Do you know what your competitors are up to? Organizations frequently spend time and money addressing internal concerns while ignoring external competition pressures that jeopardize their long-term viability. In an ever-changing world of advancements in marketing, technology, communications, and distribution, it is critical to devote sufficient attention to future-proofing your company against any possible dangers that these developments may bring.
It’s especially difficult (complex and time-consuming) if you’re new to business. Most of the data is quite tough to obtain. Even if you do find anything, you appear to be left with more questions than answers.
How did they secure $10 million in funding?
Did that ridiculously costly advertising effort pay off?
When done correctly, competition analysis will provide you with a wealth of quantitative and qualitative data to support your own business decisions. Choosing the correct rivals is also important since the competitors you choose for the analysis affect the insights you’ll acquire at the end, as well as the decisions you’ll make based in part on those insights. That is why, if you want extensive results, you must include diverse types of rivals (large and small, direct and indirect). In other words, the rivals you choose will influence how you see your firm and the overall analysis.
You may identify your ideal competition by answering the following questions:
Who is your target audience?
What fundamental issue does your product address for your target customers?
How do you approach a problem? Do you address the issue wit ha novel technologies or processes?
Companies that sell to the same clients and address the same problem with the same or comparable solution (technology)are considered direct rivals
A rival with entirely different functionality can meet comparable or related client needs. Understanding them is critical so you know what you’re up against and can position yourself properly.
Namely, competitor analysis can help you:
- Create (or validate) your Unique Value Proposition.
- Set your product development priorities by concentrating on the features of rivals’ goods that customers appreciate the most.
- Refine your product by capitalising on rival’s shortcomings that buyers complain about.
- Obtain benchmarks against which to assess your progress.
- Identify market sectors that are underserved by rivals.
- Identify gaps between what your rivals provide and what your consumers require to create a new product category.
Competition may be your greatest benefit since it helps you to learn from the industry’s finest, even if they are not direct rivals. Having a thorough understanding of your direct and indirect competitors’ strengths and weaknesses can provide you with a more accurate picture of what is going on in your industry. It is also critical to research industry patterns and trends, since this will expose the strengths and weaknesses in your own firm and aid in the development of a competitive strategy for the future.
There are several approaches and online tools available to assist you in doing a thorough market study. There are also less traditional methods of “spying” on competitors.
You’ll never be able to completely comprehend or replicate a competitor’s plan. A competition study is only one element in your growth plan, and it is a restricted one at that. You don’t want to go to your competition for marketing ideas. They may be spending thousands of dollars on Facebook advertisements, but that doesn’t imply it’s working.
You also don’t want to introduce a new feature solely to stay up with a competition. Despite all the rhetoric about data-driven workplaces, you’d be amazed how many product choices are influenced by petty internal politics or a micromanaging HiPPO (Highest Paid Person’s Opinion).
Do not utilise competition analysis to decide what to create next.
Your competition will not provide you with your next idea. It should originate from consumer feedback, conversations with prospects, and ideas shared by your colleagues inside your organisation.
Avoid conducting industry research.
Because such changes occur at the bottom of the market, which is often not on their radar, industry analysts are not adept at anticipating disruptive firms and cutting-edge trends. After big developments have happened, research behemoths like Forrester and Gartner give industry consensus. Furthermore, they draw their study by evaluating huge firms, therefore startups will be disappointed.
Spend as little time as possible on it.
Consider competition analysis to be a supplementary activity. It should not take up too much of your time or resources. Pay attention to what your consumers are saying to you, whether through feedback, interviews, or in-app activity. They will always be the most reliable source of information and ideas.