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  Your business almost certainly has competitors. Maybe they’re mostly small-time ventures just trying to get by. But if your industry is like most, there are at least a few large players in it as well. Regardless of how great or little they may be, your competitors could capture a good deal of the people in your potential customer base. That’s something you should be concerned about.
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If you’d like to get ahead of the other outfits in your space, you’ll want to know what they’re up to, and what their strengths and weaknesses are. And that’s what a competitive analysis is about—discovering the strong and weak points of your rivals, so you’re better able to get past them. This article tells you how to do so, in seven steps discussed below:

Identify Competitors

The first step in conducting a competitive analysis is to identify the competitors in your industry. You can do this by researching the market and finding companies that offer products or services similar to yours. It is important to include direct competitors, who offer products or services like your own, and indirect competitors, who sell substitutes or alternatives to your solutions.

Determine the Competitive Landscape

After you have identified your competitors, you may go on to survey and plot out the competitive landscape. This involves analyzing the size, market share, and growth rate of each competitor. You can use the information you glean from this to identify your most significant competitors and decipher market trends.

Analyze Competitor Products and Services

Next, analyze the products and services that each competitor offers. Thoroughly examine their unique selling points, pricing strategies, and marketing tactics. Probing these factors will help you identify aspects of your services or operations in which you can differentiate yourself from the competition.
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Understand the Competitor’s Target Market

It is important to understand the target market of each competitor. There are good reasons to do this. One is the fact that their market is almost always the same one you’re aiming to reach. When you understand their market, you’ll have a greater chance of beating them there. Evaluating your competitor’s target market will involve analyzing the demographics, behaviours, and preferences of their customers.

Evaluate the Competitor’s Strengths and Weaknesses

To gain a competitive advantage over your rivals, you’ll need to identify their strengths and weaknesses. This means noting their marketing strategies, distribution channels, customer service, and reputation. When you learn how these factors work, you can create a better business strategy that addresses your competitors’ weaknesses.

Identify Opportunities and Threats

A crucial part of your competitive analysis is identifying opportunities and threats in the market. You will want to scrutinize industry trends, weigh new technologies, and understand changing consumer behaviour. Thorough knowledge of these phenomena allows you to develop new products and services that meet the evolving needs of the market.

Create a Competitive Advantage

The final step in conducting a competitive analysis is to create a competitive advantage. This is basically about using the information you’ve gathered in the previous steps to develop a business strategy that differentiates your company from its competitors. This may involve creating new products or services, improving marketing strategies, or developing new distribution channels.
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Final Words

If you want to achieve exceptional growth in your industry, you will need to understand your competitors. Your business will likely struggle if you don’t beat your competitors at the game of securing customer loyalty. By following the steps we’ve talked about here, you can gain a competitive advantage and succeed in your domain. Featured Image Source: LegalZoom
Did you find this article useful? Contact us: editor@connectnigeria.com
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This article was first published on 14th April 2023

ikenna-nwachukwu

Ikenna Nwachukwu holds a bachelor's degree in Economics from the University of Nigeria, Nsukka. He loves to look at the world through multiple lenses- economic, political, religious and philosophical- and to write about what he observes in a witty, yet reflective style.

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