When was the last time your company or business conducted a competitive analysis? Do you know who your competitors are?

It is very important for companies to conduct a competitive analysis and know-how to create an effective one. Competitors in business exist every day and for companies wishing to succeed in the market, competitive analysis is crucial.

Competitive analysis can help you understand the ins and outs of how your competitors operate and identify potential opportunities where you can outperform them.

It also allows you to stay on top of industry trends and ensure that your product consistently meets and exceeds industry standards, according to various online business blogs.

Mariam Ishimwe, a business owner in the cosmetics industry, says a competitive analysis also helps in brand growth.

“Doing a competitive analysis gives you the opportunity to spot where innovation is needed, learn how to further promote your business and also improve your services or business, there are many competitors who are selling the same products as the yours or offer the same services, to outperform them, you will need to have a strong competitive analysis strategy,” she says.

How often to perform a competitive analysis

Eugene Kamali, Project Manager, says there should be no rules as to when or how often to conduct competitive analysis, as companies and businesses should always be ahead of their competitors.

“If a company decides to sit and wait to do a competitive analysis after about two years, the company is risking a lot in terms of promoting products and brands. Companies and companies need to protect their place in the market , so it is very important to always have recent, effective and accurate data on their competitors,” he says.

He also adds that businesses and companies should stick to their strategies and avoid reacting immediately when their competitors are going all over the place, it is better to analyze them thoroughly and study them because if they are rushed, they can also give poor results.

According to Business Daily, a competitive analysis, also known as a competition analysis, is a way of evaluating how your business and its products or services are performing against other businesses selling similar products or services in your market. .

A competitive analysis also helps you:

Identify your strengths and weaknesses.

Understand the market in which you operate.

Assess trends in your industry.

Plan for future growth.

How to conduct and create a competitive analysis

According to Josh Rovner, business consultant and best-selling author of Unbreak the System: Diagnosing and Curing the Ten Critical Flaws in Your Company, here are 9 steps to conducting a competitive analysis:

1. Identify the products or services you want to review.

For most analysis, these will be the products or services that generate the highest revenue or have the greatest potential for growth.

2. Look for direct competitors.

These companies are competing for roughly the same market with comparable products or services. For example, accountants competing with other accountants.

3. Identify indirect competitors.

These companies target the same market but with different products or services. For example, accountants competing with accountants.

4. Examine replacement competitors.

These companies offer a different product or service but address the same problem as your products or services (for example, apps that help entrepreneurs).

5. Determine which parts of your competitors’ businesses are worth investigating.

These aspects may be pricing, distribution and delivery strategies, market share, new products or services coming to market, who are their long-time and highest-spending customers, quality of after-sales support and the sales and marketing channels they use. .

6. Research all identified competitors.

You may only find minimal accounting and operational records for most competitors, especially non-public companies. Other useful information – like target customers, product features, type of staff employed, and prices – will be easier to find.

7. Document your research in a written analysis.

Make sure your document is substantial and actionable, but not too long that your staff won’t read it. Comparison charts and graphs are useful to help you and your team visualize where you stand in the market against your competitors.

8. Identify areas for improvement and execute changes.

Could you improve the quality of your products or services by adding or changing a feature, lowering the price to be more affordable, or improving after-sales service?

9. Track your results.

Measure your sales with a profit and loss account to determine if the changes were successful.

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