How to do a Competitive Analysis
How to do a Competitive Analysis
It’s important to analyse your competitors so that you know what their strengths and weaknesses are and how they are positioned in the marketplace so that you can develop strategies that will improve your competitive advantage.
What is a competitor?
Any company selling similar products or services as yours or substitutes for your products or services are competitors. Those selling similar products are direct competitors while those selling substitutes are indirect competitors.
If there are many competitors, analyse the top 20% of your competitors that sell to 80% of the customers (those with the biggest market share).
How to analyse your competitors:
- Identify their strengths
- Identify their weaknesses
- What products do they have?
- What are their products’ features and benefits?
- What is their pricing?
- What is their offering (guarantee, after-sales service, added value etc)?
- What does their packaging look like?
- Where do they operate?
- How long have they been in business?
- Are they profitable?
- What is their market share?
- Are they expanding or scaling down?
- What are their working hours?
- What is their marketing strategy?
Where can you gather information on competitors?
This list will help you identify ways of getting information about your competitors:
- The Internet
- Sales brochures
- Events they hold
- Annual report
- Quotes
- Contracts
- Customers if you can access them
- Ex-employees if you can access them
- Your network
When you know what your competitors do and what they offer, you will be able to identify ways or places that you can be competitive in.