Benefits of Competitor Analysis to your business
Analysing your competitors is a very important part of developing growth strategies as well as finding your edge in the marketplace. By studying those who you compete within the marketplace, you can identify areas of strength and weakness in your competitor, and also yourself, that can be exploited or enhanced upon for improved performance.
You stand to gain a lot from acquiring insight into your competitors – knowledge you can use to develop as well as market your products to your target customers. It is through studying your competition that you can also formulate viable strategies of managing risks.
Competitor analysis is useful for both upcoming and established businesses. For those looking to get into the marketplace, analysing those who you shall be competing with will help you understand the market conditions for creating your business plan while established businesses can find avenues for refining their existing strategies for turnarounds or sustained growth.
By understanding the benefits of competitor analysis, you can boost your strategic plans and make them more effective. Here are the five core befits of competitor analysis.
By studying your competition, you can identify areas within the market that are not being served properly or are being left out entirely by your competition. Maybe your competition is not catering to the needs of a particular market segment, maybe they offer an inferior product that does not satisfy customers, or maybe they don’t allow for customisations of their products. The only way to find this information is through analysis.
Through customer analysis, you can also look at your competitor's geographical reach to find out which areas are underserved and may offer opportunities for new players to enter. This can be helpful for businesses that require human or physical interaction with your customers such as retail stores, restaurants, repair shops and any other kind of brick-and-mortar establishment.
Competitors are always in a race to develop the next cutting-edge product that will revolutionise the industry. By conducting competitor analysis, you can gain a huge advantage from learning what your competitors are improving or developing for their future products. By knowing which direction your competition is going, you can also focus your efforts in a similar direction and try and beat them on price, quality or functionality.
While industrial espionage is forbidden, there are numerous other legal ways to keep up with what your competitors are doing in terms of strategies and product development that can help you keep your product lines relevant and competitive in the market.
This month people can’t get enough of ‘this’, the next month they don’t want any association with it. The needs and tastes of consumers are continuously evolving – so much that they themselves have no idea what they want a lot of the time. By analysing your competition, you can observe general trends within the marketplace that can help you differentiate your offerings for improved sales.
Studying your competitors can also help you identify trends so that you can go against them. Yep, you heard right. Sometimes going against the current can create a counter-culture movement that could be turned into a loyal customer base.
By finding out what the trends are, you can evaluate and determine whether they’re worth following, opposing, or ignoring.
The modern marketer focuses on selling their product’s value and benefit as opposed to selling the actual product or service itself. By keeping up with the marketing strategies of your competitors you can gain insight into their product development and also find out their proposition to the customer i.e. what are they offering?
Often, what consumers think they’re getting when they buy a product is more important than the actual product they’re buying. By analysing your competition, you can find out what the thoughts of consumers are regarding the brands you’re competing with.
If your competition is selling exclusivity, for example, you can figure out through competitor analysis how to make your product more desirable through marketing for a market that desires exclusivity.
Competitor analysis also involves studying those who have tried to compete in the space and have failed or have had little success. While some mistakes are less-pleasurable learning experiences, some (especially in business) can be catastrophic. By studying your failed or failing competitors, you can identify the biggest mistakes to avoid instead of suffering the same pitfalls.By studying your competition, you can forecast problems beforehand and make the necessary arrangements to avoid or combat them head-on. This could determine whether you win or lose with your products.
These are just the top benefits to be gained when you perform competitor analysis. Other than these, there are numerous other benefits and opportunities to be discovered when you carefully study and analyse those businesses that you are competing within the marketplace.
Learn more about our Competitor Analysis here: Competitor Analysis
Further reading available here: https://www.toptal.com/product-managers/freelance/product-designer-guide-to-competitive-analysis