Why Competitor Analysis is an Essential Step in Achieving Results
Author : Admin
In today’s scenario, none of the brands solely runs a business idea. Several others in the market are successfully dealing in the same. Although you belong to the same industry, why are your competitors preferred by customers more than you? You need to have an insight into the strategies that are working for them, adopt and improve yours to be in the market.
You will have to look through your competitors and how they are performing to determine your position. Process a thorough analysis known as Competitor Analysis for your business’s success. Learn about what competitor analysis actually is, who your competitors are? What are its benefits? And, why is it important to conduct competitor analysis?
What is a Competitor Analysis?
Competitor analysis is a business strategy that involves identifying your major competitors in the market, determining their strengths and weaknesses in relevance to your brand by conducting SWOT, and studying their ins and outs. The study includes in-depth research of:
- Their industry segments, range of products and services they offer
- Marketing Strategies they use & execute
- Overall Sales & sales strategies
- Business tactics they are likely to implement in future
Doing detailed research would enable you to create improvised ways to deal with the market than the competitors. It would ensure your product or service stays at the top amongst the industry and is preferred by the customers. The purpose of the analysis is not to copy your competitors’ strategy but to set your own business standards and go-to-market strategy.
This would also make you identify potential opportunities where you can beat them. For better results and growth of the brand, a business needs to undertake this. For conducting analysis, you require a list of your competitors. But who are your competitors?
Who are my Competitors?
For implementing a smooth and effective competitor analysis, you need to determine your competitors. There must be multiple competitors in the list, but who are the actual ones? Analyzing and comparing with the real competitors will help in bringing accurate results. How to do it?
You will need to divide your competitors into two categories that are:
Who are direct competitors? Direct Competitors include businesses that offer similar products or services and operate in the same market as yours.
Indirect Competitors include businesses that offer different products or services but could satisfy similar needs and solve similar problems of the customers.
While conducting a competitor analysis, you should only focus on your brand’s direct competitors because these tend to be the real threats to your business than indirect competitors. As there is no such variation in the target audience, product, services, customer needs they want to fulfill, etc.
For example, McDonald’s and Burger King are the direct competitors. Burger King can anticipate McDonald’s next move, strategies, and improvement areas as they deal in similar product lines. It could give Burger King insight into targeting a larger audience, gaining a bigger market share, and improving sales.
This does not mean you have to ignore your indirect competitors like KFC or Dominos for Burger King. As they can anyday, anytime switch their strategies and enter the zone of direct competition. So, you need to be aware of the changes for being in the market. Once you know who your brand’s competitors are, consider conducting a Competitor Analysis, important for your business. Let us know how.
Importance of Competitor Analysis
Do you know why competitor analysis is important and plays a crucial role?
Most of the time, a business is confident enough about its own products and services that it doesn’t realize that there are better options available in the market. As they end up looking and assuming things from the internal perspective, their growth and marketing stagnate.
Businesses make preconceived notions that make them limited to themselves. They keep on assuming things about people they are marketing to revolve around only their industry and features of their product and services. But a competitor analysis allows a business to explore and look at the market and business from outside. Thus, enabling a business to observe and evolve with time and trends.
When it comes to SEO, it is an important part of every business. So, a business should conduct a competitor analysis for SEO. Several brands rank higher than you do on Google. So how can you gain that spot? To know where you stand in SEO analysis, you will have to perform a detailed study on the industries that rank well and find the best working keywords.
To rank higher by spending less and claiming the largest ROI, keep track of your competitors’ approach to keyword research. Thus, the implementation of analysis will attract more traffic to your website. Also, Competitor analysis comes with a series of benefits.
Benefits of Competitor Analysis
Competitor analysis is an asset for the organization and would benefit you with:
Developing Better Understanding of the industry
Customers’ tastes and preferences do not remain static but keep evolving with the industry’s latest trends. You may miss out on these trends, but competitor analysis would help you upgrade your knowledge and get accurate ideas about the market and what customers are actually looking for.
Competitor analysis will help you discover gaps in areas within the market or segment where your competitors have not reached out and served yet. You could take advantage of this opportunity and make a way to new customers and new markets by offering your business’s products and services in the prospective markets.
Creating a business plan
When you undertake the competitors’ research through Competitor analysis, you will easily create a masterplan for your business. As the detailed study about their activities and trends would gain you experience and knowledge that will enable you to perform better and develop powerful strategies for your own business that would make it reach to the heights in future.
Boosting marketing processes
If customers are choosing your competitors’ products, what does this mean? It means your products are not providing any value or solution. Because every customer is concerned with buying products that could make their life easy. Even if your products are unique and will definitely offer a solution, they are unfortunately not reaching the customers’ attention.
Through competitor analysis, you could gain a better behavioral understanding of the customers and of competitors’ strategies, with the help of which you could modify your current approach of targeting customers.
Another benefit you could derive through competitor analysis is, know your competitors thoroughly, know their every movement and mistakes they must have made. While analyzing, you understand those things and avoid repeating them and protect yourself from falling into the same pitfalls.
Need Some Help in Stacking up against your Competitors?
Competitor Analysis is a profitable investment. We hope that the information mentioned earlier about its importance, benefits, and purpose guides you to know who your competitors are and create one for your business.
And, if you are unable to do it on your own, you can hire us to do a successful competitor analysis as with our unique expertise, we know how to get it right and develop growth strategies to find an edge for you in the market. So, take the decision wisely for deriving efficient and effective results.