Staying Ahead of the Game: A Step-by-Step Guide to Conducting a Competitor Analysis
Competitive analysis can be conducted at any stage of a business from planning to growth and expansion. It can help inform business decisions such as product development, pricing, marketing, and distribution strategies. It can also help you identify ways to differentiate your product or service from your competitors and position your business for success in the marketplace.
Its purpose is to…
Fine-tune and develop your USP
Improve your products and services
Establish a brand benchmark
Identify gaps in research & development and hiring
Discover potential market threat
Below are some approaches you can take to identify major competitors and research their products, sales and marketing strategies.
Step 1: Identify your main competitors
The first step in conducting a competitive analysis is to identify your main competitors. This involves researching other businesses that offer similar products or services to yours. You can use a variety of resources to identify your competitors, such as online directories, industry associations, and market research reports.
Step 2: Analyse their products or services
Once you have identified your main competitors, the next step is to analyse their products or services. This involves understanding the features and benefits of their offerings, as well as their pricing, distribution channels, and marketing strategies. You should also consider any unique selling points or advantages that your competitors may have over you.
Step 3: Assess their strengths and weaknesses
After analysing your competitors' products or services, the next step is to assess their strengths and weaknesses. This involves identifying areas where your competitors excel, as well as areas where they may be lacking. For example, your competitor may have a strong brand image but be less innovative than your startup. By identifying your competitors' strengths and weaknesses, you can better position your startup in the market.
Step 4: Determine their market share
Another important aspect of a competitive analysis is determining your competitors' market share. This involves understanding how much of the market they currently capture, as well as any trends or changes in their market share over time. You can use a variety of resources to gather this information, such as industry reports and market research.
Step 5: Identify opportunities and threats
The final step in conducting a competitive analysis is to identify any opportunities and threats. This involves considering external factors that may impact your startup's ability to compete, such as changes in consumer behaviour or advancements in technology. By identifying these opportunities and threats, you can develop strategies to capitalise on opportunities and mitigate threats.
Examples of Competitor Analysis Frameworks
SWOT Analysis
Source: Wordstream
Porter’s Five Forces
Source: EdraMax
Growth Share Matrix
Source: Indeed
-
Conducting a competitive analysis is an important step in starting a new business. By identifying your main competitors, analysing their products or services, assessing their strengths and weaknesses, determining their market share, and identifying opportunities and threats, you can better position your startup in the market. Remember to consider your competitors' unique selling points and advantages, and think about how you can differentiate your product or service to stand out in the market.
