A business is not alone in the market. There will always be at least one competitor that will offer similar or the same products as you do. But, in these cases you need to find a way to differentiate yourself from them and be in the spotlight. This is when competitive analysis enters the game. A competitive analysis is the process of spotting other companies in your market that are similar to yours and evaluate them based on some specific criteria. After your analysis is done, you will have a better understanding of the competition and your place in the market.
It is really important for a company to periodically perform a competitive analysis. It will help you with always being updated about current trends and you will be aware of any new businesses that may enter your market. Moreover, it is critical to know what your clients think of you and what they think of the competition. Through competitive analysis you will be able to know that and, also, you will learn more about your clients’ new requirements. This way you can start thinking of a new product or service you can create or how to alter your existing product to keep up with their needs.
Competitive analysis, the benefits
A competitive analysis can only benefit your business. The important thing to remember is that is not an one-off process and you are done, but you have to perform it regularly to always be up-to-date. A competitive analysis can provide you powerful knowledge to detect new untapped opportunities in your market. Once you analyze your competitors and then look back at your company, you can spot all your similarities and differences and this will help you strengthen the parts that your competitors outweigh compared to you. You cannot achieve future growth and find out what you are doing wrong without that analysis.
Features included in a competitive analysis
A competitive analysis should not be restricted to just a SWOT and a PEST analysis. These are fine for the beginning, but you have to include as many factors as possible to get the best result. There are 10 important components that every competitive analysis should contain. First is the feature matrix, which is the features that every competitor’s service or product offers. Next is each company’s market share, so you can know who are the strongest and who are the weakest players in the game. How much they charge for their product or service is also a critical component to be included.
Moving on it’s the differences that they have with one another and what makes them unique. Taken from the SWOT analysis concept, your competitors’ strengths and weaknesses are very important for you to know, because they can help you get a competitive advantage over them. Then, there are sociological components, such as culture and geography. You need to know which regions your competitors cover and where they are located. Also, you have to be aware of their company’s culture and how they please their customers. Last but not least, search for client reviews. They can provide you with some very useful insights. Keep in mind that the 3-star ratings tend to be the more honest.
A competitive analysis will provide you useful information that can highly benefit your business in many aspects and take it to the next level.