Markets change – Businesses must keep a close watch on these changes and adapt accordingly.
Competition is an inevitable part of a business. As the number of entrants into the market are gradually skyrocketing, an effective competitor analysis framework has become a necessity for modern-day businesses. Competitor analysis is a critical part of the marketing plan using which companies can establish what makes their products or services unique when compared to the peers in the market. This can be achieved by placing competitors in strategic groups depending on how directly they compete for the market share.
How is competitor analysis done?
Competitor analysis or competitor research is ideally carried out by listing out the products or service of each competitor or strategic group, their profitability, marketing objectives, growth pattern, organizational cost structure, and their current and past strategies. Some of the key questions to be answered by businesses here are:
- Who are your key competitors?
- What are the products and services that they deal in?
- What is their market share?
- What are the potential threats that they pose?
Systematically engaging in competitive analysis enables companies to track trends and better adapt to competition.
One of the easiest ways to undertake a product/service comparison is through a competition grid. A glance through the competition grid will help companies evaluate where their product fits in the overall market.
Here are some of the key steps in a competitor analysis:
Assemble a list of competitors
Do a brain dump of everyone and list out all the competitors in the market which includes both the direct and indirect competitors of the company. It is also essential to evaluate the number of branded and unbranded players in the market.
Differentiate current and aspirational competitors
It is essential to track if any new player is planning to enter the market or if an existing player has left the market. Companies must also track the number of customers who tend to resort to supplementary products. All this helps to identify the direct and indirect competition before building the competitor strategy.
Document brand elements
The next step in competitor analysis is to analyze how each individual competitor represents itself. This includes everything from their tagline to their brand colors. This research can be a detailed or a general one at this stage. The ultimate goal here is to identify the similarities and differences. The more detailed information gathered, the better in classifying the company’s competition. This step in competitor analysis helps companies can identify common trends in the way competitors do things, such as similar visual identities or the message being communicated. These insights prove to be highly valuable in helping companies better position themselves.
Articulate own brand identity
Once the traits and elements in competitor brands are identified, the same should be done for the company’s own brand. This acts as a great source for comparison. It also helps evaluate what the company lacks and what are the areas that provide new grounds for competing with other players in the market.
Find a niche
The final step in competitor analysis is to visualize and position the competitors (preferably on a Cartesian chart) in order to examine where the company truly lies in the spectrum. Several variations can be carried out for this including – Low cost vs. high cost, Low quality vs. high quality, Traditional vs. contemporary, or even niche vs. comprehensive. By the end of this analysis, companies would be able to find answers as to why customers would choose their product over those of competitors in the market.
Keeping track of the competitors help businesses differentiate themselves and stay ahead of the market competition. This becomes easier with an experienced competitor analysis partner. Gain more insights into our service portfolio.
Benefits of competitor analysis
Some of the key benefits of competitor analysis include:
- Help understand the market
- Facilitates in better targeting of customers
- Competitor product tracking
- Identify competitor pricing
- Customer acquisition and retaining
- Tertiary market possibilities
- Tracking economic climate
How competitor analysis helps expand consumer reach
Identify up-selling and cross-selling opportunities
In an extremely competitive market cross-selling is one of the most important ways to win the price war. Suppliers can pair most of the products for greater convenience in the form of up-selling. Competitor research helps to identify market opportunities and build a competitive strategy to cross and up-sell the company’s products/services.
Encourage brand loyalty
The competitor analysis framework helps build strong relationships with the customers. Competitor analysis tools analyze what the competitors are offering and what are the points where the company can improve its performance. This can allow companies to offer more than their competitors and promotes repeat purchases.
In today’s competitive market, even the smallest difference in price can prompt loyal customers to turn towards competitor offerings. If one particular supplier is offering cheaper goods elsewhere, there are greater chances of customers moving towards those offerings. So, without the right competitor analysis frameworks to help assess the buying behavior of customers, the company’s response time will become slow and the chances of losing out on loyal customers are high.
Given the ever-increasing competition across industries, the need for competitor analysis solutions will continue to evolve. Infiniti Research is a leading competitive intelligence solutions provider that helps global organizations compete and triumph in their respective industries. We have over 15 years of expertise in helping clients from across the globe and across various industries. Our team of competitive intelligence experts offers highly tailored and proven competitor analysis solutions and methodologies to analyze the market competition – Request more info for comprehensive solution insights.