Competitor analysis - what are the methods and how to conduct a competitive study?
- Knowledge base
Every entrepreneur, both entering the market with a new product and those already in the market, needs information related to assessing the activities of competitors. The idea is to determine as much information as possible, such as the number of companies doing similar things, the development of these companies, as well as the customer base. It's good to know your competitors in order to know where there is room to possibly increase your own sales reach. After all, running a company is not just about "cutting coupons" but also about continuous development and looking for opportunities to increase potential. And that's why it's a good idea to regularly conduct competitive analysis.
What is a competitive analysis?
In short, it is a series of activities calculated to gain as much information as possible on the market activities of rivals, i.e. companies engaged in similar activities to ours. Competitor research thus gives a great deal of information, the conclusions of which can significantly improve the process of acquiring new customers and retaining those who have been with us for a long time. And this has a direct impact on the financial result achieved by the company. Competitor analysis is often a tedious and meticulous job of collecting and organizing all the data that can be obtained about the industry.
Why do a competitive analysis?
Competitor research is carried out to get as much information as possible about an issue even before committing resources to a business project. This is the basis of good preparation for business. A detailed description of the competition allows you to develop the best strategy for business operations. We will learn about our rivals, their behavior, customer profile, range of services and market activities. If we draw the correct conclusions based on such analysis - then we can find ourselves one step ahead of our competitors. A very important argument for conducting various types of competitive research is to find the strengths and weaknesses of our market rivals and also to draw the correct conclusions from any failures and mistakes made by competitors. These are large-scale activities that are also intended to set trends in the industry and determine the optimal moment to enter the market with a new product. In this way we can avoid mistakes that may have just happened to competing companies. Competitor analysis is almost essential if we want to minimize the risk of costly mistakes at the very beginning of doing business.
Many entrepreneurs forget this, but competition research is also a duty during the many years of running most business activities. The point is that many companies that have scored even a good start after some time get into a rut, a decline in turnover, the specter of having to restructure, that is, outright cost-cutting. A continuously updated database of competing companies, detailing their current situation, allows you to choose the right strategy to win customers. Remember - competition does not sleep. If you stand still, you won't last in the market for very long. Of course, much depends on the type of industry and business, but everyone will probably agree on one thing. An entrepreneur should constantly look for more opportunities for growth. According to many entrepreneurial experts, standing still is the beginning of the end.
Competitive analysis methods
During the development of the market, various methods of competitive researchhave developed. Some are less, others more effective, but it is worth remembering that only by adding up the results of all the measures can you get the full picture. Choosing and conducting an analysis based on only one method is fraught with the risk of error, which in business can simply mean financial loss. So what are ways to study the competition? What is worth doing at the beginning? Here are four basic methods of analysis.
- Desk research
This is a type of foundational data, that is, data that is obtained by collecting and processing information from, for example, the trade press or already conducted reports and market analysis. In addition, it is worth taking into account various types of newsletters or reports and statistics of public institutions. Market competition analysis is also carried out simply by thoroughly reviewing the websites and stores belonging to competitors. So, everything that someone has already written and you just need to reach. Then the collected data must be subjected to a very in-depth analysis, which is then the basis for the creation of a relevant report.
- Marketing research
What is marketing research? It's an organic effort to acquire data that will aid in in-depth analysis. Having already acquired foundational data, you can take the next step in market research competition. This involves obtaining information directly from market participants, i.e. customers, manufacturers, distributors. This is done in various ways, but nowadays a very frequently used channel is online opinion polls. Surveys in which it is enough to mark one answer. The results are collected and processed virtually on the fly. In addition, it is still possible to create a representative group of a certain number of people and present them with the issue in the form of several questions and possible answers. Marketing surveys also often use telephone interviews.
- Business intelligence
Already on the basis of practiced standards of cooperation we can draw conclusions about the financial health of our business competitor. There are also ways to check solvency. This is very important, because it clearly shows whether a company's business strategy and practices are having the desired effect.
- Mystery shopping
This is the stage that closes the basic analysis and completes the full description of the competition. It involves involving people who will take the role of customers or contractors and play out a specific scenario. Sometimes it's simply shopping, sometimes it's creating a problem situation and seeing how the store or its employees will handle it. This is an effective method of competitive research, which shows the real condition and efficiency of a business rival.
The data collected over the course of these four stages are the building blocks of a full report on competitive analysis. By using them, we are able to identify trends in a particular industry, learn about and properly prepare for the entry threshold, and find out who is active in a particular market and to what extent. We can also learn about the seasonality of sales in a particular industry and thus prepare well in advance. This data also helps to find the optimal time to enter the market with a new service.
Competitive analysis tools
Whether you are analyzing the competition of an online store or a local gym, there are practical tools to help you through the entire process.
In the first place, you should reach out to Senuto. This is one of the most well-known Polish tools used in the SEO industry. One of Senuto's many features is precisely competitive analysis based on keyword usage. On the plus side, it is extremely intuitive to create reports, which can prove to be indispensable in the entire competitive analysis process.
A very popular tool that measures website traffic is SEMrush. This is a comprehensive tool that instantly indicates trends and traffic on a competitor's site. With it, we can obtain such information as the seasonality of sales, or even the amount of a customer's potential purchase portfolio.