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Analysis of Your Competition |
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Written by Editor
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Monday, 08 August 2005 |
Competitive Analysis
- It is vital to understand your competition because business takes place in a highly competitive, volatile environment
- You must ask some of the following questions:
- Who are your five nearest direct competitors?
- Who are your indirect competitors?
- Is their business growing, steady, or declining?
- What can you learn from their operations or from their advertising?
- What are their strengths and weaknesses?
- How does their product or service differ from yours?
Begin a file on each of your competitors including advertising, promotional materials, and pricing strategies and make sure to review these filesCompetitor analysis should contain:- Names of competitors
- List all of your current competitors and research any that might enter the market during the next year
- Summary of each competitor’s products
- Include location, quality, advertising, staff, distribution methods, promotional strategies, customer service, etc.
- Competitors’ strengths and weaknesses
- List their strengths and weaknesses from the customer’s viewpoint
- Detail how you are going to capitalize on their weaknesses and meet the challenges that their strengths represent
- Competitors’ strategies and objectives
- This information can usually be easily obtained by getting a copy of the annual report which might take analysis of many information sources to understand competitors’ strategies and objectives
- Strength of the market
- Is the market for your product growing sufficiently so there are enough customers for all market players?
Ideas for Gathering Competitive Information
- Internet
- Personal visits. Visit your competitors’ locations and observe how employees interact with customers, how their premises look, and how their products are displayed and priced
- Talk to customers. Since your sales staff is in regular contact with customers, you can easily learn what they are saying about your competitors.
- Competitors’ ads. Looking at their ads will allow you to learn about their target audience, market position, product features, and benefits, prices, etc.
- Speeches or presentations. Attend anything where representatives of your competitors are giving speeches or presentations.
- Trade show displays. Look at your competitor’s displays as if you were a potential customer. Also, seeing what trade shows or industry events they attend will give you an outlook on their marketing strategy and target market.
- Written sources. General business publications, marketing and advertising publications, local newspapers and business journals, industry and trade association publications, industry research and surveys, and computer databases are all good mediums to gather this information.
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