How much do you know about competitors?
Perform a competitive analysis to find out. Research who your competitors are – their resources, offering, positioning, customer touch points, and key success factors – so that you can develop a strategy to overcome their advantage. Several competitive analysis tools are available to help you analyze research collected and anticipate competitor moves to stay one step ahead. After you have the basic framework completed, you’ll need to maintain it.
The tools you use to develop your analysis may depend upon your bandwidth and resources. Performing a thorough competitive analysis can be time consuming, but it’s critical to any business’s success.
Who are your competitors?
Identify your top 3 to 10 leading competitors, assessing the 4 marketing P’s – product, price, place, promotion – from your competitor’s perspective. Use primary and secondary resources to research their capabilities and anticipate their market moves. The type of information you want to uncover includes:
- Do they offer substitutes or do they directly compete with your offering based on features and customer benefits?
- What barriers to market entry exist?
- Which markets do they focus on and what trends impact those markets or industries?
- How much market share or ‘mind share’ do they have?
- Who do they sell to and how?
- How much revenue do they achieve annually, and how much do they budget for operating and marketing expenses?
- Do they operate in a mature market or growth market?
- How much rivalry is there on price or on having excess capacity available?
- Where are they weak and strong relative to your business offering?
- What opportunities and threats do they face that your business does not?
- What is the perceived quality of their products and services relative to your business offering?
- What is their company culture like? Are they risk takers, risk adverse, technology advanced or savvy, etc.?
- What is their financial outlook – sales, profit, operating costs, debt, public vs. private ownership, current capital investments that can be leveraged, etc. – and do they have the resources to commit to gaining market share?
- Do they have strategic or channel relationships that help them speed their product or service to market?
- Do they have strategic, channel or customer relationships that hinder goodwill or have ‘bad press’ that is impacting their ability to sell more services or products?
- Which locations do they operate from that may impede or detract from your current sales?
- What bargaining power do they have over suppliers or distributors?
- Are their operations streamlined or complex – i.e. how difficult are they to do business with?
- How experienced is their management team?
- Do they have financial backing to invest in new markets or grow operations to quickly meet demand?
With competitor insights in mind…
Refine your customer messaging. Focus on the benefits you bring to customers whether it’s your product/service features, capabilities, delivery method, aesthetics, or price. Downplay your weaknesses and threats to your business. Take in to account your customer touch points (collateral, advertising, sales promotions, branding, plus more) and keep in mind those of your competitors to ensure you’re covering all the relevant ones where you compete.
Forecast your competitor’s future moves based on the information collected. Soon your messaging will help your business start chipping away at their strengths.