Competitor analysis studies your rival’s marketing tactics, operations, and more. It lets you predict their activities enough to expect their actions and stay ahead of them.
There’s nothing wrong taking a peek over your competitor’s activities. After all, you want to know what ticks your potential customers’ likes and dislikes. A little competition is good – unless you copied their exact marketing science and get framed for it.
Advantages of competitor analysis
Competitor analysis is a method in which your business considers the strengths, weaknesses, opportunities, and threats of your competitor. Every day, huge companies are gathering data from their competitors. But the method is not recognized by small business owners as a profitable assessment.
Here are advantages competitor analysis can offer to small businesses.
Spot industry trends via competitor analysis
It’s an investment for your business to forecast future developments in your industry. You can check the information you gathered from your rivals and see where the industry is going. For instance:
- Are your competitors shifting to environmental products?
- Do they have apps for easier mobile usage of customers?
- Have they made changes to their marketing structure?
So, are you making changes to new trends?
Study your market and potential customers
Competitor analysis can show you gaps in the market and customers’ preferences. It lets you recognize the products or services you have and don’t have.
For example, you offer body protection products such as wrist bands or ankle wraps. Your main audience might be gym buffs, but you can offer these products to general people experiencing body pain.
Learn from your competitor’s failures
Why would you do that mistake for yourself? Learn what mistakes your competition did and how to make it right for you next time. Did they launch a new product at the wrong time? Was their social media platform working for them?
Capitalize on their failures and weaknesses so you can gain vantage points. You can even avoid costly mistakes by preventing the same failures from happening.
Possible development of products and services
If you want to diversify or improve your products and services, see if there’s a market for it from your competitor. If you’re a digital marketing company, do provide custom and template websites? Or graphics and animation services?
At the long run, it lets you tap and handle the aggregated competition.
Find potential partnerships
So, you’ve butt heads with other competing industries. Why not collaborate instead? For example, you’re a publishing company and you don’t have resources to print in large channels. But, another publishing company has the capabilities to do so.
There are instances where publishing companies offer printing services for smaller publishing houses. They can claim ownership of the product after it’s printed according to on the issued contract.
How to conduct competitor analysis
Conducting a competitor analysis may seem like another job. And while at first, this might seem daunting, they’re not that complex. They’re useful for business operations and direction. If you want to start performing an analysis on your rivals, here’s what you need to do.
Know your competitors to complete your Competitor Analysis
Even if you’re a small business owner, you need to assemble a list of competitors within the industry. Not knowing your competitive space is actually dangerous for your business. So, keep a lookout for the following:
- Business offering the same products and services
- Same companies within your industry sphere
- Similar industry players with having the same customers as yours
Also, categorize your rivals at various levels whether their performance competes with yours. You can place them as Competitor 1, 2, and 3, or Primary, Secondary, and Tertiary.
Identify key business operations from your rivals
There are key operations you need to identify and track from your business rivals. The more you can detail their activities, the more you can tune your marketing tactics and create a thorough competitor analysis. Here are valuable insights you can take down notes of:
- Brand identity, design, and values
- Products and services
- Distribution channel
- Marketing activities, channel, and devices
- Media activities
- Annual report
- Number of employees
- Business owner
- Their partners
- Where they get their resources
- Strengths, weaknesses, opportunities, and threats (SWOT)
Write down your brand operations and analysis
After identifying your competitor’s activities, make a similar note on your business. Ask yourself:
- Where do you stand out as a small business owner?
- What are your available resources?
- What is your SWOT?
While articulating your own business operations, be honest, authentic, and original.
Make comparative analysis
Now that you’ve put the two lists together, make a comparison between your rival’s activities. It will be hard for you to look at some weaknesses and threats for your business. But it’s necessary to make adjustments for your business operations.
Create your operation plans & competitor analysis
Create a business plan with specific actions to meet your goals.
Write your action plans. Should you add a new service? Or, would amplify your social media marketing strategy? When writing your actions plans, make sure to integrate SMART goals.
SMART = specific, measurable, attainable, realistic, and time-bound
Focus on which you need to do first. Don’t make the mistake of launching all your new ideas. Not only it’s detrimental for you, but it can worsen your business operations. Instead, take your time in crafting the perfect marketing scheme or service launch.
Plan your budget or resources. Budget and resources keep you grounded, but, it can also bring out the best in your creativity. For instance, you don’t have any resources to hire a person for your marketing team, so you use social automation. And instead of having a salesperson, you offer re-selling programs to affiliates.
Execution of plans. Executing plans is a craft you need to study. When do you think you should launch your new product? Is it good for the seasons? When will you have that Facebook ad campaign running? Things may go out of hand for your execution, but, it’s important to stay flexible in the market.
Review and measure operational activities. We mentioned that you need to set SMART goals. When creating SMART goals, you need to measure if you’ve accomplished those goals. Have you indeed reached 1,000 followers on Facebook? Have you sold 200,000 pairs of shoes in a year?
The takeaway on competitor analysis
Done making your competitor analysis? You now have a clearer concept of what your rivals are doing after carrying out a comparative study. Use the data you’ve collected from your competition and know what needs improvement.