Competitive analysis is essential to understanding what your competitors are doing right, and where they are missing the mark. Consequently, competitive analysis might give you an edge you need to find new customers. In a competitive market, small business owners do everything to increase their customer base and sales.
The basic 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 have different 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 important for developing a strategy. However, knowing their strengths can help you see changes you could incorporate. 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. The negatives will point out to the areas where you fall behind. The positives help you find out how your competitor achieved success. Acting upon them could land new customers and increase your revenue.
Know where your competitors are going
Read your competitors blogs and social pages, and get on their email lists. Also check out local business publications to learn about your competitors’ focus. Likewise, gather marketing ideas and get insights on how you may want to shift your business. Furthermore, 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. Analyze your competitors’ economic conditions, product releases and other factors. This can reveal market traps. It will also depict how the 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 perform a thorough competitor analysis. This will help you stay ahead of your competition.