There would rarely be a business entity which has not yet seen any competitor in its market & has been operating in monopoly fashion. None of the businesses are free from competition in their market & it is getting more complex as technology is not binded in one’s hand. The strive for growth has been giving a chance even to the smaller layers getting into alliance with similar once & fight with bigger to retain their part of share. So, the question here arises as to how one can keep an eye on their competitor movement and strategies. The answer is “Competitor Analysis”, a tool efficient enough to gauge out steps & strategies planned out by a competitor & cheap enough to be carried by even smallest player who is playing into niche market.
Competitor Analysis is an imperative part of the strategic planning and management process. Businesses have their own reason going after analyzing their competitors. Some businesses become obsessed with tracking the actions of competitors. Many businesses are happy simply to track the competition, replicate their moves and react to changes. Competitor analysis has several important roles in strategic planning:
– Helps generate understanding past, present and future strategies of competitors
– It helps management recognize their competitive advantages / disadvantages relative to competitors
– Provide an informed basis to develop strategies to achieve competitive advantage
– It also helps in forecasting the returns that may be made from future investments
– The analysis further facilitates in making out strategies for marketing a product, phase out pricing plans and strengthen distribution system.
Before handing over your competitor research work to outsourcing partner, you must identify questions which need to be included in your RFQ & to be answered specifically apart from other related things.
– Identify close competitors (based on business segment, product, industry)
– Profiling of each competitor based on revenue, products, marketing strategies, CSR activities etc.
– Objectives of competitors along with growth plans in next couple of years
– Business strategies pursued by competitors and how successful are these strategies
– SWOT analysis of competitors
You must ask your solution partner to provide make a competitive profiling chart or dashboard to have quick snapshot of the findings. There are a number of matrix tools to analyze competitors based on preliminary findings. There are also other tools which may analyze consumer behavior pattern for a product in a range of brands, online presence of your company & traffic to your website.
A researcher while looking out for answer to the specific question over number of competitors may find lots of information through search engines, news articles, databases but to sort them out in easily identifiable manner is a prominent point to consider. In order to gather competitor data, there are few interesting means available which are outlined here.
– A competitor data can be recorded from various physical mediums / sources like analyst reports, company annual reports, press releases, company presentations, newsletters, profiles etc. All of these can be gathered free of cost by an analyst of company to analyze their competitor but remember same can be done by your competitor too. Hence this type of recorded data is only useful to keep track or an eye on your neighbour.
– Another means to gather unique information about your competitor is your observational ability. Many of the business owners or their analysis solution partners use this method to analyze marketing or advertising strategies, pricing policies, branding etc. One can get such information from analyzing advertising patterns, pricing lists, consumer blogs, promotional campaigns and surveys / polls
– There are other options like being opportunistic in sourcing out competitor information. This sort of information can be pulled out from discussions with suppliers, customers and perhaps through previously employed key peoples of competitor.
Now you as a business owner must be thinking that it’s pretty easy for you to gather & analyze information, but wait, there are something very important here. The very essence of competitor analysis relies on the quality of data gathered which you have to analyze. Your business might know following findings about your competitor.
– Overall sales, sales & profit by market, market share, cost structure, organiztion structure, distribution system, suppliers, consumer profiles, online presence etc.
But on the other hand you really would like to pull out informations like these.
– Sales and profits by product, customer satisfaction levels, R&D spendings, expansion plans, strategic alliances, new products & strategies, press / brand / advertise / blogs effectiveness, supplier contracts, new markets etc.