A competitive analysis is a crucial part of the research and planning phase for companies who wish to improve their business. Competitive analyses allow companies to view their competitors’ offerings in direct comparison to theirs.
Importance of Competitive Analysis
As a burgeoning business you need a thorough competitive analysis because it will help:
Understand how your customers and potential customers use and rate the competition;
Provide you a starting point for producing dependable viable marketing strategies in your target market.
Competitive Analysis: How To
Start by producing a list of companies who you believe are your closest competition or who could potentially move into your market. We have produced a two part vlog series that goes more in depth on exactly what to do next:
When constructing a competitive analysis, it is important to choose a list of features that accurately represents not only the tools your company offers but also the features that most other companies offer.
By merely including features that your company offers, you are not outlining the scope of the competition, and are thus limiting the efficacy of your competitive analysis.
Although this process can be tiresome, it is necessary to identify where your competition may be surpassing you as well as what advantages you have over your competition. Developing takeaways will help identify these strengths and weaknesses. From there, you can improve your marketing plan by putting greater influence on the features your company offers and finding ways to implement features your company doesn’t offer that seem crucial to gaining customers.
Using a Competitive Analysis to Define Your Market
Many people may believe that a competitive analysis is redundant because they feel they already have a good idea of who their competition is and what they offer. But a competitive analysis can also be applied when trying to break into a new market. By conducting a competitive analysis for an environment you are unfamiliar with, you are able to model a new business that includes many features that your competitors will possibly offer as well as some special offers that may drive customers away from their typical company.
Further Benefits of a Competitive Analysis
A competitive analysis can also identify which features your customers may need. If a company who is offering a product or feature that no other company in that space is, and is widely successful, they’re doing something right. Try basing your tools, products or features after them.
Competitive analyses are just one of the first steps in a company’s research and planning, but they are clearly key components in instituting your marketing plan. You should also be identifying your buyer personas, and we made the perfect downloadable workbook to get you started!
What are your thoughts on competitive analyses? Let us know in the comments below!