A business needs to focus on several variables to devise a winning strategy for their business, including market, product, consumer behavior, and other studies. However, analyzing your competitor is a classic and one of the quickest ways to identify the underlying market potential. Even though it is one of the most effective variables to identify the market, analyzing your competitor's strengths and weaknesses remains a challenge for most businesses. Hiring a business coach that specializes in competitive analysis is a smart move. They can help you spot opportunities in your industry.
Hence, in this article, we will discuss insightful tips and processes through which you can conduct competitive analysis and have a deep dive into the market best practices.You will then learn how to analyze your competitors' strengths and weaknesses.
Being in business means you are going to face competition, be it direct competition or indirect competition. Competitors have different opportunities and threats, which makes them unique from your business. Observing this uniqueness can help you devise smart strategies to be market competitive, and conducting competitive analysis is the best way to identify opportunities and threats.
You can gauge competitors' strengths by studying their products, customers, campaigns, and projects. You can use various tools and data providers to analyze the competition. Alternatively, you can hire a small, medium or large (enterprise) business consultant to conduct market research for you. This enables business owners to analyze the market and map the strategies accordingly.
Hiring a business consultant is a smart move if you want your competitive analysis to be professional.
How you identify your competitors is another crucial factor to be considered while conducting competitive analysis. If you don’t aim for the right competitors, your business may suffer a loss instead of the benefits you are aiming for.
In this section we will look into a few proven ways on how you can identify the right competition to analyze.
With the help of the points stated above and more, you can identify your top competitors; it is advisable to prepare templates that can assist you and your team with all the characteristics of your competitor. After you identify your competitors, competitive analysis becomes easier.
There are various competitors in the market. But are all of them your competitors? You need to identify the competitive edge of your competitor for marketing your business and have a competitive advantage over them. Understanding your competitive edge and creating a strategy out of it can lead you to acquire greater market share and a stronger brand equity.
For effective competitor analysis, the business coach needs to know all the points that make a competitor better than their business. A competitive approach and a competitor's strengths and weaknesses need to be identified in order to do a proper analysis of your competition.
The company gathers information through customers' engagement; for example, they ask them to rate their products, etc. With the information they gather, they can make a new strategy to work on gaining an advantage. The business can make the best product using all the information they gather using all their sources.
If a brand or small business is in the same geographical location and offering similar products, they are your competition. There are numerous free software and apps for the customers to find out about the best priced services, products and offers in their surroundings, both physical as well as online.
The customer now relies on the information available online and the physical presence of the business. The business can use its physical presence in a certain geographical location to its advantage and to increase its sales and customer flow. This is an important aspect on how to analyze your competitors' strengths and weaknesses.
Being in the locality also erases the language barriers. For example, if the consumer doesn’t understand English and is looking for the best products in France, the entrepreneur in Paris will know the local language and help the customer better.
Market-based view (MBV) tool/theory helps the business analyze your competitors and the market based on 4 points, which are ; Buyers' powers, Suppliers' power, Threat to substitution, and Barriers to entry. Similar to Poter’s five forces analysis.
A resource-based view is based on the tangible and intangible assets of the business and their value. Although the business is based on some capital and assets, these things become the basis of your competitor's strengths and weaknesses.
Swot Analysis is the most popular method of analysis. It stands for Strengths, Weakness, Opportunity Threats. All these 4 factors are used to analyze your competitor. First, you determine each 4 for your business and your competitor's business. Then you compare both and see who has a stronger standing in terms of opportunities and strengths.
Apart from the tools stated above, there are a lot of tools available online to analyze your competitors. Here are a few examples:
Now that you know your competitors and have analyzed their status in the market, you need to understand their weaknesses to benefit from them.
To understand the weaknesses of your competitor, you can employ a few methods.
Customers will talk about a product online in two scenarios; either they are satisfied with the usage of the product, or they are completely disappointed.
They see your competitors' products perform in the market and their demand among the consumer. The demand for your competitor’s product is their strength, as their product is better than the other counterparts present. No or low demand for a certain company's product is a weakness or can lead you to its weaknesses through a competitive analysis.
If a person is not performing in the production,they may do well in the sales team so they can be placed in the sales team. This means the company is turning its weakness into strength without extra cost or price.
The information about personnel changes is hard to get, but in the era of social media, it can be tracked through the person’s profile or the business's social media. Just keep in mind a motive to benefit your business without interfering with others’ affairs.
Once you identify and acknowledge the strengths and weaknesses of your competition, you should use the information gathered for your benefit. The competitive analysis unveils the opportunities for the business.
You can market your products or services using those opportunities. For example, firms selling shirts or clothing marketing based on gender. If you are in the same business and you know there is not much consideration for plus-size people, you can take that opportunity to grow your market share. You can market your clothes using plus-size models, etc.
Once you know the root characteristics of your competitors, you also understand your standing in the market. Your product should stand out with the help of your strategies and marketing. Build upon your strategies using the different competitive analysis tools stated in this article. The strength of competitors can become an opportunity for you to work on. A competitor analysis will also lead you to know your own SWOT. By now, you already know how to analyze your competitors' strengths and weaknesses.
There are a lot of common examples of competitor analysis. Some of them are; costs, customer experience, brand awareness, market share, etc.
A competitor analysis can lead to growth for your business as you will be able to know your opportunities, strengths, weaknesses and threats. You can plan your business strategies accordingly.
Yes. Competitive analysis is done on competitors to gain insight into their products and services and marketing strategies. This helps entrepreneurs make better decisions about their businesses and their growth.
An entrepreneur needs to know the competitors' strengths and weaknesses of their competitors to stay in the market. If the business becomes oblivious to the presence of competitors, it will become hard to survive the competition.
To analyze competitive strength, you need first to identify your competitor. Once you have identified your competitor, you can do a competitive analysis, and in that analysis, you will also get to know about the competitor's strengths. You can then compare your strengths to the competitor’s strengths to understand competitive strengths.