Whether you’re a multi-national corporation or a small business that’s just starting out, there isn’t much that will serve you better than a competitive analysis. A competitive analysis will assess your past, affect your present and dictate your future. In fact, it could be the difference between success and failure.
A proper competitive analysis will cover seven key topics:
- Your company’s competitors
- Competitor product summaries
- Competitor strategies and objectives
- Competitor strengths and weaknesses
- Future market outlook
- A SWOT analysis
- Future strategy recommendations
The analysis begins with a list of your company’s competitors. Such a list is comprised of what your company considers to be its chief competitors – from revenue, brand popularity and online visibility positions. There also may be other companies that indirectly compete with yours, ones that offer products or services that have the same target demographic.
Once you have compiled the list, highlight the four or five that you consider the greatest challenge.
Competitor Product Summary
Analyze your competitor’s products and services in terms of features, value, and targets. Customer satisfaction surveys, reviews and online research will be your key resources here. Find out how your competitor’s manufacturer, distribute and advertise their products. This should give you a basic understanding of what they do differently to you (and each other).
Competitor Strategies and Objectives
Observe how your competitors market themselves, and take a look at their public reports to see if you can garner insights into what their current goals are.
Sales people will know who they are and can help you get this sort of information, former employees and customers may also be able to help. It will take some creative thinking on your part to piece together a complete picture of strategies and objectives.
Competitor Strengths and Weaknesses
With an understanding of competitor processes, strategy and behaviors, you’re in a very good position to evaluate their strengths and weaknesses. What’s working well for them? What isn’t? Where is there room for improvement?
To develop your previous research further, look at their website, social channels and online collateral. Perform SEO, SEM and website analysis.
Future Market Outlook
How does the market overall look? Is it growing? Is it struggling? How does the economy and consumer behavior look like it will impact the market in the future? An in-depth, expert report isn’t required here, you’re simply looking to provide yourself with a decent enough understanding to allow you to perform the next step of a competitive analysis, a SWOT analysis.
Using all the information you’ve gathered in the steps above, you’re now in a great position to perform a SWOT analysis. This is a structured planning method used to evaluate the Strengths, Weaknesses, Opportunities, and Threats for your business.
Where can you win? And where can’t you win? Which efforts should you capitalize on, and which should you sideline? What are potential risks down the line?
Future Strategy Recommendations
Simply, this is your conclusion. It’s where you take all of your insights and turn them into a set of recommendations for your company moving forward. These recommendations can then be used to create a formal strategy.
Writing a competitive analysis is both challenging and interesting, not to mention incredibly valuable. You’ll learn a lot about your industry, your company as well as your competitors, and such a report will become vital for your company in future strategy and planning.
For more information on competitive analysis, or if you’d like help getting started, contact us today for a consultation.