Every business strives to be competitive and stay ahead in the market. How do you make it happen? How do you keep your positioning? What are the best ways to stand out among others? How to satisfy the customers and fulfill their needs? These and other questions often disturb even the most proficient business owners and managers. This is where competitive analysis comes in.
First things first, the main task of such analysis is to get into your competitor’s heads and statistics. Of course, not literally! The main task is to figure out their strengths and weaknesses as well as opportunities and possible threats. You need to examine their positioning, market share, brand awareness, and all their competitive advantages. Sounds like not the easiest task to accomplish, don’t you think? No worries, there is a way out for you.
Why does everyone have to conduct competitive analysis?
In order to develop your company’s strategy, you need to clearly understand who else is developing similar directions of work, where ideas overlap, and what the advantages and disadvantages of each are. If you do not know your competitors, it is difficult to understand where to expect threats and who can excel in a particular niche. Competitive analysis is the ideal basis for creating a development plan for your company. Having well studied the external factors, marketers can take into account the specifics of the product or service and offer such an option for boosting business that will help to bypass competitors.
Some companies or businesses take risks and enter the market without studying enough or at all their competitors. Such a business may exist for a while, but in the long run, it is evidently doomed to failure. A further detailed study of the life cycle of such a brand when interacting with the customer will later show that the indicators are quite low and, most likely, someone else generates more leads. For example, it offers better service or sets a lower price. To bypass such rivals, you need to imagine where their weaknesses are and what the strengths of their own brand are.
It is essential to conduct a detailed study of the market when a company plans to enter it, especially with a new product. It is desirable to understand how to attract customers to what your offer, which has not yet been done on social networks, right at the start of the project. Then it will be possible to offer something new both in the product itself and in its promotion. Basically, that is something competitive UX analysis can guarantee you.
And it is also imperative to determine how the closest competitors are presented online. Today, being on top of the virtual world is especially relevant. For many clients, shopping on the Internet has become an integral part of their lives. In digital communication, it is simply necessary to differentiate yourself from your competitors and stand out among the most crucial.
Types of competitors
Should you take into consideration all the competitors? Definitely not! Depending on the industry, there can be hundreds, if not thousands, of competitors! Your task is to consider those that overlap with your product or service the most. If to regard the similarities you have with your rivals, three main types can be pinpointed:
-direct competitors (the same segment of customers, geographically similar, common price ranges, etc.)
-indirect competitors (e.g., the same target audience but another type of product or service)
-implicit competitors (offer completely different goods or services but have opportunities to develop and take your niche)
You may ask, how does it narrow the range of study? It does if you include mostly those aspects of your business that you want to use as competitive advantages.
Where to look?
This is probably the main question, “where do I find the information I need?” There is a number of options you can opt for. However, let’s define the most effective ones and those that can provide you with the information pretty fast and accurately:
-search system results
-employees (especially sales managers)
-direct communication with competitors
-special services (e.g., Clutch)
Wondering why we have mentioned the professionals at the beginning of the article? It is probably apparent to you that the whole analysis process is a complex task and requires you to spend a lot of time looking into different places just to get the information you need, not to mention to conduct the actual analysis.
What does competitive analysis comprise?
The main points of such an analysis include different aspects to consider. Let’s tackle it.
The foremost and crucial part of an analysis is to single out competitors’ strategies.
This is needed to know whether you have to:
-increase or decrease the price
-maintain, expand or reduce your market share
-improve or upgrade product or service
-enter other markets
-and the like.
One more aspect you should not leave out is their product. Our recommendation is to analyze it and all its characteristics rigorously. The next step you take is to estimate what share of the market belongs to your competitor. Sometimes, big players are not actually competitors, but they definitely establish rules and lead the dance. And you do need to dance along!
Other aspects to examine:
-Cost- and operation-efficiency
By way of conclusion
We would like to say that a new player may appear on the market at any time. The leading competitor may step up consequently. You must notice this on time. Otherwise, you risk losing the attention of the target audience, the volume of sales may fall, and the goals aimed at increasing the level of brand awareness may be failed. That is why monitoring competitors should be a regular thing.
You can’t do without competitor analysis when going digital. If you carefully study your competitor’s activity, it will be easier for you to plan your own scale of product activity and take a leading position.