In any industry, competition is a fact of life. Understanding your competition is essential for businesses that want to stay ahead of the curve and succeed in the long term. In this article, we’ll look at the key steps involved in analyzing your industry competition, and how you can use this industry competition information to stay ahead of the game.
Points to cover:
- Identify your main competitors.
- Define what competitive information to look for
- Research your competitors’ strengths and weaknesses.
- Analyze their marketing strategies.
- Look at their pricing strategy.
- Assess customer feedback.
- Identify opportunities and challenges.
- Develop a strategy to stay ahead.
The purpose of the competitive analysis is to identify the strengths and weaknesses of its competitors in order to anticipate the threats that weigh on its market, and to understand what differentiates these rivals from the customer’s point of view. This study makes it possible to build competitive strategies by developing solid competitive advantages.
This information is very important for optimizing the business strategy, developing a marketing plan, or building an effective business plan.
Similarly, conducting a competitive watch (internet watch with google alerts, technology, etc.) is essential to counter the commercial and marketing offensives of the main competitors.
How to Analyze and Stay Ahead of Your Competitors?
Analyzing and staying ahead of your competitors is crucial for maintaining a competitive edge in any industry. Here are some strategies and steps you can follow to effectively analyze and stay ahead of your competitors:
1. Identify your main competitors and clarify study objectives
To effectively analyze industry competition, it is important to first identify your main competitors and clarify your study objectives to ensure you are gathering relevant and actionable insights.
Start by identifying who your main competitors are. This could include businesses that offer similar products or services, or those that target the same customer base.
Beforehand, you must clearly state the reason for your research on the competition. In particular the decisions impacted by the final results.
- You want to design a new product and need to know the existing offers on the market, their strengths and weaknesses.
- You are an entrepreneur and conduct a market study to estimate what positioning to adopt in the face of competing offers.
- You have identified a weak point in your organization and want to conduct a benchmarking study using the best in your sector as a reference.
- You seek to know the selling prices practiced by the competitors in place to design competitive prices (price watch).
- Your objective is to identify the most threatening competitors to anticipate risks and build an offensive strategy on your environment.
2. Define what competitive information to look for
When conducting an analysis of industry competition, it is crucial to define what competitive information to look for in order to focus your research and gather valuable insights to inform your business strategy.
From the objectives that you have just determined, locate the necessary information that will allow you to answer your questions.
- Image perceived by customers.
You have in hand the key elements to collect during your study.
3. Research your competitors’ strengths and weaknesses
Conduct research to understand your competitors’ strengths and weaknesses. This could include factors such as product quality, customer service, pricing strategy, marketing approach, and market share.
Once the data has been collected and classified, it is time to analyze it. This step is also called competitive benchmarking. A competitive benchmark is a study resulting from the observation and analysis of competitors’ practices.
There are several tools that help achieve this benchmark. Each tool brings out different information.
To research your competitors’ strengths and weaknesses as part of an industry competition analysis, you can follow these steps:
- Identify your competitors: Start by identifying your competitors in the industry. This could include both direct competitors who offer similar products or services, as well as indirect competitors who offer alternative solutions.
- Analyze their products or services: Analyze your competitors’ products or services to identify their strengths and weaknesses. Look at the quality of their products or services, their features and benefits, and their pricing strategy.
- Evaluate their marketing and sales strategies: Evaluate your competitors’ marketing and sales strategies to understand how they are promoting their products or services. Look at their branding, messaging, and channels of distribution.
- Look at their customer service: Look at how your competitors are delivering customer service.
- Are they responsive to customer inquiries and complaints? Do they provide high-quality support to their customers?
- Analyze their financial performance: Analyze your competitors’ financial performance to understand their revenue, profitability, and growth potential. Look at their financial statements, including their income statement, balance sheet, and cash flow statement.
By researching your competitors’ strengths and weaknesses, you can gain valuable insights into how they are positioned in the market. This information can help you identify areas where you can differentiate yourself from your competitors and gain a competitive advantage.
It is necessary to refer to the objectives set at the start to choose the most relevant method:
- Competitive mapping: this is a graph made up of two axes. Each axis reflects a variable chosen according to the objective of the analysis. The goal for the company carrying out the analysis is to identify a market segment that differentiates it from other companies.
- SWOT analysis: this matrix is made up of 4 boxes which allow a complete diagnosis of the market to be established: strengths, weaknesses, opportunities, threats. The SWOT matrix provides an overview of the company’s situation in its market environment.
- The BCG method: this matrix makes it possible to classify competitors into 4 categories according to the degree of maturity of their offer on the market.
- The competitive analysis grid: this grid makes it possible to note the strengths and weaknesses of each competitor in order to compare them and deduce an analysis.
It is quite possible to combine several of these tools to obtain a more exhaustive analysis.
4. Analyze their marketing strategies
Look at your competitors’ marketing strategies to see how they are promoting their products or services. This could include advertising campaigns, social media presence, and email marketing.
To analyze the marketing strategies of your competitors as part of an industry competition analysis, you can follow these steps:
- Identify your competitors’ marketing channels: Start by identifying the marketing channels your competitors are using to promote their products or services. This could include social media platforms, email marketing, search engine optimization, pay-per-click advertising, or offline advertising.
- Analyze the content and messaging: Once you have identified your competitors’ marketing channels, analyze the content and messaging they are using. Look for the tone, style, and language of their messaging, and see how it resonates with their target audience. Are they emphasizing their product quality, pricing, customer service, or any other benefits?
- Evaluate the effectiveness of their marketing campaigns: Look at the performance metrics of their marketing campaigns. This could include metrics such as website traffic, click-through rates, conversion rates, and customer engagement. Analyze how effective their marketing campaigns are in terms of driving traffic, generating leads, and converting sales.
- Assess their social media presence: Look at your competitors’ social media presence and see how they are using it to engage with their audience. Analyze the content they are sharing, the frequency of their posts, and the level of engagement they are generating.
- Research their online reputation: Look at the reviews and feedback of your competitors online. See what customers are saying about their products or services, and analyze how they are responding to customer feedback.
By analyzing the marketing strategies of your competitors, you can gain valuable insights into their approach to customer acquisition and retention. You can also identify gaps in their marketing strategies that you can capitalize on, and improve your own marketing campaigns based on their successes.
5. Look at their pricing strategy
Analyze your competitors’ pricing strategy. This could include factors such as their pricing structure, discounts, and special offers.
To analyze the pricing strategy of your competitors as part of an industry competition analysis, you can follow these steps:
- Identify the pricing model of your competitors: Start by identifying the pricing model of your competitors. Are they using a cost-plus model, value-based pricing, or a market-based pricing model? This will give you an idea of how they are setting their prices.
- Compare your prices with your competitors: Compare your prices with your competitors’ prices for similar products or services. This will give you an idea of where you stand in the market in terms of pricing. Look for any significant differences in pricing and try to understand the reasons behind them.
- Analyze their pricing strategy: Analyze the pricing strategy of your competitors. Are they using a penetration pricing strategy to gain market share, or are they using a premium pricing strategy to position themselves as a luxury brand? Look for any patterns or trends in their pricing strategy.
- Evaluate the impact of their pricing strategy: Look at the impact of your competitors’ pricing strategy on their sales volume and market share. Analyze how customers are responding to their pricing strategy and see if there are any opportunities for you to adjust your own pricing strategy.
- Assess the value proposition: Look at the value proposition of your competitors and see how they are positioning themselves in the market. Analyze if their pricing strategy aligns with their value proposition and see if there are any areas where you can differentiate yourself from them.
By analyzing the pricing strategy of your competitors, you can gain valuable insights into their approach to pricing and positioning themselves in the market. You can also identify areas where you can improve your own pricing strategy and gain a competitive advantage.
6. Assess customer feedbacks
Look at customer feedback and reviews of your competitors to understand what customers like and dislike about their products or services.
To assess customer feedback as part of an industry competition analysis, you can follow these steps:
- Identify sources of customer feedback: Start by identifying the sources of customer feedback for your competitors. This could include reviews on their website, social media platforms, and third-party review websites.
- Analyze customer feedback: Analyze customer feedback to gain insights into their satisfaction level with your competitors’ products or services. Look for common themes in the feedback, such as quality, pricing, customer service, and product features.
- Look for areas of improvement: Look for areas where your competitors can improve based on customer feedback. This could include improving the quality of their products or services, enhancing their customer service, or introducing new product features.
- Assess response to customer feedback: Look at how your competitors are responding to customer feedback. Are they addressing customer concerns and complaints in a timely and effective manner? Are they using customer feedback to improve their products or services?
- Evaluate customer loyalty: Evaluate customer loyalty for your competitors by analyzing repeat purchases, customer retention rates, and customer referrals. This will give you an idea of how satisfied customers are with your competitors’ products or services.
By assessing customer feedback, you can gain valuable insights into the strengths and weaknesses of your competitors. You can also identify areas where you can differentiate yourself from your competitors and improve your own products or services based on customer feedback.
7. Identify opportunities and challenges
Use the information you’ve gathered to identify opportunities and challenges in your industry. This could include gaps in the market, areas where your competitors are falling short, or new trends that could impact your business.
To identify opportunities and challenges as part of an industry competition analysis, you can follow these steps:
- Conduct a SWOT analysis: Start by conducting a SWOT analysis for your competitors. This involves identifying their strengths, weaknesses, opportunities, and threats. Use this information to understand how your competitors are positioned in the market.
- Analyze market trends: Analyze market trends to identify potential opportunities and challenges for your competitors. Look for emerging trends that could impact their business, such as new technologies, changes in consumer behavior, or shifts in the competitive landscape.
- Evaluate market saturation: Evaluate the level of market saturation in your competitors’ industry. If the market is saturated, it may be difficult for new competitors to enter. However, if the market is underserved, there may be opportunities for your competitors to expand their customer base.
- Look for gaps in the market: Look for gaps in the market that your competitors are not addressing. This could include underserved customer segments or unmet customer needs. Identify ways that your competitors can fill these gaps to gain a competitive advantage.
- Consider regulatory and legal issues: Consider regulatory and legal issues that could impact your competitors’ business. This could include changes in regulations or lawsuits that could impact their reputation or financial performance.
By identifying opportunities and challenges, you can gain a better understanding of your competitors’ position in the market. You can also identify areas where you can differentiate yourself from your competitors and gain a competitive advantage.
8. Develop a strategy to stay ahead:
Use the insights you’ve gained to develop a strategy that will help you stay ahead of your competitors. This could include developing a unique selling proposition, improving your customer service, or investing in new marketing strategies.
To develop a strategy to stay ahead in industry competition, you can follow these steps:
- Analyze your strengths and weaknesses: Conduct a SWOT analysis to identify your company’s strengths and weaknesses. This will help you understand where you stand in the market and where you have room for improvement.
- Identify your competitive advantages: Identify your competitive advantages, such as your unique value proposition, superior product quality, or innovative features.
- Analyze your competitors: Conduct a thorough analysis of your competitors to understand their strengths, weaknesses, and strategies. This will help you identify areas where you can differentiate yourself and gain a competitive advantage.
- Monitor industry trends: Stay up-to-date on industry trends and changes that could affect your business. This will help you anticipate changes in the market and adjust your strategy accordingly.
- Focus on innovation: Continuously innovate and improve your products or services to stay ahead of the competition. This could include developing new features, improving quality, or introducing new products or services.
- Build strong customer relationships: Focus on building strong relationships with your customers by providing excellent customer service, addressing their needs and concerns, and delivering value.
- Stay agile: Be prepared to adapt your strategy as needed to respond to changes in the market or competition. This could include adjusting your pricing, changing your marketing strategy, or introducing new products or services.
By developing a strategy to stay ahead, you can differentiate yourself from your competitors and position your company for long-term success in the industry.
For example, if you run a clothing store, your main competitors might include other clothing retailers in your area or online. You could research your competitors to identify their strengths and weaknesses, such as their product quality or customer service. You could also analyze their pricing strategy and marketing approach, as well as look at customer feedback and reviews.
Based on this information, you could identify opportunities to differentiate your business by offering unique products, improving your customer service, or investing in a new marketing approach.
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