8 Steps To An Effective Competitive Analysis in 2021 | Aasa Technologies
Competitive analysis is a practical way of defining your company’s position against competing brands and identifying the strengths and weaknesses of other players in the market.
We have put together all our processes and techniques for a complete competitor analysis in 8 steps.
What is Competitor Analysis?
Competitive analysis is the process of researching and analyzing the marketing strategies of companies operating in a given market. It helps a business determine potential benefits and constraints within a target market around a product or service. By evaluating the strengths and weaknesses of your competition, you can start preparing how to benefit your company.
Why is it Important to Research Competitors?
If you are in business, you will have competitors. Competitive research (or competitive intelligence) is an area of strategic research that specializes in the collection and analysis of information about rival firms.
This is an essential tip to find out what your competitors are doing and what kind of threat they pose to the success of your company.
Who Can Benefit from an Analysis Framework?
This framework will work well for entrepreneurs, business owners, startup founders, product managers, and marketers. It includes business metrics, a product analysis, and a marketing evaluation, with the marketing bit going in a bit more depth.
Feel free to leave out some parts if you’re only interested in one aspect, or better yet, delegate some of the steps to the relevant teams if you can.
How to do a Competitor Analysis in a Simple 8 Steps.
1. Determine Who Your Competitors:
The first step in starting a competitor analysis program is to define who your competitors are. This means going beyond the big names in your field and looking at the full scope of organizations that can potentially affect your success.
Before you can identify your competitors, let’s first talk about what kind of competition you have in the field. There are 5 types of competitors:
- Direct competitors: are the brands that first come to mind when one thinks of competition. They are in your area or neighborhood, marketing products and services that do the same thing as you. Your target audience is similar to them. For example, if you are a residential painter, then your direct competitors are other residential painters in your service area.
- Indirect competitors: They are businesses that are in the same category, but they sell different products and services than you. They serve the same customer needs as you, but they do it differently. Your target audience will overlap with them but not an exact match.
- Potential competitors: They are competitors who do the same thing you do and target the same type of customers but are not selling in your market area and are unlikely to do so. An example of a potential competitor would be a residential painting company in another city.
- Replacement/Substitution Competitors: Competitors are difficult to identify. They do not necessarily provide the same product or service but compete for the same resources or customer base. They are the ones that provide a choice of services you provide that solve similar pain points. If your business has more than one way to solve the problems you want to solve, you may have a replacement competitor. For example, our residential painters would be any DIY store that sells painting supplies.
- Future Competitors: Potential is like competitors, but they are much more prepared and more likely to enter your market. It can be a large national company that has not yet entered your local market. Understand them between potential and direct competition.
All of these types of competitors can now or in the future take away market share from your company. But how do you start finding out who your competitors are?
2. Find Competitor Products:
At the heart of any business is its product or service, which makes it a good place to start. You will want to analyze the entire product range of your competitors and the quality of the products or services they are offering. You should also pay attention to their pricing and the discounts they offer to customers.
3. Research Competitors Sales Strategy:
These useful pieces of information will give you an idea of how competitive the sales process is, and what information you need to prepare your sales reps to compete during the final buying phase.
4. Study your Competitive Pricing:
There are a few key factors that determine the true pricing of your product – and a key one is understanding how much your competitors are charging for a similar product or service. If you feel that your product offers better features than competitors, you may want to consider making your product or service more expensive by industry standards.
5. Meeting Competitive Shipping Costs:
If most of your competitors offer free shipping, then you can consider the option of your own company. If free shipping isn’t a practical option for your business, consider how you can differentiate in other ways — including loyalty programs, holiday discounts, or gifts on social media.
6. Analyze Competitive Marketing:
Analyzing your competitors’ websites is the fastest way to gauge their marketing efforts.
7. Competitor Content Strategy.
Invent your competitors’ ingredients List each content medium and each content site. In other words, capture everything from blog articles to videos on and off their website. Once you’ve invented your competitor’s material, it’s time to evaluate it. It is important to understand how each type of content is received from your competitors and how the audience receives it.
8. Learn Competitive Technology:
Let’s say your competitors have the same type of content, update it as often, and produce higher quality work. You may have to look more closely to find out what they are doing differently.
It could be his technique.
If your company has a digital presence then you know how important your technology is. When doing a competitive analysis on the type of content generated by your competitors, it is also beneficial to consider the SEO of that content. With the roll-out of algorithm updates like Google’s BERT, search engine technology is getting better and better at understanding search intent.