When we have a business it is necessary to understand that we must carry out the competitor analysis. Do you know what competitor analysis is? Well, throughout this article we show you the best ways to do it correctly.
Table of Contents
- 1 Analysis of the competition
- 1.1 Meet the competition
- 1.2 Competition Highlights
- 1.3 Analysis of the competition How to do it?
- 1.4 The importance of competitor analysis
- 1.5 Decision making in competitor analysis
- 1.6 Analysis of the competition from marketing
- 1.7 Relationship between brand, costs and customer satisfaction
Analysis of the competition
When we decide to start a business, we need to remember that competition exists. Before attacking this as a business, we must define the term competition. According to the Royal Spanish Academy, competition is defined as:
“Situation of companies that compete in a market offering or demanding the same product or service”
So when we consider opening a business we must understand that our entrepreneurship is based on competing. Although we believe that our product is original, we must study each of the variants that are born around it.
When we establish our business idea, we must carry out an analysis surrounding the competition in order to establish whether our idea is feasible or not. When we do the different competition analysis it is necessary to compare our marketing strategies with others in order to establish the differences. In the following link of the SEO tools and to optimize our brand in the different search engines.
Now, how can we create an analysis of the competition correctly and effectively? Next we will give you a guide to know, evaluate and be able to overcome the competition.
Meet the competition
When we are trying to innovate a new product or service to bring to market. We must carry out this analysis of the competition to be able to identify the benefits and weaknesses in order to overcome our competitors. The competition that affects our business can be classified into:
When we refer to direct competition we are talking about the companies or brands that sell or promote our product or service. Therefore, it is necessary to study them in a complete and detailed way.
When we refer to the direct competitor, it is the one that comes to mind when we talk about competition. A clear example can be seen in the fast food service McDonald's and Burger King offer the same products to the same group of customers so they are considered direct competition.
When analyzing these definitions, we find that customers will define their tastes in different attributes such as price, quality, level of service and experience with the brand. It is necessary to understand that in this digital age, consumers will look for as many options as they can to get the best deals on the market.
It is defined as the competition that supplies different products but that fill the same need as yours. In more conceptual words, indirect competition is the rivalry that exists between companies that make slightly different products but seek to capture the same clientele as our brand.
A clear example of this definition is found in the same way in the fast food business. McDonald's indirect competition may be Little Joe's, they do not offer the same product but their market is the same.
In the following video we will find the clearest differences between direct and indirect competition
When we have identified who our direct and indirect competition is. The next step in competitor analysis is to determine what makes those brands stand out.
The first thing we should study are their products or services and how they have developed their brand. It is of the utmost importance to take possible suppliers into account since we can carry out cost studies that allow us to offer a better price than our competition.
On the other hand, we must study their different market strategies in order to establish the How do they sell it? What are the distribution channels? How do they market it? In order to establish our marketing strategies we leave you the following link which are the best marketing trends today.
On the other hand, we can study the volume of sales generated by our skills to have a more or less clear landscape regarding the demand that we could cover. In the same way, we advise you to carry out a price study to find out if you are at a point of competition. If we are above it, it will be difficult for us to position our brand.
Analysis of the competition How to do it?
The best advice we can have to analyze our competition, whether direct or indirect, is to observe. We must observe each of its facets to recognize its strengths and weaknesses. When we establish which are the outstanding aspects of our competition, observing will be more practical.
It becomes practical and simple since when establishing the elements that we want to study we can use tools such as the internet. Which provides us with information with prices, offers, combos, points of sale among other things.
Regarding the marketing they are using, you can observe the different advertising campaigns that are generated around our competition to know which of the strategies they are using. In order to better understand how to make an analysis of the competition that is effective, we leave you the following video
The importance of competitor analysis
As we have already determined, one of the first things we must do to start a business idea is the analysis of the competition, but why is it important to carry out this analysis?
The main objective of the analysis of the competition is that we can determine which ones and how we can satisfy the different needs of our future clients.
Today, thanks to globalization, we must be more aware of the importance of competition. We are no longer competing in our locality. We are competing with the different brands worldwide. That is why it is necessary for our project to be sustainable and organized to achieve a good position.
This is not to say that establishing the brand will be easy. We must establish trust among consumers. So we must demonstrate each of our promises with facts.
In the same way, it is of the utmost importance to carry out the analysis of the competition because thanks to this we can learn from experiences that have passed. When we are a new brand, we can learn from the crises of brands that work with products or services similar to ours.
From what we have read we can define that the main and primary objective of the analysis of the competition. It is predicting possible responses within the market and being able to establish business routes that will show us the most feasible path.
Decision making in competitor analysis
When we carry out all the steps and the points that we have exposed in this article, it is necessary that we make decisions. The collection of competition data will give us an approach of what are the main strengths, weaknesses and strategies used by the competition.
Which will give us enough information to make the right decisions regarding the approach that we should give to our brand. If we can establish what is the price ranking that our competition manages. We can make financial adjustments that allow us to specify a better sale price that benefits us in front of the competition.
If when performing the analysis of the competition and we determine that our product is weaker than that of the others. We can make adjustment of service and marketing to be able to perfect it. We need to understand that if our products undergo any changes we must notify the public. This in order to show our customers that we are improving in quality and service.
On the other hand when studying the marketing strategies used by our competition. We can find different and improved trends to position our brand. One of the things that we have in our favor in this digital age is that we have tools that allow our interaction with customers to be dynamic. Let us remember that nowadays the priority of our users is the familiarity and the good treatment that we give them.
It is important to emphasize that the analysis of the competition is carried out only once and that it is at the beginning of the execution of the business idea. Therefore, we must carry out this task in a conscious manner to cover these needs from the outset.
Analysis of the competition from marketing
When we refer to the analysis of the competition from the marketing point of view, we find different types of dimensions that we must consider. Among which we are
This is one of the analyzes that we must highlight regarding marketing. Since thanks to him we can know what our position is with respect to the rest of the brands. When we establish what position the competition is in, we establish positioning strategies.
The identification of the points of sale of our competition is essential to understand what our strengths are. In the same way, this analysis presents us with a real picture of our weaknesses with respect to the competition. On the other hand, it reflects the sales volumes, growth and expansion from a global point of view.
Investment in Advertising
When we identify the marketing strategy that the competition is using. We can make the appropriate investment and achieve the goals we set for ourselves through advertising.
Similarly, it is necessary to recognize the importance of social networks in this digital age. Which connects us quickly, exponentially and clearly with our clients. So we can use this digital push in our favor so that our brand is cataloged and recognized by the different types of clients that may come to us.
Communication today thanks to globalization can be fast and clear with our customers. We can use the different channels such as emails, instant messages or chats that facilitate the conversation between our brand and users.
Relationship between brand, costs and customer satisfaction
At this point it is important that we monitor each of the activities that we have established with the brand. Since through the positioning of the brand we were able to establish a sales plan that meets our needs.
On the other hand, relating the cost structure with our competition analysis. It allows us to establish the different logistics processes that feed our cost structure. Having a cost scheme that helps us identify which processes are repetitive or where our greatest money leak is is essential to achieve the best management of resources.
When we manage to carry out an analysis of the competition in an optimal way, we manage to establish important standards to cover the needs of the clients. The satisfaction of each of our users must be paramount. Let us remember that the best publicity is the mouth or mouth. If a client has a pleasant experience with us, we can be sure that he will come back and recommend us.
For all the above, we invite you to carry out your analysis of the competition. In order that you can position your brand and establish your business plan. Finally, let us remember that the analysis will show us the strengths and weaknesses of our competition.