In the high-stakes game of business, understanding your competition is paramount. Any organization, regardless size or industry, faces competition. In a dynamic market, it’s not enough to know your competitors, but you also need to be aware of their strategies, strengths and weaknesses.
Who your competitors are, what they’re doing and how they’re doing it should influence your marketing strategies and tactics.
What Is Competitive Analysis?
Competitive analysis is a strategic method through which you identify major competitors and research their products, sales and marketing strategies. By doing this, you can create robust business strategies that improve upon your competition’s.
It’s important to understand that analyzing your competition isn’t a one-time event but an ongoing process of observation, analysis and adaptation.
A Detailed Approach to Competitive Analysis
Here are the most important steps you should follow when analyzing your competition.
1. Identify Your Competitors
First, you need to identify who your competitors are. Look for businesses that offer similar products or services or that are targeting the same demographic as your company. Consider direct competitors (same products or services) and indirect competitors (alternative solutions to the same problem).
2. Study What They Offer
Explore the products and services they offer. Look at the features, benefits, pricing, etc. Understand what makes your competitors’ products unique or appealing to their customers. What are their selling points?
3. Research Their Market Positioning
How do your competitors present themselves in the market? Explore their value propositions and brand messages.
4. Examine Their Customer Base
Who are they targeting? What is their market segment? Do they focus on a specific demographic or geographical area?
5. Analyze Their Pricing Strategy
Knowing how your competitors price their products and services can help you position your own products or services effectively in your market.
6. Understand Their Sales Tactics and Channels
Investigate how your competitors get their products to their customers. Do they use brick-and-mortar stores, ecommerce platforms, or both? Do they distribute through other retailers?
7. Evaluate Their Marketing Strategies
Research the marketing channels your competitors are using. Look at their online presence: are they using SEO, PPC, social media, content marketing or traditional advertising? Assess their websites, blogs, social media pages and online reviews. Their approach can show you what to do and what not to do with your own marketing efforts.
8. Study Their Promotional Strategies
Look into their advertising, public relations, sponsorships, events, and other promotional activities. How are they attracting and engaging audiences?
9. Assess Their Strategic Partnerships
Check if your competitors have any strategic partnerships that provide them with a competitive advantage. These partnerships could be with suppliers, distributors or other companies that complement their products or services.
10. Identify Potential Threats From Your Competitors
Keep an eye out for any potential threats that your competitors could pose. Are they planning to launch new products or services that could disrupt your business? Are they expanding into new markets?
Making Use of Competitive Analysis
Once you’ve gathered all this information, what’s next? Here are three ways to make use of your competitive analysis.
1. Identify Gaps in the Market
By understanding what your competitors are doing, you can find their weak points and identify areas that they have overlooked and develop strategies that take advantage of those opportunities.
2. Improve Your Products or Services
Use the insights gathered from the analysis to enhance your offerings. If you know what your competitors’ customers value, you can tailor your products or services to meet these needs.
3. Develop a Unique, Powerful Value Proposition
With an understanding of your competitors’ strengths and weaknesses, you can craft a unique value proposition that differentiates your business from others.
Company A in the healthcare industry found that its competitor, Company B, established a partnership with a renowned medical research institute, which increased Company B’s credibility. As a result, Company A decides to partner with a well-known health non-governmental organization (NGO), achieving a similar increase in its reputation.
Case Studies and Tools
Research case studies of businesses that have successfully conducted a competitive analysis. For instance, how Samsung used competitive analysis to gain a significant market share from Apple in the smartphone industry.
There are also numerous tools available that can aid in competitive analysis, such as SEMrush and Ahrefs, which help analyze competitors’ SEO strategies, and SimilarWeb, which can give you insights into their web traffic.
Understanding your competition is a critical component of running a successful business. By taking the time to conduct a comprehensive competitive analysis, you can gain valuable insights that can shape your business strategies. Remember that the aim is not to imitate your competitors, but to understand their strategies and innovate your offerings for market dominance.
For assistance with competitive analysis or any other aspect of your marketing strategy, talk to us. At Gravital, we take pride in our exhaustive, second-to-none competitive analysis process.