How well do you know your competitors’ businesses?
Today, all brands and Organizations have to operate in a very competitive and fast paced environment. Brands are always looking for opportunities to hop on and gain competitive advantage in the industry. Therefore , It is critically important to know exactly what products and services your competitors offer. How can you compete against a business if you don’t know what you are competing against? From my experience with business, as soon as you ask any Business owner about competing businesses there are two general responses most of the time. The first is that they begin with a standard statement on how incompetent their competitors are, how expensive, how unreliable and so on. The other response is a surprised look reflecting the fact that they know absolutely nothing about their competitors. So let’s understand How do we do Competition analysis?
Competition analysis begins with identifying present as well as potential competitors. It portrays an essential appendage to conduct an industry analysis.
An industry analysis gives information regarding probable sources of competition (including all the possible strategic actions and reactions and effects on profitability for all the organizations competing in the industry). However, a well-thought competitor analysis permits an organization to concentrate on those organizations with which it will be in direct competition and it is especially important when an organization faces a few potential competitors.
The main objectives of competitor analysis can be summarized as follows:
To study the market
To predict and forecast the organization’s demand and supply
To formulate strategy
To increase the market share
To study the market trend and pattern
To develop strategy for organizational growth
When the organization is planning for the diversification and expansion plan
To study forthcoming trends in the industry
Understanding the current strategy strengths and weaknesses of a competitor can suggest opportunities and threats that will merit a response
Insight into future competitor strategies may help in predicting the upcoming threats and opportunities
Competitors should be analyzed along various dimensions such as their size, growth and profitability, reputation, objectives, culture, cost structure, strengths and weaknesses, business strategies, exit barriers, etc.
To find out information about your competitors is really quite easy. You can read through their Website, advertisements, ask your friends and family if they have used this business and ask them how they found the service that they received. Once you are clear on what they offer you can promote your business around what makes you different and hopefully better, so that potential customers will buy from you.
Many businesses view competitors as the enemy when in reality they can be friends. If you are lucky enough to be able to work with your competition, that is fantastic. If not, at least make a point of knowing and understanding what the competition offers so that you can offer more.
Therefore, the purpose of the competitive analysis is to determine the strengths and weaknesses of the competitors within your market, strategies that will provide you with a distinct advantage, the barriers that can be developed in order to prevent competition from entering your market and any weaknesses that can be exploited with in the development of Product or services.
Dr Praveen Srivastava, Business Coach & Management Consultant
Recipient of Philip Kotler excellence award in the area of Consulting and Training
www.praveencsrivastava.com & www.pnpconsultants.net