A competitive analysis is a critical part of any business marketing plan. It refers to the process of identifying and evaluating your competitor’s marketing strategies and comparing that information with your own approach.
An online competitive analysis is not an attempt to “spy” on the competition; it is a method of discovering the strengths and weaknesses in your own marketing efforts. It is a helpful method for uncovering new opportunities and it gives insight into whether a strategy worked for a similar company. Performing a competitive analysis can be an extremely complex or very simple process.
8 steps of a thorough competitive analysis:
• Identify your competitors
• Identify products and services that align with your business
• Determine the winners (who has the biggest market share?)
• What are the winners doing now and what have they done in the past?
• What tactics are they using currently? (digital and traditional)
• Identify strengths and weaknesses of each competitor’s offerings
• Identify any threats your competitors pose to your business
• Identify the opportunities that may be available to you based on your analysis
How to use the information from your competitive analysis to develop new marketing strategies:
Once you’ve started gathering and bucketing information the true analysis begins. Sometimes a simple comparison chart is the best way to start. A comparison chart will help to visualize the differences between products and depending on what you offer, it might be a good chart to use to market your product. This can also be done on a company basis as opposed to a product differentiation. You can list each competitor across the top and along the right hand side list out important information about each company such as: products offered (price, size, method, etc.), delivery options, current marketing tactics, estimated budgets, areas served, and customer service options among others. Once the competitor analysis grid is set up it will become much easier to identify areas of opportunity and weakness. The business leaders can use this information to make marketing changes as well as overall business changes if the need is great enough.
Remember, your competitors are analyzing you as well.
Remember, there is a good chance your competitors are looking into what you are doing as well. We live in a free market and there are always going to be market changes. It could come as new competitors, changing competitors or just plain old industry changes. That’s why a true competitive analysis is not a one and done type of analysis. It should at least be done on and annual basis. The information garnered from the analysis can help shape your future success. Making the data available to everyone throughout the company can have major benefits including a better understanding of the business and the contribution of fresh new ideas from employees.
Understanding your competitors is often times the first step to better understanding your own business. It helps reinforce your strengths and find solutions to your weaknesses. It will also help indentify industry threats and possible opportunities. Making the investment of time and resources into developing a thorough competitive review will be wealth forth the time and effort.