Gaining Advantage through Competitor Analysis
Marketing Secret Weapons for the Small Business Owner
Are you starting a new business venture? Do you have an established enterprise and are looking to develop your market share? Whatever business strategy you have, do you ever spend time studying the competition? Who are they you may be wondering. They are other companies offering similar products or services; companies offering the same products or services, organisations who could offer the same or similar products or services in the future and organisations who could remove the need for such products or services. Their objectives are the same as yours – to grow, make money and succeed.
Business intelligence or, if you prefer, competitor analysis can prove invaluable and give you an unfair advantage. The saying ‘forewarned is forearmed' is worth bearing in mind. Sensible competitor research is invaluable and far better than the ostrich approach to running your business. Competitive intelligence essentially is a process designed to give you the edge over other firms in a similar and to minimize risk to your own business. It’s an information gathering process about the current state of the market in which you and your competitors operate and how this relates to your own business.
First, work out your strategy. Why do you need the information, what you want to find out, and how are you going to do it. Who will analyse the data, how will you use the information once you’ve collected it and what results do you want to achieve having got it. Then ask yourself these questions: who are your nearest five direct competitors? Who would you regard as indirect competitors? Which of these firms is growing, static or declining? What can you learn from their operation and advertising? How would you describe their strengths and weaknesses? What differentiates your business (products or services) from theirs? Don’t forget that markets are constantly changing, (legally – ie regulations and statutes, economically and politically and also in terms of technology) so in order to survive a business owner needs to be able to adapt quickly to suit current trends and reap possible benefits.
How you gather your competitive information can vary. Research, look, listen and learn. The internet is a powerful means of accessing data. But what about the personal approach? Visit your competitors’ locations to see the standard of customer care they provide, and observe how they do business, set out their products, offer their services. You could ask your own customers what they think about other firms. They must be prospected from time to time even if they are loyal to you. Visit trade shows and exhibitions, go to presentations or speeches given by members of their staff. Be aware of what appears in print, in professional journals, the business press, local newspapers and trade association publications.
Next process the information; study the data and analyse it. Do any trends and patterns appear that can be related to your business’s development and profitability? Evaluation is essential : was the information useful? How was it interpreted? What was the result of its use? Was it worth it?
If you’re still unconvinced about the advantages of competitive intelligence, be assured that there are many benefits. The value of knowledge is difficult to calculate because you can’t be sure how or when you are going to use it. But you can be sure that ignorance is far more costly and can result in a missed opportunity, loss of an important client, or - to its greatest extreme - failure of the business itself. Make sure that competitive intelligence is your secret weapon for business success.
By Frances Kay