Competitor analysis is a long-term management program that entails an assessment of the strengths and weaknesses of available potential contenders relative to those of your services or products. It’s a fundamental portion of your advertising plan. With this evaluation, an organization can establish features that make their products unique as well as identify attributes to play to attract its target market.
Competitor analysis relies on establishing a model that will generate higher profits for an organization eliminating the effect of delivering substandard products compared to that of your competitors. To understand this, an organization does a SWOT analysis which is essentially identifying the strengths and weaknesses of a firm. It also helps in identifying possible threats and opportunities that the business may face due to external pressure. Having the know-how on this helps you to design a convincing marketing strategy to undertake your undertaking.
The most common analysis blocks include; prices, promotional expenses, product contents, branding and packaging, distribution channel, and level of market share.
Basics of competitor analysis.
Competitor analysis is so critical in any selling policy. Having done this analysis, an organization can formulate a long-term strategy to run a business. An effective analysis plan not only is beneficial to an organization but also satisfy customer requirements and should be done by first understanding your current and future competitors.
The most basic analysis tools include;
- SWOT Analysis-it’s commonly used means of analysis. You majorly identify the strengths, weaknesses, opportunities, and threats. Through this analysis, you understand what you have to do to eliminate the risk of business failure. It also helps an organization craft a strategy that will make it unique and different from its competitors.
- Once you have studied all four aspects of SWOT, you’ll likely be faced with a long list of planned activities to take. That includes; build on your strengths, improve your weaknesses, face many threats, and adventure each opportunity.
- PEST Analysis-it entails political, economic, social, and technological factors. It’s done to understand and know how to react to changes
- Competitor Array-in this you follow chronological and straightforward procedures that include;
- Defining the industry- understand the nature and scope of market firms are operating.
- Identify the competitors- find out a potential competitor that suits your level.
- Establish customer base-examine and evaluate their expectations and well as brand loyalty.
- Write down success factors.
- Grading and weighing the available success factors.
your competitors effectively and efficiently.
- These procedures will help you identify and realize which competitor has the highest power in the market and make marketing plans centered on them.
Features of competitive analysis.
- Before you thoroughly examine the competition base you must familiarize with some of the essential features that include;
- Competitors-These are individuals who supply the same product as your organization.
- Customers -they are users having a common characteristic on a given product.
- Demand –it’s a real need and wants that requires to be satisfied.
- Product-it’s an item/service that your organization will guarantee supply at a given demand rate and a given price.
Types of competitors in competition analysis.
- Market leader: leads other businesses in price alterations, supply coverage, and advertising expenditure.
- Market challengers: those that are struggling hard to increase their market share.
- Market followers: They pursue profits by following competitors’ products, prices, and marketing plans.
- Market nichers are firms in an industry that serve small segments in the market.
Advantages and disadvantages of competitor analysis.
There is a chain of business assistance you can gain by having awareness into the competitive setting on an ongoing basis that includes.
- You set product charges based on new and precise from competitors.
- Easy to spot market gaps and existing potential ventures.
- It Opens up for useful resource budgeting.
- Regular examination aids in the incorporation of marketing strategies with business objectives.
- Potential business acquisition.
Although having numerous benefits, a competitive analysis has some criticisms that includes;
- Incorrect and inaccurate data can lead businesses to create faulty business strategies.
- The analysis is more complex and time-consuming.
- A company becomes less innovative by overlaying on competitors.
Tips for setting a practical competitor analysis.
- Identify your potential competitors.
- Analyze and compare competitors’ provisions.
- Do perfect product differentiation.
- Make realistic business targets
- Do regular analysis to identify new ideas.