What is Competitor Analysis?
Competitor analysis is researching the strengths and weaknesses of the competitors. Knowing about the behavior, nature, and strategies of the competitors helps the marketers to survive in the cutthroat competition. In order to survive in the market, it's important for marketers to examine and monitor their competition regularly.
Why is it important?
It is important for marketers to assess their competition because it helps in the business's rapid growth. This analysis makes the marketers know the latest trends and strategies. Marketers get an idea of how the market works and what is advantageous to them; they get to know what they should do and what not. Marketers will be able to make more effective strategies for their brand.
Ahimsa India is an organization working for the development of MSMEs. It gives the solutions to the enterprises and also conducts seminars and webinars providing tips and ideas on such topics to the individuals, businesses, and marketers so that they can take effective and relevant decisions for their brand or business.
How to analyze the competitors?
Marketers should have to follow a proper process to analyze their competitors and to know their behavior and strategies. The marketers can follow the following steps to keep their business a step ahead.
1. Identify the competitors.
The marketers are first required to know with whom they actually are going to compete. For example - the new marketers selling their dresses online can't directly compete with Myntra. They need to understand who are their current and potential competitors. It's important to compete with the business that will actually help them grow. The marketers can start their research with online platforms.
2. Describe each competitor and categorize them.
Now, after identifying the competitors, marketers should describe them like what they do, what they provide - brand, product or service, their marketing strategies, is a private company, and more. Marketers can also describe their offerings; for this, they can go through their brochures or websites.
There are three types of competitions - primary, secondary and
tertiary. Primary competitors are the direct competitors, and they may be a substitute for the product (selling or marketing the same product or service). Secondary competitors involve the marketers selling the same product or providing the same service to a different segment of the market or to a different target market. Tertiary competitors include the marketers that sell or produce complementary products.
On this basis, marketers can categorize their competitors.
3. List the strengths and weaknesses.
Now, marketers are required to search for the strengths and weaknesses of the competitors. For an effective result of analysis and to make relevant strategies for the business, the marketers should be honest while evaluating the strengths and weaknesses and should not be biased. Strengths may include larger reach, multiple products or services, high network, high-profit margin, technology users, having a USP, high quality, high customer satisfaction, high convenience, high-profit contribution, and vice versa can be considered as the weaknesses of competitors.
4. Identify the opportunities and threats.
Once the marketers get to know about the strengths and weaknesses, it becomes quite easy to evaluate the opportunities and threats for them. The larger number of weaknesses of the competitors is a symbol of more opportunities, while more number of strengths can be considered as a symbol of threats to the business.
It totally depends on the marketers how they will convert their competitors' strengths into opportunities and how they will take advantage of the weaknesses in a more effective way.
5. Prepare strategies.
The last step is to strategize this analysis for the development of the business. The marketers should form strategies with a goal that their business will always remain a step ahead. This analysis is an assessment of the competitors done with an aim to dominate the market by preparing effective and relevant strategies.
What makes a good competitor?
A good competitor is one that performs extraordinarily. They not only satisfy their customers but also fit their brand and product or service in the minds of the people.
What makes a good competitor analysis?
Although competitor analysis is confusing, lengthy, hard, and time-consuming, it should be an in-depth study of competitors from top to bottom, from the name of the business to their strengths and weaknesses. It will be a good competitor analysis, only if a business is able to turn the strengths and weaknesses of their competitors into an advantage for their business.
Competitor analysis is the assessment of the competition in the market. The process is hard, lengthy, confusing, and time-consuming, but at the same time, it's important and useful for the business to conduct. It tells the marketers from whom to compete and how to compete. Also, it provides an effective way to strategize their business growth.