How well do you know your competition? Not just the one competitor nearby, but all of them? How much time do you spend gathering information about your competition? Are you “scouting” like they do in the military? Silently observing your competition, sizing them up, comparing their approach to yours? No, this is not “cheating”. This is simply being on your toes and gathering critical data to help you be more successful.
A competitive analysis can help you learn the ins and outs of how your competition works, and identify potential opportunities where you can out-perform them.
It also enables you to stay on top of industry trends and ensure your product or service is consistently meeting — and exceeding — industry standards.
How to do Competitive Analysis
- Determine who your competitors are. Include Direct Competitors: These are the businesses that offer similar products and services and target the same customers in the geographic area that your business serves. Secondary/indirect competitors: These are the businesses that offer different products and services and target a different clientele, but are in your same general category (e.g., a winery and a brewery are secondary competitors because they both sell alcohol).
- Determine what products your competitors offer. Compare their products to your own, ideally by purchasing and trying them out yourself. How is the quality? What features do you like or dislike?
- Research your competitors’ sales tactics and results. How are they building trust with potential customers and inspiring them to buy with clarity & confidence?
- Take a look at your competitors’ pricing, as well as any perks they offer. How are their products and services priced? Do their prices vary? What is their discount policy? Can you estimate their cost structure?
- What are their delivery charges and times? Are you meeting competitive shipping costs and deliver times?
- Analyse how your competitors market their products. What marketing tactics are they using to interact and engage with their customers? What is their presence on social media?
- Take note of your competition’s content strategy. What messages are they communicating, how and to whom?
- Analyse the level of engagement on your competitors’ content. Who is engaging with their content marketing and how?
- Learn what technology your competitors’ use. What technology do they use to run their business and operational processes – customer facing applications, production and logistics, back office, financial etc.
- Look at their social media presence. What strategies are they using and what platforms.
- Perform a SWOT Analysis. Learn their strengths, weaknesses, opportunities, and threats.
Now, with all this information, it’s time to figure out what the results mean for your business strategy. Ask yourself: what are we good at relative to the competition and where do we want to focus?”
Analysing the competitive landscape will help pinpoint your competitive advantage and Unique Selling Proposition (USP). It could be a distinctive strength that appeals to your target market and something you can build your brand image and messaging around. Or if you see a weakness in the competition, you could lower your prices and launch new promotions to take advantage of the opportunity.
