What Exactly Is Competitor Analysis?
How To Leverage It For Your Business Growth!
What exactly is Competitor Analysis?
In business, if you intend to stay ahead, you need to have a keen understanding of not just your own strategies, but also those of your competitors.
How do you know and understand your competitor's strategy? It is by conducting a thorough analysis of your competitors from time to time.
Competitor analysis is a strategic evaluation process where you gather and analyze information about your competitors in the market.
This isn't just about knowing your rivals; it's about using that knowledge to your advantage.
That is, knowing your competitors isn’t just about keeping tabs on them, it’s about using every piece of information to get ahead.
Businesses that conduct thorough competitor analysis are 3 times more likely to experience significant growth compared to those that don't.First of all, what is the aim of conducting competitor analysis?
You can conduct competitor analysis for various reasons;
Understanding your competitor's strategy
Identifying how your competitors position themselves in the market
Assessing competitor's strengths and weaknesses
Revealing your competitor's unique selling point
Gaining insight into how your competitors deal with their customers.
Now that you know the various aims of conducting competitor analysis, how can you get the most from the analysis?
Competitor Analysis is a critical process, and here is how you can get the most from it;
Understanding the purpose of analyzing a particular competitor
Competitor analysis involves a systematic examination of your rival, right? So when doing this, keep in mind why you are analyzing, just so you don’t miss it or get carried away.
Are you analyzing their strategies, strengths, weaknesses, market positioning, and performance metrics, better still write a list of what you want to analyze.
Identify Key Competitors
The next thing to do is identify your direct and indirect competitors. Direct competitors offer similar products or services, while indirect competitors might cater to similar needs but through different solutions. Consider both, as they impact your market share and strategy.
Analyzing Competitor Strategies.
As soon as you have a list of your direct and indirect competitors, begin to evaluate your competitor strategies across various points. This includes product offerings, pricing strategies, marketing tactics, distribution channels, customer service, and market positioning. Understanding their approaches sheds light on industry trends and best practices.
Perform a SWOT analysis:
Perform a SWOT (Strengths, Weaknesses, Opportunities, Threats) analysis for each competitor. Assess their strengths to learn what they do exceptionally well, identify weaknesses to capitalize on, spot opportunities they might have overlooked, and understand threats they face or pose to your business.
Identify Your Competitor’s Market Positioning And Unique Selling Point:
Analyze how your competitors position themselves in the market. Identify their unique selling propositions and how they differentiate themselves. This analysis is done just to help you refine your own USP and set your brand apart.
Look Into Your Competitor’s Customers
Gather information on how competitors engage with their customers. Review customer feedback, testimonials, and reviews to understand their strengths and areas needing improvement. This insight helps in refining your customer engagement strategies.
Another Study says: companies using competitor analysis tend to secure, on average, a 6% greater market share in their respective industries.
These companies don't just secure greater market share because they conducted competitor analysis, they secured it because they used the information garnered and leveraged it to grow their market share.
You need to know how to use the information garnered from competitor analysis.
Analysis is one phase, and executing and implementing is the most important phase, so I will take you through how to leverage the analysis you conducted for your business growth.
Identifying Gaps:
When you are analyzing your competitors, Identify areas where competitors fall short or have gaps in their offerings. Address these gaps to cater to unmet customer needs.
Benchmarking and Improvement:
Benchmark your performance against competitors to identify areas for improvement. Learn from their successes and failures to enhance your strategies.
Innovation and Differentiation:
Use competitor analysis to build innovation. Identify opportunities to innovate and differentiate your products or services, setting yourself apart in the market.
Strategy Refinement:
Fine-tune your marketing, pricing, or distribution strategies based on competitor analysis. Adjust your approach to capitalize on competitor weaknesses or market trends.
If you take this seriously and implement it, I will advise you to track your growth for three months and see the difference it will make.
P. S. - Competitor analysis isn't a one-time task. Markets evolve, and so do competitors. Continuously monitor your competitors, adapt your strategies, and refine your approach based on ongoing insights gathered from competitor analysis.
If you feel stuck and not sure you have enough clarity to analyze your competitors or how to make use of your analysis for your business growth, book a clutter-to-clarity session here.
Let's discuss your business and get you enough clarity to start well for the new year ahead. You don't want to get into a new year with zero or little clarity.