In a crowded marketplace, it is inevitable that there would be other companies out there offering a similar product or service like yours. To maintain a unique identity, you need to do competitor analysis to have as much information and insight as possible to excel and exercise your control over your competitors.
To understand how responsive the market is to your business and what strategy will work or not work, you need to know how similar companies are functioning. You must have a clear idea and recognise your mistakes to deal with the shortcomings and discover various trends that you can use for your business strategies.
Before any further discussion, let us know what a competitor analysis is.
What is a Competitor Analysis?
A competitor or a competitive analysis is a method of identifying and analysing the competitors in your industry to evaluate their different marketing strategies. By following this procedure, you can assess the strength and weaknesses of your competitors and refine their strategies to outgrow your business.
Guide to Perform Competitor Analysis
Mentioned below is a guide on “How to Perform a Competitor Analysis in Entrepreneurship”. This may be essential for your startup process if you have started a new business.
How To Identify Your Competitors?
For doing a competitor analysis, you need to know who your competitors are. So, do proper research and make a list of your direct and indirect competitors.
Your direct competitors are the one who sells similar products and services and targets the same pair of potential customers. At the same time, your indirect competitors are the ones who sell different products and services but target the same potential customers or who sell similar products but target a different set of potential customers.
Knowing your indirect competitors is also essential as it helps you analyse your business model from a different perspective. Make sure to include both the market players and the newbies of your niche in the list. Doing this would assist you in knowing their mistakes and tracking the new strategies they are working on.
Examples of Direct Competitors:
- McDonald’s and Burger King
- Domino’s and Pizza Hut
Examples of Indirect Competitors:
- McDonald’s and Domino’s or Pizza Hut
- Burger King and Domino’s or Pizza Hut
Perform SWOT Analysis for Your Competitors
Once you have listed your competitors, the following step is to identify their strengths, weaknesses, opportunities, and threats. While performing the SWOT analysis, it is essential to understand four basic pointers,
- How could you use your competitors’ strengths for the growth of your business?
- How to take advantage of the weakness of your competitors?
- How to grab the opportunities your competitors have missed out on?
- And, how to avoid similar threats for your business?
Once you have answers to all the above questions, you are ready to make an entry into your niche. SWOT analysis is crucial to creating business strategies to conquer the market.
Analyse Competitors Online Presence & Reviews
An amazing user experience is one of the main criteria to survive in the era of online business. You cannot expect to receive a large number of orders from your e-commerce store if your customers don’t find it easy to search for products and place orders on your website. So, try to analyse your competitors’ websites and find out how you can improve the user experience of your website.
Next, search for consumer reviews on various social media platforms and review websites and find out what the customers are saying about the competitors’ products and services. Also, look out for customers’ valuable suggestions and try to implement those on your product.
Observe Your Competitors’ Pricing Policy and Offers
With the help of perceptual mapping, spot the price range at which your competitors are offering their products and services. Based on the research, decide the pricing strategy for your business.
You can either offer your products at a similar price range or at a comparatively lower price to grab a large section of the customers. For example, Jio created new demands and captured the market because of its pricing strategy.
However, it is not true that customers always look for cheap products. As per the data, 43 percent of people are willing to pay more for a better service. For example, Apple has never compromised on their price, but people are still willing to buy its products because of its premium services.
Evaluate Your Competitors’ Customers
During the analysis of your competitors’ online presence, if you come across any negative reviews posted by any customer, try to reach out to them and find out what they require and why they faced a bad experience with your competitor.
By doing so, you would give the customers direct attention, leading to a good customer relationship in the long run. Basically, you could utilise the opportunity and assure the customers that you can accomplish their unfulfilled needs.
The importance of competitor analysis is far-reaching and a never-ending process. It enhances your business strategy and guides you about how you can outperform your competitors. Utilise the tool properly and follow the steps meticulously so that you can keep yourself a step ahead.