Who’s Out There? Conducting Competitor Analysis
“You surveyed the competition?”
Conducting a competitor analysis is a critical first step when working with a new or even existing brand. This comprehensive process helps understand your brand’s position in the market, map competitors’ strengths and weaknesses, and identify growth opportunities. However, it comes with its own set of challenges.
What You Get from a Competitor Analysis
Identifying Differentiators:
Competitor analysis helps in reflecting on your own business and discovering what sets you apart from the crowd. This is crucial for establishing a unique selling proposition. Setting you apart from the competition in your industry or niche.
Understanding Competitor Strengths:
By analyzing industry leaders or niche competition you can learn what they do well to drive their growth, which can provide insights into successful strategies and best practices. If something is already working for them, odds are its worth considering.
Setting Benchmarks for Success:
A competitor analysis offers a realistic idea of your progress with success metrics. This can help assess whether your strategies are effective or need adjustment.
Gaining Insights into Target Audience:
This analysis zooms in on your potential or existing audience’s general preferences, dislikes, and needs by evaluating what they appreciate or criticize about competing brands. Giving you insights into what to do, and possibly what not to do.
Why it’s Not Always Easy to do a Competitor Analysis
Time-Consuming:
Conducting a thorough competitor analysis requires significant time and effort, especially in industries with many competitors. It also takes an experienced eye to know what to emulate, and what to avoid. This is where seasoned advice and guidance can be invaluable.
Data Accessibility:
Some information might not be readily available, especially if competitors are privately held companies. This can make it difficult to get a complete picture. However, there are dedicated tools available for market and competition research that help to surface the most important data.
Dynamic Market Conditions:
The market is always evolving, meaning competitor analysis needs to be a continuous process to remain relevant.
How to Conduct Competitor Analysis
Depending on industry there might be additional factors that need to be considered. However, the following gives a good outline of what kinds of information that should be gathered on your competition when conducting a proper Competitive Analysis.
Step 1: Identify and Categorize Competitors
Start by identifying all possible competitors in your industry, including lesser-known ones. Categorize them into:
• Direct Competitors: Brands offering the same products/services to the same target audience.
• Indirect Competitors: Businesses solving the same problem with different solutions.
• Legacy Competitors: Established companies with a solid market reputation.
• Emerging Competitors: New players with innovative business models and unique value propositions.
Step 2: Determine Each Competitor’s Market Position
Analyze their market position to understand where you stand in terms of market share and customer satisfaction. Visualize competitors in quadrants based on market presence and customer satisfaction:
• Niche: Low market share, high customer satisfaction.
• Contenders: Low customer satisfaction, good market presence.
• Leaders: High market share, high customer satisfaction.
• High Performers: High customer satisfaction, low market share.
Step 3: Benchmark Key Competitors
Examine each competitor thoroughly, focusing on:
• Quality: Product/service features and customer reviews.
• Price: Pricing strategies and customer perceptions of value.
• Customer Service: Support channels and customer ratings.
• Brand Reputation: Market perception and critical feedback.
• Financial Health: Revenue growth and profit margins (if available).
Step 4: Deep Dive into Their Marketing Strategy
Analyze how competitors market their products:
• Website: Structure, copy, and positioning. Do they do anything unique or interesting on their website in terms of features?
• Email: Subscription content and frequency.
• Paid Ads: Search engine advertising.
• Thought Leadership: Content like podcasts, webinars, and courses.
• Digital PR: Media presence and strategy.
• Social Media: Activity and content performance.
• Partnerships: Strategic alliances.
Step 5: Perform a SWOT Analysis
Create a SWOT (Strengths, Weaknesses, Opportunities, Threats) analysis for each competitor:
• Strengths: What they do well and their advantages. Price, reach, features of their products, production value for their content. Anything that they seem to be one of the best at.
• Weaknesses: Areas where they fall short. Poor reputation, failing to capitalize on social media, issues with SEO or their website in general.
• Opportunities: Market opportunities they might pursue. Things that have changed recently in the market or the industry at large.
• Threats: Potential risks and competitive threats.
Get Experienced Guidance
Conducting a thorough competitor analysis provides invaluable insights that can help shape your business strategy, differentiate your offerings, and ultimately improve your market position. While it requires time and effort, the benefits far outweigh the challenges, making it a crucial exercise for any business looking to succeed in a competitive market. With our expert assistance, Heartless Bastard Digital Strategies can help you complete and make use of this valuable analysis.
