I'M THINKING OF STARTING A NEW BUSINESS
7. Why do I need a competitor analysis?
No matter what you’re selling, you have competitors. They may be down the street, or online, all over the world. Knowing as much as you can about your competitors will help you market your strengths effectively, and attract new customers.
When you first start to examine what your competitors are doing, their business may appear very similar to yours. However, when you look deeper, their products may be of poorer quality, or only attractive to a limited group of people.
What do I ask when performing a competitor analysis?
If you can, find at least five competitors in your prospective market, and answer the questions below for each one. The information you compile will become your competitor analysis.
- Where are they advertising? Are they advertising in print, or is it happening all online?
- What do their customers think about them? An easy Google search will bring up their business name, as well as customer reviews.
- What kind of products are they selling? Take a look at their website and find out if they offer anything that you don’t.
How do I use this information?
The information you now have should tell you about your competitor’s products and services, their customer service ethics, and their approximate marketing budget. Now it’s time to use this information to your advantage.
First, take a look at what your competitors are doing well. If they’re succeeding at something, work out how you can match or exceed what they’re achieving. Perhaps their website looks better than yours. Maybe their marketing material is more effective.
Your goal is to:
- Find out what your competitor’s strengths are. Then bring your business up to speed.
- Find out what their weaknesses are. Leverage your own strengths to attract customers.
- Work out how they approach customer service.
Get an advantage by taking on their best ideas, and working on your weaknesses.