?
This part of the analysis is a measure of trends and by the time you have completed your research you should have a good idea of where your market currently stands, and where it is likely to lead in the future.