Understanding and keeping track of your competition is an essential part of staying relevant in the marketplace of tomorrow. This is especially important for entrepreneurs and small business executives. Many companies outsource experts to keep track of their competition and to re-asses the market on a routine basis. One misconception is that it must be a complex, time-intensive and financially overwhelming process, especially with the amount of information that can be found online. Competitive analysis is certainly an investment, but by investing a relatively small amount of time and money, businesses can gain remarkable insight into the market around them! By analysing your competition, you can not only learn their best practices but also avoid some of the mistakes that they’ve made.
“Keeping track of who your competitors are, what people are saying about them, and what they are saying themselves can help you differentiate your business and stay ahead of trends that could impact your business.” – Michele Levy, an independent brand strategy consultant.
Competitive analysis should be viewed as an ongoing process whereby your company continues to understand the strengths, weaknesses, opportunities and threats in relation to your competition. Most businesses already gather information about their competition, but many small business owners don’t recognise it as competitive analysis. The difference is the quality of information that is gained or lost by hiring an outside source. In our mind, the most important thing to take away is to recognise that any information about your competition is considered competitive analysis and to think about it in those terms.
There are a series of business benefits you can gain by having insight into the competitive landscape, particularly if you track products, prices, staffing, research and development, and other aspects of the competition on an ongoing basis. “This is so a business can understand the external and internal environments they’re operating in,” says Ken Garrison, chief executive officer of the Society of Competitive Intelligence Professionals (SCIP).
There are quite a few benefits to be gained by having specific insight into the landscape of your niche market, especially if information is itemised. For example, if your company sells computer monitors, tracking your competitions products offered, price points, staff levels, social media traffic and promotion scheduling might offer significant insight into their company over a year and even more insight over a five year period.
The following are benefits that can be gleaned from conducting competitive analysis:
- Understanding the market
- Better targeting customers
- Market potential forecasting
- Economic climate tracking
- Competitor product tracking
- Competitor pricing
- Tertiary market possibilities
- Customer acquisition
The guarantee is that by systematically engaging in competitive analysis over time your company will be able to track trends that will allow you to better adapt to your competition, market and customer base. One of the ways to accomplish this is by engaging in focus groups.