Hubspot defines competitive analysis as “a strategy that involves researching major competitors to gain insight into their products, sales, and marketing tactics”. Have you ever wondered what your competitors will be doing, what strategies they are putting in place, and how they are scaling their businesses? It is a good start for you to care about what your competitors are doing. This is because it puts you in a position to know how to outsmart them and do better for your own business. However, it is not enough for you to keep wondering what these people are doing.
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It is also important that you research these competitors systematically and strategize how to beat them to their game. In this article, I will be outlining steps by which you can conduct a successful competitive analysis.
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Identify your competitors
You cannot solve a problem without identifying it. In the same vein, you cannot fully understand what your competitors are doing when you haven’t even identified who they are. Your competitors are those businesses that produce similar products or render similar services. This means, their products or services can pass as alternatives to yours. In your specific industry, look out for those businesses that are similar to yours. This way, you are ready for the next step.
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Determine your competitors’ traction
This involves finding out the market share of your competitors. What are their products and services? Who are their customers? What are they bringing to the table? At this stage, you will determine their traction, in terms of their sales process, yearly revenue and total sales volume. You will also have to find out their significance in the market and why their customers keep patronizing them.
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Examine your competitors’ pricing
Pricing is a significant part of any business, as it determines the value of each product and/or each service rendered. While conducting a competitive analysis, a vital point you should consider is the price structure of your competitors. This is because you will need that idea to set the price for your own products or services.
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Your price should not be too low, as this may be seen by your prospects as a low-quality product. Neither should it be unnecessarily high, as your potential customers will easily ignore you to patronize your competitors. So, you will have to know the price range and keep yours as competitive as possible.
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Identify your competitors’ marketing strategy
One of the most important factors in business is marketing. It is the bloodline of the business. Of course, without marketing, your business dies. If people don’t get to see your products, how will they buy them? You will have to identify what marketing strategies your competitors are employing. Check out their websites, social media pages, and even physical stores/outlets. Identify how they are engaging with their audience and how they are selling to them. Trust me, you will get one or two ideas on how to run your own marketing campaign.
Overall, learn about your competitors, the technology they use for their businesses, their content strategy, public outlook and customer service relationship. Identify key areas they are getting right or wrong, that is, their strengths and weaknesses. Write these points down and figure out how you can work on them to improve your own business.
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