Competitive Analysis: Objectives and how it helps in business strategy

 

As the business enhances, competitive analysis becomes much crucial. Most organizations conduct competitive analysis at the product, company, or strategic business levels. 

Due to its advantages, it can be applied to all the business. Moreover, the aim of a competitive analysis is widespread, yet most famous for the start-up and an established company.

What is Competitive Analysis?

 

Competitive analysis is a strategy through which a business recognizes main competitors and researches their sales, products, and marketing strategies. With competitive analysis, a company can create robust strategies for which makes them ahead of their competitors. It helps in understanding the strengths and weaknesses of your competitors. Additionally, it assists the business in creating a refined strategy.

 

Importance of conducting Competitive Analysis:

·              Provides an understanding of how your potential and existing customers rate competition.

·              Provides a mechanism to build a solid business strategy in your target market.

·              Assist with the idea of what offers your company an advantage over the competitors.

·              Give an idea of what your customers are demanding.

·              Helps in making the strategies to expand business in a new market.

 

3 Objectives of Competitive Analysis 

Below are three main goals of the competitive analysis described:

1. Understanding Comparative Advantage 

The initial aim of competitive analysis becomes crystal clear when you optimize your direct competition. Once you research your competitors, their product portfolio, and products, you come to understand where your organization stands against them.

This comparative research will provide insight into two things:

·              When are you ahead of your competitors, and what business benefits do you hold?

·              Where is your competitor strong, and what benefits it holds? Where is your competitor unbeatable?

The above points make sure that you understand your business position in the market. Additionally, this research can be used afterward at the 3rd stage.

 

2.      Knowing the strategies of Competitor

Let's take an instance when you play chess against the same person, again and again; you start to recognize the moves they make. The same happens in badminton, table tennis, carrom, and other sports.

The same happens in the business- if you know everything about your competitor, like you know their past movements and their new position in the market. Then, it is easy for you to determine their next move in the market.  

You can understand the competitor's resources, their abilities, individuals driving their business. So, you also need to know what individuals working in the company are capable of. It will ensure that you can determine the movement of your competitors. And when you can quickly learn their progress, you can easily beat them.

The second aim of a competitive analysis is to determine what your competitors might strategize. It immensely assists you in the third phase.

3.      Strategy Selection 

It is the essential and last aim of competitive analysis. Whatever direction your business move, you are required to make several decisions before moving in that way. Thus, implementing the business strategies requires spending a tremendous amount of money and time, which is not easy to recover.  

But, an organization needs to move ahead to be on the top. Thus, this final aim of the competitive analysis helps select the right strategy for businesses to move forward. In the initial stage, you evaluated your competitors and did the comparative analysis. In the second aim, you know about their past movements and current position in the market.

In the last aim, utilizing the first two aims, you can know which strategy is perfect for implementing such that you can capture the market share of competition or expand your business in new regions.

Lastly, the objectives of competitive analysis include three main points:

·         Conducting comparative research of your domain

·         Research about your competitors closely

·         Select the right strategy which helps in beating your competitors

Whether you are the smallest organization or big enterprise, these three objectives of competitive analysis can help you defeat your competitors.

 

How to check competitive information?

Once you have accumulated all the information of your competitors, now its time to analyze the data.

 

Analyze your competitor’s product features and advantages

Initiate by making the list of the product features and their benefits in order of importance and make a table to display whether or not every competitor fulfills them. Apply a checkmark to see which of your competitor has which benefits and features. The features are mainly straightforward. Either a competitor product holds it, or it doesn't. But benefits, on the other hand, are not as simple and need to determine as per the feedback of the customers.

Now, utilize this table to analyze your competitor's service or product and compare them with your business. What benefits and features are unique about your product? The more exclusive benefits and features your product hold, the stronger will be your market position.

Evaluate your competitors Market Share

The mainly used measure of the performance of sales is market share. Your competitor might not offer the best service or product, yet if they produce many sales in the market. They might:

·         Define the standards for a specific service or product

·         Impact popular vision of the service or product

·         Devote resources to maintain their share in the market

 

Other Critical Factors to Consider 

The preference of the customer is the only part of the research. Consider some other crucial factors like:

·         Financial Resources- Are they witnessing financial setbacks? How are they funding novice product development and enhancement?

·         Price- Is better to look for the trends in pricing rather than monetary gain and loss. 

·         Operation Efficiency – Check if they can save time and cost with solid production and delivery strategies.

·         Strategic Partnership- What kind of relationship do they hold with other organizations?

·         Company Morale Personnel- What are the commitment, motivation, and productivity levels of their employees? 

 

Conclusion 

Do you want your business to stay ahead of your competitors? Then, competitive analysis is one of the most critical services your business needs. If you are looking for professional experts to gauge your competitors, then hire, Ingenious e-Brain who has enriched experience in offering competitive analysis services. Our analysis will help you make the right strategy for your business and increase business productivity.