I think you already know the answers to how to start a business online or how to write a business plan. Now that you have your business idea in your mind. It’s time to start working on the plan.
This article is for new and small businesses. This will help you to improve your business.
What Is Competitor Analysis?
Before starting a new business, you must thoroughly research the market. Of course, that consists of the competitors also. That will tell you about your competitors and lead you to develop new strategies for your business.
Suppose you are planning to launch a shoe company. Nike, Adidas, Puma, and other famous brands are already existing. Then why will consumers buy your products instead of these brands?
My answer is that I will research brands. Then analyze the data. After that, I will come up with ideas that can work in the market. For every product and brand, there are different competitors.
Why Competitor Analysis Is Important For Online Businesses.
If you ask me, what are the differences between online and offline business?
I can tell you thousand different things. But this is not our topic. In online business, the competition is so high. Every other person is doing an online business. A single person can maintain a small e-commerce website.
Because of this high competition, you need to analyze your competitors. And understand the strategies they have implemented. This will help you to understand their way of business. Then, you can come up with new strategies.
Understanding The Market
Understanding the market is essential for starting a business. Suppose you know your competitors. Then you will understand that people are buying its products and when they are not buying.
If they are buying, what is the reason behind it? According to that, you can understand the behavior of your potential consumers. Also, this will lead you to plan great strategies.
Understanding the market can tell you how to make new strategies. But that will only help you in selling.
The development of your product is as important as marketing it. Because once that works, consumers are going to use your product or services. If they like it, then it is fine. But with time, you need to develop your products. Otherwise, they are going to change the brand.
Strengths And Weaknesses
After doing market research, you will know your strengths and weaknesses. This will help you to make your brand better next time and also in marketing.
You will even know where you are lacking. That is going to help you to fill the holes. You can better understand your products and services and what to do to make them better.
We all are aware of the fact that evaluating ourselves helps us to understand ourselves better. What are the new offers and services the competitors are giving the consumers? You have to compete with it.
What are the steps your competitors are taking? What new trends are your competitors bringing? Why are they doing this? Is this working or not?
After finding out these things, you can compare your business with them and evaluate yours.
Suppose your brand is in the eighth position in your market. And next year, you are planning to take it in the top five. To fulfill your vision, you need a competitor Analysis.
Have you ever thought of a business where there is no competition at all?
Yes, you heard me. Knowing the competitors will push your limits. More creative and innovative strategies will come to your mind. These things will take your business to the sky.
Different Ways Of Competitor Analysis.
There are many ways that you can follow to analyse your competitors. I will tell you some effective ways to do that.
- You need to identify your products and services first. This will tell you about the revenue generation, demographic data and potential growth.
- Try to find direct competitors first. For example, if you are trying to open an e-commerce business. Then Amazon is your most significant competitor.
- Find indirect competitors if you focus on the shoe business through your e-commerce site.
- You can do a public survey. First, identify the brands that are providing the same products and services. Then take a public survey. For example, what brands are they using the most?
This will tell you about the statistics, demographic detail, also different revenues.
- Identify the channels that your competitors are using. This will enhance your creativity to try different ways.
- There are a few organizations that provide data. You will need the data to understand the business of your competitors.
Your Competitor Analysis Should Consist Of These Factors.
You have done significant research on the competitors. But if these factors are missing from the research, it will not work.
1. Feature Matrix
You should know the features that your competitors are giving. Keep this information documented. You will find how the companies are competing against each other.
2. Market Share
This is valuable information that you should always check to know your values. Never exclude large companies. They are the ones that will teach you to grow.
Find out different pricing. You should understand the quality and quantity spectrum.
What different marketing plans are your competitors implementing? This will tell you to make your marketing plans.
Try to understand the uniqueness and qualities that your competitors have.
6. Strengths And Weaknesses
As I have already told you, knowing your strengths and weaknesses is important.
You should know your target areas. Otherwise, you can’t run a business.
If you think you are already successful and don’t understand the competition. Then you are wrong. Today what is working can fail tomorrow.
With all this knowledge, you can achieve whatever you want.
Sofia Kelly is a passionate blogger. She loves to share his thoughts, ideas and experiences with the world through blogging. Sofia Kelly is associated with The Legal Guides, Lawyers Note, Simply Lawzone, Exclusive Rights, Lower My Legal Fees, and Lawyers Inventory.