“If you know others and know yourself, not even in a hundred battles will you be in danger.” This phrase from Sun Tzu’sArt of Warcan be applied to both war conflicts and the business world, often considered another battlefield. It is well known that, to obtain the optimal functioning of something, it must be known perfectly, that is why many companies insist on doing study after study of their own activity. But what about others? A competitor analysis is necessary.
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Competitor analysis is something very simple: looking at the strengths and weaknesses of businesses that are, or have the potential to be, competitors. With this simple evaluation, it can be established what makes a product or service unique and, in addition, what attributes must be enhanced to attract the target audience. Not only is very valuable information being obtained about competitors, but this can be used to predict future behavior of rivals and counteract it.
1.Steps to perform a competitor analysis:
- Define the scope of the company and its nature.
- Determine who the competitors are, placing them in strategic groups according to their level of rivalry.
- Define who the customers are and what they expect from the company.
- Describe and classify by importance the key factors of the industry.
1.1.Study the rival
In the marketing world, observing changes that the competition makes in your advertising can help anticipate your movements. For example, if they modify their message in the ads, they may be releasing new products, while, if the changes are in the production processes, they are preparing for a new branding or positioning strategy. But it’s not the only thing you can observe when analyzing your use of advertising.
When studying the competitor, it’s easy to see the budget they’re devoting to advertising, their segmentation, and even what audience they want to target. This can help you implement a marketing plan of your own or adjust it, for example, so that campaigns do not match. Another way to analyze the competition is to follow up with them, see their annual reports or study common customers or market associations they make.
2. In order to make an analysis of the competition, it is necessary to ask yourself the following questions:
- Who are the direct competitors?
- What products or services do you sell?
- How is your presence in the market?
- What strategies are they employing? Which ones have you already used?
- How are they advertised?
- What are their strengths and weaknesses?
- What kind of potential threats do they possess?
- Can opportunities be obtained from your strategies?
2.1. Potential competitors
Finally, when doing a competitor analysis, we must not forget to look further and make an estimate of what future competitive threatsmay be, not just the current ones. The entry of new competitors is possible when there is a very wide profit margin in the industry, demand is not met, it has growth potential or competition is not intense.
Typically, these companies are usually companies that handle a similar product or market,that target the same niche markets, companies with similar products but located elsewhere, or new trainings of experienced former employees. By observing and always taking into account the movements of adversaries, it will be easier to achieve success.