Your competitors can be an excellent source of inspiration, information and industry insight. And a good governance board will have a competitor analysis strategy in place to stay up-to-date with industry trends and developments.
For business owners, the task of assessing competitors can be fraught with anxiety. What if a new company comes on the scene and threatens to undermine your market share? What if a strong competitor appears to be developing a stronger presence than you across social media? What if, what if, what if?
Although at times uncomfortable, being aware of your business competitors’ movements and market position is key to business success. They are a powerful resource and can help you stay fresh, relevant and on top of your game.
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Ideally, competitor analysis will be conducted by your governance board in a structured, well-considered manner.
The same questions should be applied to every competitor, resulting in a fair, objective judgement of their performance against predetermined criteria. This is a situation where having an industry insider on your governance board really helps, as their market intelligence and insight will help them make good sense of the data collected.
So, how do you conduct a competitor analysis? Below are three steps for success.
Step 1: Identify your main competitors
Identify and create profiles about each of your main competitors. These profiles should be as detailed as possible.
Find out everything you can about their market position, services and goals; you will likely be able to find this information from their website and other marketing material. It’s also a good idea to subscribe to their e-newsletter and follow them on social media.
If they sell a product or service, you should try to make a purchase and review their customer service process, delivery and promise on quality. Try to place yourself in the customer’s shoes.
Step 2: Compare and critique
Once you have gathered data about your competitors, place it under the spotlight. Assess all of the information you have available; you may even want to perform a SWOT analysis. In particular, analyse their pricing, marketing, communications and digital presence.
Next, compare their performance with your business. What do you admire about them?
Look at what appears to be performing well for them and see how you measure up in that area. Identify any offerings they have which your business does not currently provide. Look for opportunities to learn, develop and grow.
Step 3: Re-strategise
Collecting information about your competitors is one thing; what you do with this information is another. After conducting competitor analysis, it’s a good idea to hold a strategy meeting with your governance board to determine whether to take action based on any of your findings.
Don’t agonise over the analysis too much though, as you can run the risk of spending a lot of effort and time worrying about someone else, while losing sight of your own business.
Often, assessing your competitors reinforces your own unique brand and market position, and provides the motivation to continue carving out a niche in your chosen industry. When managed in a structured way by your governance board, it can truly give your business an edge above the rest.
For SMEs, implementing a good governance practices ultimately reduces their exposure to unnecessary risks and leads to opportunities for growth, financing and improved performance. Our FAQ guide provide the practical answers SMEs have been looking for.