The Basics Of Competitor Analysis

Competitor analysis is a strategic business activity that involves evaluating and understanding the strengths and weaknesses of current and potential competitors in a specific market. The goal of competitor analysis is to gather information that can be used to make informed decisions about a business's strategy, marketing, product development, and overall positioning within its industry. 

This article will give a basic understanding of how to get started.

Why is competitor analysis important?

Competitor analysis is an undeniable part of strategic planning and business development. Every business can gain from regular competitor analysis

By conducting competitor analysis you can:

1. Stay ahead of the latest trends

2. Avoid mistakes

3. Find gaps in your niche/market

Competitor analysis comes up in many areas throughout business so it's a useful subject to know about.

Here are some steps to start your own competitor analysis:

1. Identify who your competitors are:

Start by searching for some keywords related to your business or search for your product or service, then make a list of all the potential direct and indirect competitors. Direct competitors offer the same product or service whereas indirect competitors might solve the customer needs in a different way.   

2. Start with the basics:

Start with the basics. Collect publicly available information on your competitors, such as their company profiles, mission statements, and recent news or press releases.

3. SWOT Analysis:

Conduct a SWOT analysis for each competitor. Identify their strengths, weaknesses, opportunities, and threats. This analysis will provide a foundational understanding of their strategic position.

By looking closer at what your competitors are doing in the industry, you can often take the opportunity to analyse your own strengths and weaknesses in comparison which can give you a deeper look into your SWOT analysis. This self-awareness is important in developing strategies that work to your strengths and address weaknesses.  

4. Product or Service Analysis: 

Examine the features, quality, and pricing of competitors' products or services. Compare them to what you offer to identify areas for improvement or opportunities for differentiation.   

5. Market Positioning: 

Market positioning refers to the way a brand differentiates itself in the minds of its target audience relative to its competitors. It's about establishing a unique and compelling position in the market that resonates with customers. A business' USP for example.

Analysing competitors helps a business understand its position in the market. It allows for the identification of opportunities to differentiate products or services and find a unique value proposition that appeals to customers. 

6. Customer Feedback: 

Look for customer feedback and reviews about competitors. Online reviews, social media comments, and customer forums can provide valuable insights into customer satisfaction and pain points which are opportunities for you to solve those issues in a way that keeps them coming back for more.

7. Identify Market Trends:

Stay informed about current and emerging market trends. Understanding industry trends helps anticipate changes and adapt strategies accordingly.

8. Regularly Update Your Analysis:

Competitor analysis is an ongoing process. Regularly update your information to stay current with changes in the market and your competitors' strategies. every 6 months to a year is a great way to keep on top of it.   

By following these steps, you'll set a solid foundation for a comprehensive competitor analysis. Keep in mind that the depth of your analysis can be adjusted based on your resources, the significance of the competition in your industry, and even how far you personally want to go with it.