There’s a lot of speculation out there regarding the must-dos in making your business thrive. This is why knowing how to conduct market research and market analysis properly to use in your favor is so important. Take it one step further and figure out what your market analysis and business plan need to focus on, to see your business strategies succeed. This starts with competitive analysis—bringing the edge needed for your mission.
What is a Competitive or Competitor Analysis?
When mastering anything, we must start with the basics. Competitive analysis is a repeatable, in-depth process of market research, giving competitor insights through the eyes of your ideal clients. Competitor analysis focuses on the strengths and weaknesses of your business, your product(s), and those of your major competitors. The in-depth competitor matrix grants first-hand knowledge of the market dominance in your industry and where opportunities are being missed.
Why is a Competitor Analysis Important?
No one sums up the importance of competitive insight better than Sun Tzu…
“When you know both yourself as well as your competition, you are never in danger. To know yourself and not others gives you half a chance of winning. Knowing neither yourself or your competition puts you in a position to lose.”
Competitive analysis gives you an all-inclusive look into where you and your product(s) stand in your industry. Whether your product(s) or services are meeting–or exceeding–industry and customer standards and where you or your competition fall short. Insight into what’s being offered to your customers is a way to stake your certain claim in the ever-changing market.
With most successful decisions, first comes much thought and absorption of information. The same goes for knowing everything about the industry, market and customers you and your business are serving. Competitive analysis allows you to accomplish this and see where you stand in your efforts against the competition. Making the best, most informed decisions for your business is made possible through successful competitive analysis.
To ensure your market analysis business plan will bring the best results, book a call with Business Marketing Engine.
What Constitutes a Competitive Analysis and How to Conduct Rovner’s 7-step Process
Josh Rovner, business consultant and bestselling author of Unbreak the System, gives insight into the constituents of conducting competitive analysis. Giving vital insight into your market that can be used to empower all successful business decisions moving forward. Rovner organizes it into a seven-step guide, accentuating each key part in the process.
SWOT
Knowing where your business stands against competitors is essential, especially with how erratically changing the world–and market trends–are. The process to proper and successful competitive analysis starts with a SWOT Analysis. Using statistical data and competitor insights, SWOT can be used to ensure your business continues to grow and succeed. For more information about what SWOT analysis is check out BME’s blog for it here.
The acronym holds significance–as most do–discussing each point to focus your market analysis on, for just about any competitive situation. Below defines each key point in SWOT analysis:
- Strengths – analyzing the capabilities and assets associated or offered with your product(s) or service(s). What about it makes it unique and advantageous over the service or product competition?
- Weaknesses – it’s just as important to know where improvement is needed–gap analysis. What issues is your business facing, keeping you from opportunity? What about your competitors are keeping them from maintaining success in their business? Examples may include the inability to keep up with production costs or market demands.
- Opportunities – strategic future planning and continuously searching for opportunities is the best way to ensure the growth of your business. Where do you see the competitor’s product(s) or service(s) in the future? Where do your product(s) or service(s) stand in comparison to that, currently? Are there things you can do to keep ahead of the competition?
- Threats – any risk that could get in the way of your business’s efforts and success. Is your product(s) or service(s) in the rapidly-changing demographic in business? Are there any new competitors or innovations that will make your products or services redundant in the market?
SWOT analysis can be formal or more informal brainstorming sessions. They provide businesses in any market or industry the information and insight they need to complete the perfect competitive analysis. This step in competitive analysis is an indirect player that gives the insight to be leveraged to beat the competition.
Marketing Strategy
There’s no one-size-fits-all solution to marketing in any business. We humans–and all living things–have a need to evolve and change over time for the betterment of the species. Our marketing strategies are no different. There are, however, a few factors every business should include in their market strategy and in any competitive analysis conducted.
- SEO – “Search Engine Optimization” is the process of gaining traffic from free, organic, editorial or natural search engines. When you search about a product or service offered by your company, where is it positioned on the results page?
- Traffic Share – the percentage of visits (traffic) to your website, channel or keyword in relation to your competition’s. Calculating traffic share = number of visits to your website/ total number of visits on all websites in the industry.
- Social Media Market Campaign – coordinated marketing to reinforce or aid your business goals using the many social platforms available (Email, LinkedIn, Facebook, etc.). What kinds of social media campaign efforts are you implementing in your market strategy? What are you finding your competitors using in their social media campaigns–giveaways, events, polls, posts…?
Even with the ever-changing circumstances in marketing, one thing remains true– the importance of having a well-planned market strategy. Your business’s success relies on market strategies that include–but aren’t limited to– SEO, traffic share and social media market campaigning. Constructing and carrying out a successful competitive analysis includes the market strategy of your business and those of your competitors.
Pricing
There’s a lot of speculation about the influence prices have on the success of a business. But we’ve all experienced looking for the best price for products or services–as consumers ourselves. The cost and where the competitor product(s) fall on the scale of quantity and quality is important competitive insight. Prisync is one of many tools available to monitor and track competitor pricing.
Products or Services
Exceptional products and services are the bread and butter of marketing, especially regarding the competitive markets in every industry. Product competition can be studied deeper by looking into the design, goal and customer reviews of the product or service. Establishing the strengths and weaknesses of your competition grants you competitive insight to better leverage your business’s assets.
Unique Qualities
Standing out from the competition is a goal of businesses in their drive for product or service promotion and marketing. Leveraging these unique qualities in your marketing efforts gives you and your competitors the edge needed to stay ahead. What makes the offer(s) your competition is marketing so special? What does your business bring to the table, and why should customers choose this over the competition?
Geographic Locations
Understanding where your competitors are located and where they serve can grant important insight into your competitive analysis. Do they carry out most of their business remotely (online), or are they more primitive, brick-and-mortar companies? Knowing the geographic demographic in business is an important factor when conducting your competitive market analysis business plans.
Customer Reviews
How do the customers in your industry feel about your competition and their product(s) and service(s)? Knowing will allow you to better understand your competition’s strengths and weaknesses. This way you can be sure your product(s) and service(s) fill any gaps left by the competition. As well as plan ahead for any potential threats that seem common for competitor products and services.
Key Takeaway
Your competitive analysis should include competitor insights into their strengths, weaknesses, marketing strategies, prices, products/services, location and customer reviews. Competitive analysis is a market research method that gives businesses–like yours–an in-depth look into what you’re up against. Take advantage of any and all information you have available to you, now that you know how to use it.
For help conducting your competitive analysis market research, book a call with BME. We’ll set you and your business up with a market analysis business plan sure to bring success in your market.