Steps to Stay Ahead
of Competitors in Your Business
“I’ll insist my
competitor is the greatest so that when I beat him, I won’t be calling myself
the greatest — I’ll be proving it through my actions.” – Jarod Kintz
Knowing your
competition is an integral part of doing business. By identifying your
competitors and evaluating their strengths and weaknesses as they relate to
your own product or service, a competitive analysis is critical to staying ahead of
your competitors.
Running a small
business is usually very competitive. Small business owners have to deal with
more with than just trying to meet their sales goals, so you need to understand
your competitors in relation to your own business.
To learn about your
competitors takes time, requiring research as well as observation. Most
importantly, you need to turn the information gathered into action.
A Competitive Analysis
– Where to Start
The first part of your competitive
analysis only requires basic research. You’ll just be looking
up and making note of easy-to-find facts about your competitor’s business. For
this part, you’ll need to have some idea about who your small business
competitors are, where to find their website and social media pages, and
perhaps have access to their offline marketing materials such as brochures,
ads, and posters.
Here are the steps you
need to take to get started:
1. List
Your Competitors
Start by compiling a
list of at least three of your main competitors. Include those with a similar
product or service, as they usually serve the same market as your service.
Similar size is important too, so look for small or medium size businesses; as
big chains are not often a direct competitor.
2. Write a
Brief Overview
Write a brief
description of the competitor’s business and why you consider them as a
competitor.
3.
Targeted Customers
Identify the customers
that competitors tend to draw. Review their marketing materials, social media,
website, blog, where they advertise, etc. This material provides information on
your competitor’s targeted market. The information most likely will include a
variety of demographics such as age, location, income and if a product or
service is geared specifically to gender.
Also, your competition
may have separate marketing messages for different segments of its
demographics.
4.
Competitor Pricing
Be sure to list how
your competitors price their products and services. Include other information
such as pricing for credit cards or installment purchases, pricing for product
and service packages, and, of course, shipping fees.
In-Depth Competitive
Analysis
Once you have gathered
the basics about your business rivals, take time to look deeper and explore
behind their scenes strategies.
5. Itemize
Their Marketing Strategy
Marketing is one of
the main areas where you will compete directly you’re your competition. Most
small businesses to do not have the resources to engage in expensive marketing
plans, but it is essential that your customers become familiar with your company
and its message, as they will more likely choose you when making
their purchase.
It is important to understand
your competitors
marketing messages as well as your own. Evaluate the following:
- Print Marketing
- Social Media
- Website
- Blog
- Advertising
- Promotions, Sales, or
Events - Partnerships
6.
Identify Any Competitive Advantages
Find out what
competitive advantage, if any, your business rival may have. What do they offer
that others do not? How do they outperform their competition?
Look into some of
these possibilities:
- targeting a highly
specific market - lower prices
- frequent discounts and
promos - location
- compelling marketing
(such as memorable imagery, taglines, or jingles) - large online audience
via their website,
blog, or social media accounts - broader range of
products and services
As you review these
possibilities, think about your own competitive advantage can be and locate
areas where you can do better than your competitors.
7.
Competitors Strengths and Weaknesses
As you complete the
research on your competitors, it is time for a summary and analysis. List all
aspects of the competition and note both strengths and weaknesses. Under
strengths, note how well you are equipped to deal with those strengths and how
you could outdo them elsewhere.
Take the same approach
for their weaknesses. Are their weaknesses an opportunity for you? Can your
competitors overcome their weaknesses easily and if so, will that affect your
business?
Know the Competition
If you have followed
the steps and completed a competitive analysis, you will have an in-depth
understanding of your competitors as well as your own business. Now is the time
to act.
The new insights you
have learned may require making necessary changes to your business
plan. Will you need to adjust your pricing – do you need to redirect
marketing avenues? Review the analysis – take the steps!
You will not need to
contend with your competitors in all aspects of doing business – everything
from marketing to product or service quality – but you should concentrate on
several things to increase competitive advantage.
Without adjusting your
plans in some manner, your business may be undercut by tough competition. Keep
in mind, rival businesses are likely doing a competitive analysis of your
business too.
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