Every entrepreneur needs to analyse the competition before starting a business and then during its development. Proper competitive analysis will allow you to organise your work in such a way that a potential customer will want to buy from you without any doubt in his decision.
What is competition? Simply put, it is a struggle for the same resources. In commerce, you are competing with all those who want to sell goods to your potential customer. They are fighting for his attention, loyalty and money.
Why is competitive analysis important?
The main purpose of competitive analysis in any industry or market is to gain information about the strengths and weaknesses of your competitors, their intentions, and opportunities to improve the efficiency of your business.
When analysing the competition, the first thing you need to do is to look at your product not from the point of view of a manufacturer, seller or marketer, but through the eyes of a potential customer. They are the ones who choose between the many options on the market.
Selecting companies to compare
To start the analysis, you need to select the companies you want to analyse. It is advisable to work with 10-15 competitors. This will ensure the best quality of the comparative analysis. The competitors can be searched using search terms that our existing and potential customers can use. Include in your checklist companies that offer similar or like products or services. Include the company name, website address and a brief description on your list.
Gathering information
Use a 'tried and tested' way of gathering information about the competition. Follow the customer journey from start to finish. Go to the website and leave an enquiry; see how managers contact you, what they say, what they do if you do not want to place an order, whether they "push" you and what tools they use to do this, etc.
You should also gather information about competitors from the following sources:
Website. Analyse the information on competitors' websites, including products, prices, product cards, promotions, etc. Also evaluate the visual design and ease of use of the web resource.
Social media. Look at competitors' YouTube videos and social media content. You can usually find a lot of useful information there.
Reviews and comments. On various platforms, read customer reviews about competitors: both positive and negative. This will help you understand your competitors' strengths and weaknesses from a consumer perspective.
Financial reports. Where public information is available, examine company financial reports for data on revenues, profits and growth strategies. Measure each competitor's market share to determine their influence. This will provide a better understanding of the market structure and identify opportunities for growth. If companies have poor financial performance, they may be excluded from further analysis.
Products and services. Study competitors' products and services in detail, as well as any new or unique offerings.
Advertising. Using dedicated services, familiarise yourself with your competitors' advertising campaigns on social networks and the keywords they use in their advertising.
Analysing information
The information you have gathered needs to be systematised and analysed. Use a SWOT analysis to identify the strengths and weaknesses of your competitors. Find out what part of their work is better organised than yours. Then decide what and how you can change to improve customer service and get ahead of the competition.
Next, create an action plan to strengthen your competitive advantage. Prioritise those ideas that will deliver maximum results with minimum effort. In addition, strive to reach the level of those who have already achieved high results. Analysing the market leaders will give you dozens of ideas for your development.
The market is constantly changing, so update your information regularly and revise your analysis to keep up with the current situation, advises Step Link. As well as helping you avoid unpleasant surprises, competitor analysis can also provide opportunities to improve your own product or service. Effective use of competitive intelligence can be the key to developing a successful business strategy. Our experts are ready to help you analyse the market, identify opportunities to develop your business and develop strategies and tactics to achieve your goals.