The nature of business requires that one goes into it with the knowledge that it is a volatile and extremely competitive endeavor. On one hand, you have businesses that attempt to get an edge by offering consumers a service or product that is unique, while other times it is the marketing and perception of the company itself that attracts people. A great example of this is the music industry, in which companies are constantly searching for the next great way to deliver it to the masses.
In order to truly stand out and compete in your chosen market, you’re going to need a new product or experience to catch the eyes of the populous. Competitive analysis is the process of finding and researching your competitors in the industry.
Knowing Where to Begin
There are multiple elements that must be used in order to conduct effective competitive analysis. Keep the following questions in mind to guide you on the right path.
- What firms are your indirect competitors?
- What five firms are your closest direct competitors?
- Has their recent business been increasing, decreasing or steady?
- Is there anything you can take away from their advertising or operations?
- What are the differences between their services and products and yours?
- What are the strengths and weaknesses of these competitors?
Maintain a record for every competitor you identify, keeping information about their pricing strategies, advertising methods and promotional materials. Read through these every so often to determine the frequency of marketing, sales and sponsorship deals.
What Should Be Included in Your Competitor Analysis
Once you have the above questions internalized, it’s time to start constructing your competitive analysis documents. Here are the main points you need to hit:
- Competitor identifications – Create a list of every one of your current competitors and be sure to include research on anyone who might choose to enter the market within the next year or so.
- Summary of competing products – Include information about quality, staff, location, advertising, customer service, promotional strategies and distribution methods.
- Market strength assessment – Check the growth rate of the market for your product to see if there are enough customers for each of your major competitors.
Of course, it’s not enough to know what kind of information is necessary for your competitive analysis; you also need to have effective methods of gathering it. Some of the best sources include:
- Internet – Regardless of what you’re looking for, it’s a good bet there are some leads to be found online.
- Speaking with customers – Your sales employees as well as those of your competitors are always dealing with customers. Find out your customers’ opinions on your company and on the competition.
- Personal visits – If you can, visit the premises of your competitors, making note of the look of the place, employee-customer interactions and the pricing and display techniques for products.
- Presentations and speeches – Attend some presentations and speeches given by your competitors to get an idea of their messaging and communication methods.
- Advertising – Analysis of ads released by competitors give you a chance to learn about their product features, pricing, target audience and more.
- Written sources – Anything publicly released by or about your competitors may contain useful information.
- Trade shows – Stay current on business and marketing publications as well as anything released by newspapers and business journals such as new industry surveys and other research.
Keep Competition Healthy
Whether you’ve been in business for a while or you’re just starting out, it is important for you to gather as much information as you can on your market competitors so you can create a product or service that is unique. However, it is also important that you do so via methods that are legal. If there are any questions that come up in this regard, consider getting in touch with an attorney in business and commercial law. If you keep these basic principles in mind, your business can start making its way to the top in no time.
The content on our website is only meant to provide general information and is not legal advice. We make our best efforts to make sure the information is accurate, but we cannot guarantee it. Do not rely on the content as legal advice. For assistance with legal problems or for a legal inquiry please contact you attorney.