Competitive analysis by the name itself it’s clear that it is something that has to do with competition and analysis well yes!! It’s a process of finding out your competitors and then analyzing them i.e. their products, strategies, sales, or marketing and getting to know their pros and cons to improve yours.
The main idea behind this competitive analysis is to understand our competition much better to make our company much more effective by outsmarting them. This may seem simple by the definition but it’s a lot complex process as it involves a ton of metrics and business aspects. And a study states than 40% of businessmen agree than this analysis to be an effective one.
So, here’s a step by step guide that would help a company in identifying the key element in an analysis;
Step 1- find out the competitors:
In this busy world no one has time to sit and find all the competitors out there in the industry, so let’s divide competitors into two types;
Direct competitors: these are the competitors who offer similar products or services in the market, or who operate in the same geographical area as yours.
Indirect competitors: they don’t sell the same products as yours but still could satisfy the same needs of customers.
With this being cleared, a list of 15 top competitors would do. Let us move to the next step.
Step 2- analyzing market positionings of the competitor:
This step involves analyzing the way your competitor would offer his products to the targeted consumers who are your yours too.
Gain creators ~ customer gain
How the competitor is offering his value-added proposition to the customer.
Pain ~ pain relievers
Pain is the problems caused. Pain relievers are solutions to solve them.
Step 3- analyzing the content of competitors:
Content is the key for everything is the current moto, therefore analyzing the kind of content the competitors are using could be a flashlight in the dark.
- Focusing on the competitor’s Instagram posts, podcasts, stories, blogs, videos on YouTube.
- The quality of content, when compared to yours, should be checked.
- Their frequency in updating and publishing new ones.
- If they are trying out new stuff that you are not.
All of these should be analyzed properly to get proper insights.
Step 5- competitors price
Price of their products and service should be analyzed and kept in watch as any variation in their pricing would affect your business too.
Step 6- their strengths
Strengths such as;
Size of company
Social media involvement
Product or service quality
Step 7- their weakness:
Weakness such as;
Cost of goods sold
Weak cash flow
Low online presence
Not so efficient sales team
Should be analyzed properly.
Step 8- find out good opportunities:
From the above-analyzed weakness of your competitors create new opportunities for your company.
Step 9- spot out the threats:
From the strengths of your competitor, your threats can be identified and eliminated.
Step 10- strategy formation:
Now with the help of all the above steps the company could finally form a successful strategy that could be flawless, with the data from the competitive analysis.
For a company to grow firm, it is important to know their competitors like their own hand thus using competitive analysis would increase the efficiency and bring in more revenue ultimately.