They say you should keep your friends close and your enemies closer, and in business, that is certainly the case. And whilst calling your competitors enemies may sound harsh, when you take a step back and look at the bigger picture, they aren’t too far off! No, this doesn’t mean you need to wage war, rather keep an eye on their actions and ensure you know everything you need to defend your position in the market.
Before we get too carried away with the whole superhero narrative, let’s take things back a step and define what a competitive analysis is.
What is a competitive analysis?
The competitive analysis involves researching carefully selected competitors to gain insights that will enable you to develop and optimise your strategy, identify new opportunities in your market and gain a competitive advantage.
Three reasons your business should conduct a competitive analysis
Learn from the best
Whilst copying is a no go, taking inspiration from a great idea should never be frowned upon. After all, you are targeting the same audience with a very similar product, so if you see something is working particularly well for one of your competitors, take that on board and devise a solution that makes it your own.
Using competitive analysis as a learning opportunity will help to enhance your own strategy and give you the chance to gain a competitive edge as you take something that is already working well and make it even better – at least, that’s the plan!
Equally, you can also learn from the mistakes of others. If something hasn’t gone to plan, why waste your time and resources making the same mistake? Take the time to review what went wrong and use it as an opportunity to learn what to avoid and how it could be improved.
Fill the gaps
Another key advantage of conducting a competitive analysis is that it enables you to identify new opportunities, be it areas within your market that are currently being overlooked or emerging trends that are yet to be explored.
But what does this mean for your business? It offers you an opportunity to develop unique new offerings to help fill the gaps in your market, which in turn, will help to differentiate your business and present an opportunity to become a pioneer within your market.
Be a hero
Your direct competitors are called just that for a reason: you share the same target audience and have very similar offerings. So, if they are not delivering, use it as an opportunity to show you can provide everything they are missing (and more!). The most obvious place to start is customer reviews, but you can also gather insight from social media and other online forums (depending on the size of the business).
How to conduct a competitive analysis
Now you know what competitive analysis is and the benefits it can bring for your business, you are probably keen to get started. Which brings us to the final section of this blog: how to get started with conducting a competitive analysis for your business.
#1 Identify your competitors
The first step – and arguably the most obvious – is to identify which competitors you want to monitor. Here you will want to pick out around 10 of your direct competitors: the companies that have an almost identical offering to you, operate within the same market and target the same audience.
Top tip: it’s good practice to keep an eye on your indirect competitors as there is always a chance they could develop a new strategy and become a risk to you
#2 Know what to look for
To get the most from a competitive analysis, you need to know exactly what to look for. Start by reviewing their offerings. Look for similarities to yours, any USPs and how they position it, pricing and otherwise.
Another key area to look at is their marketing. Identify their key channels and monitor their performance on each, look at their brand identity, analyse their content (including everything from type, quality, frequency and platforms) and assess the overall effectiveness of their campaigns. Tying into this, you will also want to look at their customers. Review everything from their engagements, the type of content that resonates most with them, the most effective platforms and how satisfied they are.
#3 Review and plan
Now you’ve completed your competitive analysis, it’s time to review your findings and create a plan of action. The trick is to use your research to identify opportunities and areas for improvement within your business. Then, you can use lessons learned throughout your analysis along with your own ideas to help you adapt and improve your strategy and optimise your performance moving forward.
So there we have a whistle-stop tour of the competitive analysis. And with 70% of large enterprises agreeing that competitive intelligence helps improve the effectiveness of their strategies, it’s not something you should overlook! If you are looking for help with yours, contact us today to organise your free consultation with one of our marketing experts.