Competitive analysis is essential to understanding what your competitors are doing right, and where they are missing the mark. Consequently, it might give you the edge you need to find new customers. In a competitive market, small business owners put everything on the line to increase their customer base and sales.
The most basic and first step of competitive analysis is to understand who you’re actually competing with. Gather information about similar businesses in your area. This could include online businesses that provide products with a related benefit.
An example would be a local yoga studio that competes with other yoga studios. Does the yoga studio teach multiple type of classes? Do they sell retail products? Are there other types of yoga instruction at a community college or gym?
Find competitor’s strength and weaknesses
A clear understanding of competitors’ strengths and weaknesses is a prerequisite for developing a strategy to gain the upper hand. Knowing their strengths can help you see changes you could make and whether it’s too expensive to compete. Finding their weaknesses can point out niches where your business can grow with less direct competition.
Gauge your relative competitive advantages and disadvantages
Once you have an understanding of your competitors, you can assess your own advantages and disadvantages. Identifying the gaps in your business and your competitors will help you understand where to invest your time. As a result, this could bring in new customers and increase your revenue.
Know where your competitors are going
Read your competitors blogs and social pages, get on their email lists and check out local business publications to learn your competitors’ focus. Likewise, gather marketing ideas and get insight on how you may want to shift your business. You may even discover an opportunity in a new market. Either way, having some early knowledge will help you make your own plans for your business.
Understand competitors’ past strategies
Performing a comprehensive analysis of competitors’ historical growth will let you see how they built their businesses relative to economic conditions, product releases and changes within the community. This can reveal market traps and show how these businesses are likely to respond to future changes in the market.
Competitive analysis can be worth the work and investment. One shortcut is to use BirdEye’s powerful solution to access comprehensive competitor analysis that will help you stay steps ahead of your competition.