Leading business in any sphere is quite a difficult thing. You can do everything right, as it seems to you, but you will make no progress and profit. At the same time, the competitors can make a fortune. It is just the time to perform a competitive analysis. It is an important thing for any […]
A competitive analysis – how to make it right?
Leading business in any sphere is quite a difficult thing. You can do everything right, as it seems to you, but you will make no progress and profit. At the same time, the competitors can make a fortune.
It is just the time to perform a competitive analysis. It is an important thing for any businessman. Furthermore, it helps understand your strong and weak points. Besides, you will have an opportunity to have a look at other companies – their management and basic principles of running. To perform a competitive analysis, you will have to learn some important things, they will be useful for any businessman who wants to develop his business.
The notion of a competitive analysis
If you are not a professional marketer, we will try to explain what it means to perform a competitive analysis. In fact, you should keep a watchful eye on the strategies of other companies. It is necessary to understand strong and weak points of the sphere.
It is useful for any businessman to understand whether his product is going to be successful or not. Furthermore, it includes the pricing policy, spreading of goods and many other elements.
Moreover, it can be of different types. Everything depends on the aim. You can just choose one aspect and make a total analysis of it. For instance, the simplest example of a competitive analysis can become a comparison of the website. There are some elements that are a must for any businessman while performing an analysis:
- Who are the customers;
- Pros and cons;
Learning these positions, you will get a brief description about the competitors. At least, it will be easier to understand how they are working and what the difference they have. If you need to know more details, the following elements can be included:
- Website features;
- The peculiarities of copywriting;
- Using social networks;
There are no limits about it. In fact, any point can be analyzed. Everything depends on the fact what the businessman wants to get.
How is it connected with e-commerce?
The main question that troubles businessmen is why they need to perform this kind of analysis. The answer is quite simple here. It is impossible to compete with anybody without knowledge. You need to get a full picture of what your competitors are doing.
For example, if you are connected with e-commerce, it will be helpful for many reasons:
- Make reasonable decisions;
- Follow the trend;
- The right comparison;
- Correct pricing;
- New clients and means of communication.
It can be used by all the types of companies. No matter how long you are running your business, it will be useful for everybody. Besides, it doesn’t mean that a competitive analysis is a limited document. If you want to run a successful and profitable company, you need to add something there. As the market is constantly developing, the analysis is enlarging too.
Practical steps to perform the analysis
If you want to make the right analysis, you need to follow some steps that can lighten the process:
- Choose some competitors.
If you want to find your competitors, it is enough to apply for searching websites. Look for the same ideas, you are providing. Compare the kinds of goods, clients, the period of running, etc. Such kind of selection will help you understand what place you are occupying with your own company. A good number of companies that can be compared is about ten.
- Using a small database.
One of the best ideas that can be given for analysis is using different tables. You can add and remove something from there during some time. You can include various parameters such as pricing range, using social networks, exclusive offers, discount and so on.
- Specify the type of competitors.
When you look at the competitors, you need to divide them into several categories. The main division is the minor and the major competitors. Besides, the division can look like this:
- Direct competitors. The main problem here is that you need to understand that such companies provide the market with the same product.
- Indirect competitors. They have the same product but with different pricing. It can be either top-class and expensive, or something simpler and cheaper.
- Tertiary competitors. They have the same target market; but can provide different goods.
This instrument is quite useful for every businessman. It helps to build the relations with the target audience. It can also help to keep them for a long time as clients. You need to analyze here different aspects. For example, you need to have a look at social media, a website, and other means of communication with the audience.
- Unique offers.
You must know that all the competitors have something unique they can offer to their clients. It is a small secret of every company. If it is an online store with clothes, there can be different variants of service that can attract clients. For example, they can offer expensive, luxurious brands of clothes with some discounts or lower prices. Besides, the service of delivery also plays an important role here. You need some time to have a look at the competitors. Analyze and try to find the reasons why the audience chooses a certain company. Having known their advantages, you can build your own strategy of how to improve the situation.
- Understanding the trade.
The key element in running an e-commerce business is the marketing. Sometimes, it can be rather expensive, but can give you a helping hand. You need to observe your competitors. You need to understand how they sell their goods. Some things can be done automatically, but you need a human experience too. The best idea here is to become a client of the company. You can learn some information in the social networks or use different promos from the store. And one of the best ideas is to buy something. In this case, you will get the impression how the process is working. Don’t forget to put everything down. Look at the approaches the companies are using to attract the clients.
It is a complex thing, that includes different spheres and elements. The basis of it is knowing weak and strong qualities of the company. The process is collecting data and later sort them. After that, you will get the idea of what can be done to improve your business. The analysis is focused on the strongest points of the competitors and compared with yours. It helps to identify the sphere that can be improved.
This thing can be done annually. It helps to avoid problems.
Important! Currently, the situation with analyzing the competitors has changed. The main reason here is the use of instruments that are running automatically. These instruments can provide SEO-analysis, information about keywords, social networks productivity, content-marketing, etc.
Using these instruments, you can choose one sphere and make all the necessary accents.
What things should be avoided in the right analysis?
You have already known the key elements of the analysis and how to make it right. It is time to look at the things that can cause some problems:
- You need to do the analysis continuously. So, it means that you should avoid critical decision. If you have found something, take it into consideration and keep on working. Business is constantly developing. The idea that seemed to be stupid yesterday can become a genius one tomorrow.
- It is useless to have much data without any actions. So, if you have collected some information about the competitors, you need to do something with it. It can pile in the computer for a long time without any use. Try to analyze it and make some conclusions of what is already known.
- Nowadays, the process of collecting information is simpler than even ten years ago. There are lots of instruments that can do it automatically. Look at them and find the opportunity to use them. It is better than working with your own hands.
- You need to know what you want to get. If you don’t have any aim, it will be harder for you to concentrate on a certain sphere of analysis. If you want to know the pricing strategy, look at it within a certain period of time. Again, going back to the previous point, it can be done automatically nowadays.
- The analysis must be done within a certain period of time. You need to look at the development of the company for a long time. Every day the situation is changing, so you need to focus on the past too.