Contributed by Independent Bank
Businesses often have the primary goal of growing and profiting, and there are several ways they attempt to do it. Between business plans, marketing, and creating an online presence, the all-important competitive analysis can take a backseat. However, a competitive analysis has incredible benefits, and can be your secret weapon for success.
What is a Competitive Analysis?
To do a competitive analysis, it’s helpful to understand what it is. As Entreprenuer.com puts it, competitive analysis is:
“Identifying your competitors and evaluating their strategies to determine their strengths and weaknesses relative to those of your own product or service.”
Basically, look toward your most successful (or unsuccessful) competitors, and take note of how they do things. Look at their online presence, their customer experience, what sets them apart or makes them unique, as well as their pricing. Each aspect of their company will let you gain insight into your own company.
How do You Create a Competitive Analysis?
Creating a competitive analysis doesn’t have to be complex. In fact, with the Internet, there are many resources that can walk you through how to create one. A few steps you’ll want to take are:
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Identify your competitors
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Put your competitors into strategic groups—who are your biggest competitors, your lesser competitors, most successful, etc.
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Identify what strategies, past and present, have they used
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Look at what media and marketing they are using
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Look at how much effort, time, and content they put into media and marketing
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Identify their strengths and weaknesses
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Consider their threat level to your company
How Can a Competitive Analysis Help Your Business?
A competitive analysis is well worth the energy and planning it requires. Some of the top reasons for conducting a competitive analysis are:
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It leads to self-awareness and self-discovery – Each company has something that sets it apart or makes it stand out from the competition. Looking at how your competitors do things also allows you to discover all sorts of information about your own business. If you find you are just ‘one of the crowd,’ the competitive analysis will push you to look at your own strengths and weaknesses, work to create better value and customer experiences, and define what makes you unique. It can also help you become an authority in your field.
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It creates awareness to new trends – Industries and businesses are constantly evolving and changing, and it can be easy to get left behind in the dust. A competitive analysis can create an awareness of what is trending in your market and let you adapt and evolve and stay part of the current scene.
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It allows you to find a niche – Maybe your competition has one service or product that makes them special, but a competitive analysis also lets you discover what your niche is, or a niche you can adopt. Maybe in looking at all your competition, a hole in the market will become glaringly obvious, and then you can fill it.
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It can help build your brand – Branding is a huge part of today’s marketing, and by looking at competitors, you can better identify and build your own brand. Look at what differentiates you (or what makes your company what it is). You may even find that you’ve been inconsistent. By seeing how others brand themselves successfully you can work on branding your own company better.
A competitive analysis is a great tool for encouraging success in your own business. Make sure to conduct them consistently and continue to evolve, expand, and grow.