Why should you bother with a competitive analysis? The reason for completing an analysis is simple: so you can gain an advantage over your competition. Knowing your competitors’ strengths and weaknesses gives you an advantage to both differentiate yourself and to take advantage of opportunities resulting from your competitors’ weaknesses.
What is a competitive analysis? You can put a lot of fancy words around it, but the bottom line is that a competitive analysis is a comparison of how your organization stacks up against the competition in your market. It should objectively tell you why a prospect would choose your organization over a competitor and vice versa. Once you can identify which type of customer is more likely to do business with you instead of your competitor, or why a competitor’s existing customer may be interested in switching to your products or services, you can more clearly define, target and ‘talk to’ your intended market audience. This becomes the basis for your traditional and social media strategies.
How often should you complete a competitive analysis? The most obvious time to run a competitive analysis is before entering the market place with a new product or service. However, by only completing an analysis when launching a new product or service, you are missing out on changes in the marketplace. We recommend that you complete an analysis on your key competition at least annually. However, you should keep your eye out for major changes in your competitors and run a new analysis if any of these occur.
These changes can include:
- Change in C-level staff
- Launch or elimination of products or services
- A new game player in your market
- Any legal proceedings having to do with your competitors
- Any large capital investment by your competitors
How can you go about completing a competitive analysis? The number one reason why smaller organizations do not complete, and thus do not benefit from, competitive analysis is that the process can seem complex and intimidating. That does not have to be the case. Start small and increase what your analysis includes over time.
Following are 10 steps to help you start an analysis:
- List the competitors in your market
- What products/services do they offer that you do not
- What products/services do you offer that they do not
- Are there skills or areas of expertise that your organization has that your competitor does not
- How does your pricing compare
- How would you define quality
- What is the overall reputation
- What is the key advantage each competitor has in the marketplace
- What key challenge is your competitor experiencing
- Other comparisons to consider: service, location, image, stability, reliability, any other criteria important to you or the market place for your industry.
Where do you go to gather the information? With the internet the options are limitless. One suggestion is to set a Google Alert for each of your competitors so that you are notified when there is news on the competitor or a key executive team member.
Listed are additional types of sources:
- Official Sources: Annual reports, press releases, articles and various regulatory or government reports
- Advertising: Pricing lists, websites, social media, promotions, advertising, newsletters, and patent applications
- Other: Attendance at seminars, trade shows, their suppliers, competitors contacts and/or ex-employees
If running an analysis still seems daunting, consider hiring a third party marketing firm for assistance.
Now what? Put it all together to track the results. Tracking and analysis can be as easy as capturing the key results in a table. Where do you see weaknesses or opportunities? Where do you see strengths that you realistically may not be able to cost effectively compete with at the present time? Once you determine what your advantages are over your competitors, you are prepared and ready for battle!
About the author: Autumn Edmiston is the CEO and owner of the Edmiston Group ~ The Edmiston Group provides senior level marketing management services to businesses and non-profit organizations on a short or long term basis. Core areas of service are business development, marketing, strategic planning and public relations. The Edmiston Group has consistently delivered and implemented real-world, proven business marketing ideas and strategies for business growth.