Systematic competitive analysis can assist you in marking opportunities to evolve, promote your business, enrich your products or services and surpass your competitors.
Most businesses today crashed because of their inability to monitor their growth from every angle. At any stage of any business, competitive analysis should be carried out to identify, differentiate competitors, research their strategies in marketing and assess their strengths, weakness, opportunities and threats. A competitive analysis is like examining and getting reports for your business- a plan to help your business grow and succeed. Every business should understand a competitive analysis, the strategic method, and its advantages/disadvantages.
First and foremost, we need to understand a market analysis before undertaking the competitive analysis.
A market analysis is a rigorous evaluation of merchandise within a specific industry. The critical success factor in any business is knowing who your customers are, their needs and terms of service delivery. Your business could suffer so much of a struggle till you figure out a viable marketing strategy. It is a very comprehensive process to conduct. When running your strategic market analysis, you need to survey by knowing your prospective clients/customers, their buying strength, your market size, the cost of your product/service, your competitors, and the strength and weaknesses of your competitors. Remember, for any business to succeed, it must be handled in a way it emerges to grow. Your market analysis should be part of the plan for any company since it gives a more profound knowledge about who your customers are and your competition. There are different advantages and disadvantages of conducting a market analysis. Some advantages include-
Risk Devaluation– Understanding your business can reduce risk since you understand the company’s growth cycle. Most businesses suffer because of the owner’s inability to understand their business; some businesses are born out of wanting to do what others are doing and not for the passion of it. To protect your business, you can also analyse its strengths, weaknesses, opportunities and threats.
Operating a business is sometimes complicated and very tasty because you need an update about global trends, what’s in Vogue and what your customers need. Looking at a niche like Startup Of London is an example of a media company that aims to be the voice of a startup ecosystem. For it to be constantly in the trend and outshine its competitors, it needs to understand what the public is looking for and the ability to tell the success and failure stories of businesses, startups and entrepreneurs with documentaries, podcasts and other social media platforms.
A prediction is significant when doing a marketing analysis because it gives you an idea of your expectations in terms of goals, characteristics, current trends, and the profits you can expect. To understand more about the advantages of marketing analysis, you can check out this article- ‘Why is market research important?’. Also, remember that for every benefit in business, there are also disadvantages—some of the few drawbacks of conducting a market analysis area.
A market analysis does not guarantee a precise recognition of a The market marks up new changes, so it takes a fragment of the market covered in research which would not just represent the entire market.
Misinterpreting data in a market analysis can be misleading and damaging to your marketing campaign. A business analyst should be able to identify any risk and help you avoid any danger of shrinking your business.
It’s expensive. Carrying out a market analysis involves expenses like hiring a business analyst expert, data collection, or research. It is pretty expensive. Small-scale businesses may not have adequate resources to analyse, but it’s beneficial to large scale. For more information on the disadvantages, see this article- ‘Disadvantages of Marketing Analysis.
Now we have a brief knowledge about market analysis. Knowing who your competitors are in your line of business is also essential. There’s a quote that says, ‘keep your friends close and your enemies closer. This is where the competitive analysis breaks in.
What is Competetive Analysis
Competitive analysis is an essential ingredient of corporate strategy. You can use the data gathered as a point of differentiation to identify your company’s strengths, weaknesses, opportunities and threats. It’s essential to do a competitive analysis because it would make you understand where your business stands, the different growth stages, and possible ways to satisfy your customers.
One of the systematic methods for doing a competitive analysis is SWOT; this method would be used to figure out how a competitive analysis can be executed.
What is Swot
SWOT stands for strengths, weaknesses, opportunities and threats. This method is a tool that helps a company develop its business strategy, whether you’re building a startup or managing an existing business. It’s a tool to identify environmental conditions’ capabilities involved in every project and has been used extensively in various decision-making processes.
It allows you to determine the strengths and weaknesses in your corporate structure and translate them into opportunities while keeping an eye out for external threats to the business. The strengths and weaknesses are an integral part of your business- these are things you can control and change. The power of your business is your selling point, while the weaknesses are things that are missing.
Examples of strengths in a business include; Location, your core team, investments, clear vision, and motivation, while weaknesses in a business include; Rigid structure that reduces swiftness, poor customer service, flawed business plan, fragmented company culture, poor leadership, poor management, poor marketing strategy.
Opportunities and threats are the outer part of your business. Opportunities are chances that incredible events are likely to happen. It’s a factor that would give a company a competitive advantage.
The threat includes anything from the outside that can destroy the growth of a business. These are obstacles that most companies suffer either in getting products, leads or marketing their services to customers/clients. While analysing the threats in your business, always remember your competitors and how to step up your game so whatever you do, try not to copy their strategic approach.
This analysis method can assist you in challenging dangerous assumptions and unveil hidden possibilities about your business’s performance. If it’s well handled and carried out, it can reveal new insights about where your business is and also how to develop other strategies.
How to Do A Swot Analysis
Swot Analysis involves listing your business strengths, weaknesses, opportunities and threats. After drafting the list, you compare and contrast to see if there are connections /contradictions that you’ll likely explore and summit.
A swot matrix is a 2×2 grid with one square for each of the four parts of a SWOT. Each section is headed by some questions to get you started. Remember that your SWOT assumptions may be wrong, so it’s better you get a team of people from their level and roles in your business to build the list of observations. Each time you identify a Strength, Weakness, Opportunity and Threat, write it down in the analysis.
The Advantages of SWOT method
- This method makes you understand the business
- It builds the strength of an organisation.
- It facilitates an understanding of your business’s strengths, weaknesses and threats.
- It creates room for further opportunities in the industry.
The Disadvantages of SWOT method
- Too much information that’s not relevant can affect your analysis. This method has to be repeated regularly.
- It lacks a refined structure, so some vital factors may be missed, leading to poor decision-making.
- This analysis is only one stage of business planning.
Doing a competitive analysis would help you to understand the SWOT of your product and organisation, and you’ll be able to adjust your goals towards your marketing strategy. Competitive analysis can make you know the strategies of your competitors and also modify a change in your business strategy in terms of strengths and opportunities. By doing a successful competitive analysis, you can evaluate the current market situation, assessing your competitors and where you stand compared to their competition.