Competitor Analysis

SECTION 1: UNDERSTANDING COMPETITOR ANALYSIS

  • Competitor analysis involves assessing the strengths and weaknesses of current and potential competitors.
  • This provides insight into the competitive landscape and marketplace, offering a clear understanding of the challenges and opportunities present.
  • The goal is to determine competitor’s strategies, capabilities, pricing, and market behaviour.

SECTION 2: METHODS OF COMPETITOR ANALYSIS

  • A SWOT analysis can be applied to a competitor, examining their Strengths, Weaknesses, Opportunities, and Threats.
  • Market Share analysis shows the total sales a competitor has in the market in comparison to other companies.
  • Competitive benchmarking compares products, processes, and performance metrics to industry bests or best practices from other industries.

SECTION 3: ADVANTAGES OF COMPETITOR ANALYSIS

  • It can identify gaps in the market for new products or services.
  • Enables the business to understand its competitive advantage or identify areas where it is falling behind.
  • It helps to anticipate future strategies of competitors, allowing the business to plan accordingly and stay one step ahead.

SECTION 4: USING COMPETITOR ANALYSIS IN DECISION MAKING

  • It can inform decisions about product development, pricing strategy and marketing campaigns.
  • It helps to use resources effectively where they will have the most impact against competitors.
  • An understanding of your competitor’s actions makes for a more comprehensive business strategy.

SECTION 5: LIMITATIONS OF COMPETITOR ANALYSIS

  • The accuracy of information about competitors can often be questionable as companies don’t often share detailed internal information publicly.
  • It can be a time-consuming process, especially for businesses with numerous direct competitors.
  • Over-focus on competitors can lead to imitation whereas true success comes from innovation and focusing on the needs of the customer.
  • Competition and markets can change quickly, making a competitor analysis a snapshot in time. Therefore, it is beneficial to conduct this analysis on a regular basis.