Competitor analysis helps provide visibility into the strengths and weaknesses of your competitors, as well as insights into current and future industry trends. It is crucial for making better-informed decisions and developing effective strategies that give you a competitive advantage in your industry.
Competitor analysis refers to studying competitors to get a fact-based understanding of their exact position. It involves identifying and analyzing their strengths and weakness. The goal is to identify opportunities and threats to make better decisions for your growth. If you engage in it, you can gain sharp insights into the competitive landscape and use it to differentiate yourself meaningfully and build your competitive advantage.
As a business looking to scale, you need to explore the competitive landscape to identify opportunities and market trends and embrace growth. Once you’ve acquired your competitor data, here’s how competitor analysis can help you stay on top.
If you’re looking to establish a market position, you need to know the science of data collection and the way to analyze this competitor information to your advantage. Here are key steps to effectively do a competitor analysis:
Listing out who you compete with isn’t always straightforward. Why think a particular business is your rival and another is not? Choosing which companies to include needs to depend on your definition of competition, leading back to why you are looking into your competition. Subjects, where matches with your own company can be found, are: activities, product groups and/or services, sales channels, and sales territories.
Once you know who your competition is, you need to start the data collection process. This includes gathering information on your competitor's products or services, marketing and pricing strategies, financials, advertising tactics, sales channels, target markets, and customer demographics. Use credible and ethical sources to gather accurate information and create a suitable competitor profile to aggregate everything about a competitor in one place. Here, data can be of two kinds:
- Qualitative: This includes objective information like market reports, shareholder information, sustainability reports, sector magazines, interviews, etc., sourced from the company’s website, news outlets, and search engines.
- Quantitative: This includes financial statements and annual reports from where you can analyze the sales and revenue data of a company.
Once you have your competitor’s financial information, you need to process the data effectively. Typically, most businesses use tools like Excel to create templates where data points can be highlighted. Since data analysis is conducted from time to time, you could consider adding broad metrics where identifying key trends, opportunities, and threats becomes an easy, ongoing process. Doing this can help you develop effective marketing and sales strategies.
Finally, you should write a clear introduction of the process of your analysis. This can support in receiving the findings effectively. After all, your stakeholders may not have been involved in the process, unaware of your goal or motivation, or unsure what their take-away of your findings should be. Therefore, make it a point to clarify the objectives and relevance to underline the real power of your data.
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