“Do competitive analysis to perform better. “
The underlying idea of the competitive analysis is to find out the strengths and weaknesses of the competitors in a market, strategies that will provide the organization with clear advantage over the competitors, the trend that can be developed to foil competition from entering the market, and any weaknesses of the competitors that can be exploited for getting edge over the competitors.
“Find strengths and weaknesses of the competitors “
The first step in the competitive analysis is to categorize the current and future competitors in a market. There are basically two ways to identify the current and future competitors:
The first method is to look at the market from the customer’s viewpoint and group all your competitors by the degree to which they compete for the market share.
The second method is to group competitors according to their various market oriented strategies so you understand what motivates them.
There are a few steps to be followed to create the competitive analysis report for the future marketing strategy:
“measure competitors’ market share + marketing strategies”
Categorizing the competitors: Some competitors very strong from all aspects right from product manufacturing to pricing they may be seemed flawless, while many other competitors may have good products but poor pricing strategy. It is necessary for the management to categorize the top 10 companies in the market who seem stronger and larger than their company. The sales and marketing team is in the best position to rattle off their true competitors and categorize according to their strengths.
Analyzing their promotional strategy: Competitors these days utilize hundreds of ways to promote their products or services. With the increasing popularity of digital media. Companies are inventing different ways to promote their products that are differentiating their presence in the market from their competitors. The management needs to get deep into these promotional strategies of top 10 companies.
Competitors’ products analysis: The management needs to evaluate the competitors’ products and services from different aspects like product features, product values, and targets taken by the competitors. Other matters like how do the competitors sell their products, their product distribution strategies, and how do they determine their short term targets are the most important look out for the management. Customers’ report survey, customers’ remarks, reports of serious market analysts can also help in this matter tremendously. How do the customers see the entire market competition? Reports gathered by the sales person is also proved to be very authentic way to understand consumer behavior
Competitors advantageous aspects:
Once the competitors are categorized, the management can start to evaluate their strategies and spot the most vulnerable areas of the competitors. This can be done through an assessment of the competitors’ weaknesses and strengths. The SWOT analysis is the most authentic way to understand competitive edge of the competitors; it’s a great way to prepare competitive analysis.
SWOT stands for Strength, Weakness, Opportunity, and Threats. Here is a quick look at the four aspects of SWOT analysis:
Strength: The management sorts out the strongest areas of their organization that is much better than the rest in the market. They also investigate the strongest points of their competitors and what has been making their products or services better than their products or services? The management also tries to find out what promotional strategies their competitors have opted and how they are communicating with their customers?
Weakness: Here the weaknesses of both the organization and their competitors are evaluated. In what areas the competitors are losing to them, and in what areas they are losing to their competitors are evaluated to pinpoint the exact areas along which they can attack their competitors.
Opportunity: All the future possibilities are determined where the competitors have not yet reached, but huge opportunity is there to grow.
Threats: Threats may come from the competitors who are trying to drive the concerned organization out of the market or any other external threats life certain Government policies, legal changes or the countries trade and business policies etc. may give extra edge to the competitors.
A competitor’s strengths and weaknesses are usually based on the presence and absence of key assets and skills needed to compete in the market. Thus SWOT analysis can provide a detailed analysis of all positive and negative aspects regarding the competitor’s market presence and future market strategy.
Market lookout enables the management to understand the current condition of the competitors right now with respect to product positioning, growth, product presentation, demography of the consumers showing interests in their products, response in internet, market strategy they have adopted online, and any sudden change in sales and market planning of the competitors. It measures the trend during the most recent times.
Following these above mentioned steps enable the management of an organization to create a full proof competitive analysis report specially for the creating a specific market strategy for the future.
Through the competitive analysis the organization also try to create a competitive marketing strategy that can generate an extraordinary asset for the sales and marketing unit or a special skill that the competitors can’t imagine which will provide the organization with a distinctive and stable competitive advantage. As competitive advantages are normally gained from key assets and skills, the management should put together a competitive strength framework. This is a permanent scale for a certain period that lists all the major competitors in the market or strategic groups based upon all the relevant assets and skills and how and where the organization fits on this scale.
Once the management has established the key assets and distinctive skills required to succeed in the market is defined and have also fixed their distinctive competitive advantage, they then need to communicate them to all the relevant stake holders strategically that will draw attention from the market as well as defend the strategy for its own sustenance. Competitive strategies typically fall into the below mentioned areas:
Product: All the products that are already known to the market and the future plan of introducing the new products.
Distribution: The distribution strategy and distribution network followed by the organization and how that is going to be after grabbing the modified distribution strategy.
Pricing: This is a very important aspect which largely determines the impact of the product in the market.
Promotion: Sales promotion has changed in many aspects over the past few years. Competitors are constantly inventing newer aspects of sales promotion.
Advertising: It has a huge impact on the customers. Competitive advantage is largely determined by the advertising strategy of the organization.
Strategy depends a lot on the point of entry in the product life cycle and an acceptable competitive advantage. Competitive analysis plays a significant part is structuring a proper strategy for the company to create higher market niche than the competitors.
Apart from analyzing current competitors in a market, it is also necessary to met information regarding all the future competitive threats in the same market. The universal sources of getting information about the new competitors are as follows:
- Companies already competing in a related product or related market.
- Companies which are using related technologies for production.
- Companies which have previously targeted the organization’s prime market but with different products.
- Companies existing in other geographical areas but with different products
Start-ups incorporated by former employees of the organization.
New competitors may come in the market at anytime, but in certain environment the probability of entering into a market is high which are as follows:
When there is a chance to gain high profit margin in the market.
- The supply is quite below the demand.
- No external or internal barrier exist in the market
- There is a huge future growth potential in the market
- Competition is not intense
Getting a competitive advantage over existing organization is quite possible.
The presentation of detailed competitive analysis needs to be very professional one. It should have lesser jargons, easy interpretation of data and very comfortable tone to create interest on everybody who is going to read it. There are too few documents that get attention from the product planners and marketing managers the way that a competitive analysis does. For writing down a professional competitive analysis, the management needs to focus on the following matters:
- The object of the analysis
- The various research methodologies adapted
- The writing and analytical skill
Markets for an organization may be segregated into several sections. Not all competitors can be found in all the sections, again not all the competitors can be categorized in the similar way in all the markets. Hence, Competitive analysis is to be separated depending on the concerned market.