What you should know about competitive analysis
An important part of your business marketing plan will be based on what the competition is doing. You will always need to be aware of what is going with your competition but especially when it comes to planning your marketing. You should never assume that you don't have competition or that the competition in your market doesn't matter because you have such a great product or service. The bottom line is that if you want your business to succeed for the long term you will need to do a competitive analysis. A competitive analysis will allow you to know the strengths and weaknesses of your competition along with giving you insight as to how to outperform them. The reality is that if you can't outperform your competition then there is little chance that your business will succeed for the long term. Here is what you should know about competitive analysis-
- Know who your competition is-The first step is to have a clear idea of who your competition really is and identify them. The most basic definition is any business that offers the same product or service as your business. However, you should also include: any business that sells a similar product or service. In addition, you should also include: any business that may sell a product or service in the future that could make what you sell obsolete.
- Know where your competition is-Not to long ago, businesses only had to consider the competition that their customers could physically get to. Today competition for most businesses has changed dramatically. You should not forget to consider any business that can be reached by your customer through the use of the internet. This means that your competitive analysis may have to expand to include businesses that are halfway across the world.
- Know what kind of information you need to gather-Now that you know who your competition is and where they are it is time to gather the information that you will use in your competitive analysis. You will want to collect the most specific data that you can. This should include any information that will show how the business operates, what their strengths are, and what weaknesses that they have. It is extremely important to know that those weaknesses are so you that you can play up your strengths in comparison.
- Know where you can find the information-When you are doing a competitive analysis you will need to examine: financials, management data, information about their products and any information about how they operate, service, and market their business. Doing a competitive analysis can may require you to look at public records, check out business plans, look at public financial documents, and even reverse engineer their products. It is important to understand that this process can take time and cost money in the data collection but it can pay off big when you have a clear understanding of your competition and you can include it in your marketing plan.
- Know how to use the information-Once you have gone through the steps of doing a competitive analysis then you can begin to use the information you have gathered. Keep in mind that the main purpose of the data collection was to know how to better structure your marketing plan. Carefully look at the data that you have gathered and determine how you can market your business to an advantage. It should be noted that while it may seem advantageous to use what you have learned in a negative ad campaign this is rarely successful with your customers and should be avoided.