A competition analysis is a key part of your business’s marketing strategy. By evaluating your product or service, you can determine what makes it special and, consequently, what qualities you should emphasize to draw in your target market.
To evaluate your rivals, split them into strategic groupings based on how closely they vie for the dollars of customers. List the product or service, profitability, growth pattern, marketing goals and presumptions, present and past strategies, organizational and cost structure, strengths and weaknesses, and size (in terms of sales) of the competitor’s business for each rival or strategic group.
Making a grid of competitors is a quick and simple approach to evaluating your product or service against similar ones on the market. Write the names of four or five goods or services that compete with yours down on the left side of a piece of paper. Consider what your consumers might purchase instead of your product or service.
Underestimating the Importance of Competition Analysis
A marketing strategy takes a lot of time, money, and effort to design for successful businesses. They put a great amount of thought into how to make the most of their budgets. They conduct extensive research on the psychographic and demographic composition of their target audiences. Additionally, they examine their outbound initiatives to make sure the media mix is as effective as possible. When businesses decide to develop a marketing plan, they typically do so with the greatest of intentions. However, there is one factor that is frequently underappreciated and overlooked, which is that competitive analysis is complete and objective.
Neglecting Microanalysis
Microenvironment analysis is the analysis of a microenvironment’s components. These are made up of all players and components of an organization’s immediate environment. These have an immediate impact on how the business is conducted. The process of doing a competitive analysis involves finding companies that provide comparable goods or services.
Then, these contestants are assessed using a set of predetermined standards. An organization can evaluate itself from the viewpoints of the customer and the competition through the use of effective competitive analysis, which identifies areas for improvement. Understanding the marketing mix of the competition is an illustration of a competitive analysis component. The SWOT analysis, the VRIO Analysis, and the PEST analysis are also utilized for this even though they are more for macro studies. The competitive environment is thoroughly analyzed using Porter’s Five Forces model.
The Competition Analysis Report Is Not Actionable
Despite being comprehensive and detailed, too many competitive assessments offer zero guidance regarding what should be adopted and what should be avoided. Copying the strategies of your rivals might not be a good idea since you risk losing your credibility and being exposed to it.
But since those companies may have been around longer than you, it makes sense to take note of their successes and mistakes.
Consider including specific action items in your competitive report. For instance:
- Adding a new landing page comparing your goods to a rival and outlining your distinct selling point.
- Speaking to influencers and trying to convince them to support your brand.
- Start building our Quora brand (seek volunteers).
- Updating your special offers page to provide your Instagram followers with greater discounts.
These could be broad (strategic) methods that are finally broken down into several steps or precise actions that only need a few seconds to complete. However, make sure that each competitive report you produce elicits some sort of response.
Overlooking Your Competitors’ Mistakes
Each competitive study should motivate action and highlight strategies to steer clear of. For instance, you want to steer clear of dangerous and ineffective link-building strategies as well as social media subjects like politics and history. To learn what won’t work for you, you should always keep an eye out for your competitors’ errors and keep a list of them.
Overlooking Your Competitors’ Successes
Be impartial enough to recognize some of your rivals’ strengths and principles. They might have an extremely useful shopping cart. Maybe they have amazing graphic designers. They might have excellent customer service. The fact is that you must be ready to acknowledge that the competition might not be too bad at what they do. It’s perhaps the most challenging part of the competitor study.
Not Sharing Your Reports with the Right People
Why put so much effort into competition analysis if it just achieves half of its potential? Alternatively, why isn’t it split between the two teams? Imagine the marketing staff receiving access to all sales data. Marketing would thus be aware of which businesses were closing deals while they are losing them. Or if their sales staff is up-to-date on everything. A strong pitch may benefit from factors like prospective new rivals, expansions, or new items. There is a lot more possibility of winning more business and attracting more leads when the marketing team and the sales team are in sync regarding what competitors are doing.
Analysis Scope that is too Wide or too Narrow
The information you obtain from the study must provide you with a detailed blueprint of how your rivals behave on social media. However, this leads to marketers’ strategies failing since they frequently rely on a small number of widely used indicators. When performing a competition analysis, it is important to review all the metrics and thoroughly examine each section of the report before drawing any conclusions.
Factors Your Competitor Analysis Should Include
Feature Matrix
Identify all the attributes that each product or service offered by a direct rival has. To see how businesses compare to one another, keep this information in a competitor intelligence spreadsheet.
Market Share Percentage
Finding the top rivals in your area is made easier by evaluating the market on a percentage basis. Larger rivals shouldn’t be completely disregarded because they can teach you a lot about how to thrive in your sector. Instead, use the 80/20 rule: Pay attention to 80% of your direct competitors (businesses with comparable market shares) and 20% of your top rivals.
Pricing
Determine the prices your rivals charge and where they rank in terms of quantity vs. quality.
Marketing
What kind of marketing strategy does each rival use? Examine the websites of your competitors, their social media tactics, the events they sponsor, their SEO tactics, their taglines, and their most recent marketing initiatives. Use these suggestions to make a fantastic business marketing plan.
Differentiators
What distinguishes your rivals from one another, and what do they tout as their strongest features? What distinguishes them from your business?
Strengths
Determine what works for your competition and what they are doing successfully. Do customer review suggest they have a better product? Do consumers know much about their brand? Can you personally examine a competitor’s products to see where they excel?
Weaknesses
Determine what your rivals could be doing more effectively in order to get a competitive advantage. Do they employ subpar social media plans? Does a competitor not have an internet shop? Is the competitor’s webpage out of date? Turn their weaknesses into your strengths.
Geography
Take a look at the areas that your rivals serve and where they are located. Do they operate primarily online or are they brick-and-mortar businesses?
Culture
Analyze the goals, employee happiness, and corporate culture of your competition. Is it the kind of company that started marketing the year it was founded or was it only recently founded? For more information on the corporate culture of competitors, check out employee reviews on sites like Glassdoor.
Customer Reviews
Examine the client/customer feedback of your rivals, both favorable and unfavorable. Look at the 5-star, 3-star, and 1-star reviews in a 5-star system. Three-star ratings are frequently the most truthful.
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