Know Your Market – Doing a Competitive Analysis

You may not realize it, but your competition is affecting your business in a substantial way. They might be stealing some of your customers, and from there, they could pose a threat to you and your company’s success. The only way to know for sure is by completing a competitive analysis.

What is a Competitive Analysis?

A competitive analysis assists in identifying the market’s major competitors, determining their success techniques, and identifying resources your company could employ to dominate the market.

How To Do a Competitive Analysis

  1. Know your competitors: The first step is to identify all of your major competitors. You can do this by doing a simple Google search for your product or service and looking at the top results. Once you have a list of competitors, it’s important to research each one and gather as much information as possible.
  2. Conduct a survey: Your survey should ask what users like and dislike about each company, how much time they spend on their website, and how likely they are to make a future purchase from them.
  3. Identify business structure: Understanding your competitor’s business structure will help you determine how to position yourself in the market. If they’re a smaller company that runs on limited resources, there may be an opportunity for growth.
  4. Study their marketing strategy: Look at what they are doing to promote themselves through social media, directories, email newsletters, print ads, and so on. This is where most businesses fall short when trying to do a competitive analysis. They focus all of their energy on the product and not enough on their marketing.
  5. Look for weaknesses and gaps: This is where you’ll want to focus most of your attention. What are they not doing that you could do better? What can you do to make yourself stand out from the competition? Try to be innovative when looking for gaps and weaknesses.

Benefits of Understanding Your Competition

Once you have completed a competitive analysis, you can reap several benefits. Here’s why entrepreneurs should do this and how to get the most out of your research:

  • You will know where your business stands in comparison to others: You’ll receive feedback on how to improve practices, what services are popular, and where your business is lacking. It will help you decide on new opportunities that improve current weaknesses or focus more heavily on particular aspects of the business to dominate the market.
  • You’ll also have a better understanding of the threats your company is up against: Knowing what’s on the horizon will help you plan for it and take preventative measures to avoid these issues negatively impacting your business in the future.
  • You will identify marketing opportunities: You’ll be able to improve upon your current strategies by looking at how competitors are promoting themselves through their marketing. It will allow you to improve business practices by taking advantage of opportunities in your marketing plan for better results.
  • You will recognize weaknesses: You’ll also have a better understanding of where your business is lacking, how it’s affecting the company, and what changes need to be made to ensure future success. It will give you an idea of where to focus future improvements that can beat the competition.
  • You will get a better understanding of your target market: A competitive analysis will help you understand what services and products are popular with consumers and their needs and wants. You can use this information to create a better strategy that caters to the target market’s needs and desires and increases your business success chances.

Conclusion

A competitive analysis is a process that helps entrepreneurs and business owners better understand how their company stacks up against competitors. Doing a competitive analysis can be an eye-opening experience for many companies. It’s important to understand your competition, but it doesn’t have to take up all of your time or money.

At Wealtheo™, we believe making the right financial decisions throughout your life and business begins with your personal finances. Let us help you get started with self-education by checking out our personal finance courses in Wealtheo+.

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