Competitive analysis is definitely essential for you if you want to expand your brand or company in a competitive market. It is becoming extraordinary important because of tough competition in each and every sector of business. There must be other companies in market who provides the same products or service as you. There are some major steps to be followed for a company to outperform their level in community.
Here are some steps for conducting a competitive analysis. A company will able to stand somewhere in community only and only when they’ll get to know about their competitors.
Identify your current and future top competitors
The best method to identify competitor’s top competitors is to target products and services that are similar to your organization. Such as if you’re selling shampoo, you need to know about all the companies selling that brand in the market. In addition, you need to know how many of people prefer using any other product than this shampoo you’re selling. This is the first step in conducting competitive analysis, thus by doing this you get to know your indirect and direct competition.
Inspect and compare competitor’ content
After you’ve identified your competitors in the community, you can restart your analysis with some more precision and concentrate more to gain a better understanding of what they are providing to their customers. Analyzing their content can help you in determining what options can help you in surpassing them in the community. Conducting and preparing your competitive analysis consists of these following steps.
- Regulating research
- Assemble competitive information
- Inspect competitive information
- Calculating your own competitive information
In a competitive analysis, professional marketing research such as questionnaires and focus groups can get you valuable and essential information. Though a marketing research company will save you lots of time but it can be much expensive which impossible for a new growing company to hire one. Kind of information you may need about your competitors is willingly available to every business owner.
As your brand starts growing and expanding, keep researching yourself and with some formal research conducting firm. But you must acquire the answers of these questions before searching the sources listed below.
- Who are my top competitors?
- How can in compete them?
- What types of products and services they provide?
- Are my competitors advantageous?
- Are they growing or scaling down?
- How they’re in this business?
- What is their reputation in front of their customers?
- What are their flaws in doing marketing?
- How can I differentiate my company from other competitors?
- What is their business strategy?
- How do they stand on: customer service, quality service, inducements, pricing etc
And many more familiar questions
Assembling competitive information
Alternative origins of information are referred to as a great starting point for establishing a comities marketing analysis. This information is developed for a certain purpose but eventually made available for public access and also secondary uses. With the increasing speed of document verification and checking through electronic medium, alternative sources of information are not just inexpensive but are easily accessible after publication. Origin of information comprise
Not only advertising receipt tells you about the pricing and quality of your competitor’s, it provides you with info about your competitor’s budget and full promotional scheme. When inspecting a competitors’ advertisement make sure to notice the following: special offers, quality, benefits and features, and product type etc. If your competitor has imposed something in his advertisement that you’re not offering, he is actually trying to achieve something that distinguishes him from others.
- Magazine and newspaper Articles:
Articles and advertisements in newspapers, magazines and other secondary media are a source of getting valuable information about your competitor, and determining what he’s planning to do in the future, examining how their business is run by them, what new privileges or services they have. Some reviewers may also expose and reveal their hostile information that can be essential to you. Keep yourself up to date with your competitors review in magazines; they will expose a competitive product’s power and weakness.
- Sales prospectuses:
Sales prospectuses provide valuable product information. Make sure you note the strategy of your competitor’s that how he’s positioning their company and service and what benefits and privileges they’re providing to attract customers. Acquire maximum sales prospectuses and articles your competitor issues.
- Your sales team:
Sales staff has more information about the competitive information than anyone else in the company. Purpose of salesperson’s job is to find what problems customers are facing with competitor’s product or service. In this way you will also get to know about your competitor’s service benefits, strength, weakness, and other information.
- Other employees:
Your employees that are working in the area of your competitor’s company will get to know about competitive information. As they talk with people in that area and note what your competitor is doing to become more successful.
- Trade corporation:
Authentic and expertise trade industries assemble and reveal industry information and statistics on industry news through trade corporation newsletters and magazines. These companies also support professional meetings and trade shows. This is an essential opportunity to examine first-hand that what your competitor is manufacturing and producing.
- Your business system:
Make sure you held a questionnaire to your suppliers, customers, sponsors, and industry experts about your competition’s product and service against you.
Analyzing competitive information
Once you’ve acquired all the data you were able to gather, it is time for inspection. You should inspect to make sure product’s market share, information, marketing programmes, and to determine your competitive weakness, and power.
You should be aware of your customer’s and potential customer’s choice about what product features and benefits are most important to them. Your sales team and feedback should be able to tell you this. A service competitive strength is mostly depends upon its pricing, that how good it is different from its competitive price. Now what is competitive pricing?
“Competitive pricing is determining the price of a service or product situated on what the competition company is asking. This method is used by companies providing similar service or products, thus services can differ from company to company, while the quality and features of product remains the same”
Make a list of features and benefits of product your company is selling and assemble a table to determine if your competitors provide them or not. Such as a medium organization that purchase a printing machine may look for the following features and benefits in it
- Product quality
- Design/Image quality/Appraised value
- Social image
Evaluate competitive benefits and features of products
Find out which of your competitor is offering which feature, features are described straightforward so there’s no complication in it to evaluate them. Either a product will have some features or it doesn’t. On the other side, evaluating benefits is kind of difficult; they can only be located with customer’s feedback and reviews.
Compare your product with your competition
The next step is to inspect competition’s service or product. How your products stand in front of your familiar competition company? What benefits and features are unique and effective in your product than competition? Keep one thing in mind, the uniqueness and benefits of your product determines the success and strength of your company in future.
For example if the printer offered by you can print multiple copies at a time, but printer offered by your competition doesn’t have this feature. Customers will definitely prefer your company in purchasing the printer, as they seek effectiveness, quality, and features.
Find out the price your competitor is offering for the same product in your company. Just because you and your competitor have the same product with same features doesn’t mean your prices will also be same. If your price for a particular product is even slightly higher than your competitors price, your position in community is weaker than your competition.
A temporary price decrease can seek attention of customers and potential customers. People always look for good quality product in lower price that could be beneficial for you. But, rage of lower prices in your competition products is sign that he is trying to obtain market share and improve production costs.
Customer favoritism of products
Customer favoritism and leaning on products is a major part of analysis. There are hidden operative aspects which can offer a competitive edge also. Your competitor’s products may not be of good quality compared to yours. But what if they acquire customers’ attention by providing free delivery? Or their employees might be highly stimulated and aimed in acquiring market share. You need to know how they are doing inside. Some aspects to review:
- Monetary resources: Can they oppose financial complications? How are they financing and producing new products and improvements in older?
- Operational productivity: Can they save time and money with smart productivity and delivery methods?
- Product line range: How effectively can they increase earnings by selling similar products?
- Deliberated partnerships: How are their relations with other competitive companies in words of product establishment, marketing or add-on sales?
- Company self-esteem: What is aim, inspiration and productivity or fertility level of their employees?
Inspect the competitive strength and power
If you want to establish efficient competitive plans, there’s a need to assemble a sensible evaluation of your competitive strength and weakness, both in the views of market and their customers. You need to determine yourself that which of your competitor is doing well in business and growing faster than others, or better than your own company. Then determine in which terms your competitors are weak in order to tackle these terms in the future.
Other aspects to keep in mind
- Makeover: As you inspect your competitive information to make changes in your ownership. This is a sign that major aspects and policies are on the peek that you should change.
- New innovations: New players with innovations and ideas should be included in competitive analysis. Even though they haven’t accessed a single piece of market. Your companies need new ideas and innovations in order to be successful and progressive in future.
- Competition in future: In conducting the analysis of competitive companies, you need to make some predictions that what is going to happen in future. What your competitors can think and do in order to surpass you again? What their strategies could be? If you’ve offered some new schemes and offers, how your competitors will catch you? Estimating future competition will give potential and confidence to your investors to work with you on long-term basis.
- Fencing to entry: If you’re competitive company largely depends upon information and technology, new productivity schemes or accessible to new marketing techniques needs to avoid common barriers new competition faces when trying to acquire importance in the marketplace.
Competitor analysis is an important term of a firm’s development and progress of its strategy. Its significance lies in the understanding of competitors and their strategies, resources, and capabilities. More significantly, competitive analysis also allows a firm to know about its own flaws. After assembling a competitive analysis a firm can predict and plan for what competitors’ action may be as a reaction to actions undertaken by firm.
A competitive analysis provides a company with knowledge to increase its strength and decrease weakness, and moreover it teaches a firm to take advantage from competitor’s weakness and counter their strengths. Finally, it gives a firm better understanding not only of competitors but of the whole sector where the similar opportunities may be.