What is Competitive Analysis?
When it comes to business none of us operates in a vacuum.
Besides having to meet the changing needs of our customers and having to adapt to the threats and opportunities that may arise from wider social, economic, political and technological changes, we need to be mindful of what other businesses are doing in our own market or industry. This is where the value of competitive analysis comes in.
Competitive Analysis Definition
Competitive analysis is focused on identifying who your major competitors are and researching their products, sales and marketing strategies. It’s also concerned with identifying their strengths and weaknesses relative to your brand and the subsequent opportunities and threats to your business. Once you have this, you’re better able to distinguish your own brand from your competition and create solid business strategies that improve upon your competitor’s.
Why competitive analysis is important
To keep them improving and moving forward, the insight from competitor analysis is vital in helping successful organizations identify opportunities where they can out-perform their competitors. It also helps them to stay abreast of industry trends and ensure their products and services are consistently meeting and exceeding the standards for their industry.
Without performing competitive analysis an organization risks not understanding what consumers prefer about their competitors, failing to identify their own vulnerabilities, misinterpreting threats and missing out on new opportunities. This can lead to them falling further behind their competitors.
What to include in a competitor analysis?
So, having taken the decision to undertake competitor analysis, you’ll want to prepare a list of the areas you need to be researching.
Here’s a breakdown of some of the more important areas you need to be examining.
Know who your competitors are
To be able to compare your data accurately, you’ll need to work out who you’re really competing with.
To do this you’ll need to divide your competitors into two categories: direct and indirect. Your direct competitors will be those offering a product or service that could pass as a similar substitute for yours, while operating in the same geographic area.
Alternatively, your indirect competitors can provide products that while not the same, can satisfy the same customer need or solve the same problem.
Product and features
The lifeblood of any business is its products or services, so this is the next area you need to focus on.
You’ll want to analyze your competitor’s complete product line and the quality of the products or services that they have to offer. You’ll also want to know more about the features and strengths they are promoting to help distinguish themselves from their competitors, as well as what people most like or dislike about their products.
Every business has a pricing strategy, so you’ll want to know what your competitors’ pricing strategy is.
Obviously, there are a lot of factors that help to determine the price at which an organization sets its price, but by looking at the medium of your competitors’ prices, you’ll gain a better idea of the price customers are prepared to pay for your type of product in the marketplace.
You only have to think about popular brands such as Microsoft and Apple, to appreciate the importance of brand awareness and recognition, to the strength of a company’s performance in a particular market.
Therefore, in order to examine how well your brand is perceived against that of your competitors, it can be valuable to run a brand awareness survey of customers in your marketplace to measure brand awareness levels of your organization and its products and services.
While these are some of the more popular areas to explore, it’s also prudent not to overlook further areas that can help you to identify opportunities for outperforming your competitors. These can include your competitors marketing strategy, culture, the regions they service and what customers are saying about them on customer review sites.
How to analyze competitors
Once you’ve identified the key areas you need to be examining, it’s helpful to know what methods are available to you, to gather the information needed for your competitor research.
Here are some avenues for you to consider.
From directly reviewing your competitors’ websites and how they are positioning themselves, to reviewing what customers are saying on product review sites and the feedback and performance they are experiencing on social media sites. Given the sheer amount of information that is available online, some digital desktop research is probably the best place for you to start.
In the vast majority of cases sales staff will only be too pleased to discuss their company’s products and services with you, as well as offering their views about competitors, enabling you to gather a lot of valuable information, if you make a covert enquiry with them.
Another effective way to get the information you need is to reach out to customers via a range of different survey distribution methods with an online market research survey to get their views about how they perceive your organization and brand against that of your competitors.
Your sales department
By the very nature of what they do, sales staff are frequently exposed to competitor information. One of the main sources of this information typically comes from your customers, who may comment about your competitors, particularly if they have moved over from them to you or used their products and services in the past.
You might also want to consider looking at some further areas such as advertising, which can give you a quick snapshot of your competitors pricing and product value proposition, or even reference databases and other material in libraries that can provide some useful background information. However, ultimately the mix you choose will depend on your type of business and the industry you work in. It’s about finding the best approach to meet your needs.
Who could benefit from your findings?
Having conducted competitor analysis, you’ll want to share it with those who will benefit the most from examining its findings. This will also help your organization to move forward.
Here’s some departments and teams you need to be sharing this information with.
Product and development
Although, the most forward-thinking companies will already have a carefully researched and planned out road map for product development, the intelligence gained from regular competitive analysis, can be extremely valuable in enabling tweaks to be made to maintain a competitive advantage.
From content marketing and social media to campaigns and events. The intelligence gained through competitive analysis can also help to refresh and improve many facets of a marketing plan, especially when it’s used in tandem with the findings of a market survey.
Given how critical their role is in bringing new revenue into a business, competitive analysis will be extremely valuable to a sales team. Not only will it help them to speak more knowledgably about the market and incorporate useful soundbites into their selling, but the increased understanding it will give them should help them to close more deals.
The findings from competitor analysis are also useful for senior managers within an organization. Not only does it help them to speak more knowledgably about the wider market to stakeholders, but it ensures they can keep staff focussed on areas of greatest value to the organization’s growth.
Why every brand should conduct regular competitor analysis
From uncovering market trends and identifying new gaps in the market, to developing new products and services, and learning to market and sell more effectively. Despite the extra time that will be needed to carry out competitor analysis, the benefits will far outweigh the extra hours that will need to be invested. Subsequently, there’s never been a better time to get started with this.