Competitive Analysis is a process that involves finding major rivals and getting an understanding of their sales, services, products and marketing strategies. It aids a business entity to understand the potential benefits and hurdles within a market around a service/product.
Advantages of Competitive Analysis
Identify your Rivals
Even though it feels like an easy task at a glance, this process is not that easy to accomplish. If you want to know the companies that sell a service /product similar to yours, it is easy. But to find your real competitors out of them is a Hercules task.
A market is mainly comprised of two categories of competitors namely, Direct competitors and Indirect Competitors
Direct competitors are the categories that pose direct competition to your business by selling identical products/services.
For example, if you are a company that sells cosmetics products, your direct rival will be those entities that are engaged in selling the same products.
When we speak of Indirect Competitors, they represent the group that markets products/services that are not the same as yours.
For example, if you are the owner of a shop that exclusively sells cupcakes, a nearby bakery that sells a variety of confectioneries is your indirect rival.
To know the real competitors, the business entity needs to do a through web search. You can do this by searching with keywords that describe your business. While selecting keywords always make sure that you must also make keyword combinations that can include your indirect rival.
Know the Online Shopping Trends
Ecommerce is a place that allows people to buy products. Latest shopping trends are infused by many companies to retain their loyal customer and also to attract new customers.
Thus by understanding the latest trends in shopping, business entities can offer a high-end shopping experience for their clients.
Understand the position of Competitors
Position of Competitor is one of the prime insights that a company needs to be aware of. When a company identifies the position of its rivals, it helps them to connect to its target customers easier.
That means when a company does the competitive analysis it can learn how to differentiate itself from rivals and create an image that can attract its target customers.
What to check to know the position of a competitor from their website?
- How do they represent themselves before the public?
- What are the unique features they present?
- Set Goals for your Company
The competitive analysis gives you the crucial information that you need to get on top of your competitors.
Thus, upon receiving data regarding demographics to market trends, gaps in your organization and customer behavior you can set a goal for your company.
Identify your Strengths and Weakness
When you understand your position in the domain, you can decide on ways to improve your products/services.
If you have wrong assumptions related to your position in the field, it may result in wrong marketing strategies for your company. Also, this will lead to unwanted expenses in many ways. And the final product will not be something that can compete with other products/services in the industry.
Know how your rivals market their services/products
Marketing strategy is the most powerful tool that helps an E-commerce business entity to succeed. That means if a business organization adopts the right marketing strategy, it can definitely reach the top in less time.
But most business organization fails to understand the marketing strategies of their competitors. That is, if an E-commerce website designs its strategy by comparing it with various competitors then it can develop more effective strategies.
Subscribing to Newsletters, Reading Blogs/Articles and Buying Products are some of the ways through which you can understand how your competitors sell their products.
Now let us have a glance at some steps you need to follow before initiating a competitive analysis
Step 1: Set your goals and vision
Step 2: Decide the information you need to collect
Step 3: Collect the Data
Step 4: Analyse the Data
Step 5: Apply those insights to develop your market strategies
To stay on top of your competitors it is a need that you must conduct competitor analysis frequently.