Competition is healthy for businesses. It strategically encourages organizations to innovate, adapt, reinvent, and stay ahead of market trends. You get a clear picture of your shortcomings, identify ripe market opportunities, and fix areas of improvements. Competing in a ‘fair’ way rather than like a ‘war’ helps take inspiration while maintaining authenticity which leads to sustainable growth and mutual respect among competitors. This goes a long way in benefiting businesses and their customers thus achieving perpetual advancement and prosperity.
However, how to get started with competitive analysis to know and strengthen your market position? Well, this process is more like a learning experience and involves several key steps to gain valuable insights into the business landscape. Read on to know how to analyze competitors in business to evaluate your market position, fuel your competitiveness and eventually drive the wheels of your business forward.
1. Identify Competitors
The first step to determining your market position is to know who exactly are your competitors. Start by categorizing them into direct, indirect, and emerging ones. This can be done by using competitive analysis tools like Siteliner and SE ranking and keywords on which your competitors are ranking on Google. Next could be a detailed SWOT analysis that typically assesses strengths, weaknesses, and threats of companies to fine-tune your market strategies.
Further, wading through industry reports, competitor’s websites, and rigorous market research could prove extremely effective in finding companies that are selling the same products and services that could compete with yours. Altogether, these will shape your competitive analysis framework and help businesses position themselves in terms of branding and customer perception on a global scale.
2. Assess Market Position
After a comprehensive understanding of competitors, it is crucial to analyze your image and reputation among a sea of fellow businesses. There are multiple positioning strategies around parameters like product costs, product quality, and product features, benefits, and application. For instance, in terms of quality, services, and price, it could be a luxury brand, global, or a corporate brand. It is a good idea to see how competitors are positioning themselves to help identify gaps and create a unique selling proposition (USP) to differentiate yourself.
3. Study Financial Performance
One of the core steps to determining your market position is to look for market share data, revenue trends, annual reports, profitability ratios, liquidity ratios, and pricing models to get a fair idea of their financial strength. Evaluating third-party reports from companies like Gartner or investment bank reports, especially for publicly traded companies can be helpful. Lastly, stock price trends and market capitalization can also be ideal ways to understand where you stand in comparison to your competitors.
4. Review Digital Presence
It is a good idea to use tools like Ahrefs, SEMrush, and Google Trends to analyze competitors’ traffic, SEO strategies, and overall online activities. Consider tracking their social engagement metrics and ad campaigns to see what they are doing differently. Data-driven strategies are a fantastic way to get a fresh perspective on consumer behaviour and shifts. Further, it can also give you a glimpse into their tech adaptations and advancements that typically keep them in the forefront of the minds of your target consumers.
5. Analyze Service Offerings
The best way to start is to gather a complete list of competitors’ products and services. Study details like the variations in range, features, and bundled offerings. This will offer transparency in how they meet distinct customer demands to ease their pain points. Now, compare the same with your service line to check for inefficiencies and build strategies to fix them.
Additionally, break down and examine the following:
- payment terms
- pricing models
- quality and performance
- marketing and promotional tactics
- distribution channels
- customer feedback, and
- innovative approaches.
Make sure you are at par and then brainstorm strategies to outshine your competitors. Look for upcoming market trends or innovations to refine opportunities and step into new markets.
Conclusion
In an era of rapid advancements in the business landscape, competitor analysis is not just about benchmarking but having a clear foresight into the future. However, conducting this accurately on your own might be time consuming. Therefore, consider partnering with trusted consulting and advisory companies like Inductus to refine your value propositions. Our team has a proven track record of relentlessly delivering superior client experiences. Our strategic tips and recommendations help businesses analyze and redefine competition.
