Effective business is impossible without analyzing competitors. Competitors quite often make more attractive offers to the consumer.
However, in order to respond in a timely manner, it is necessary to know not only the strengths and weaknesses of your own project but also the other representatives of the specific market segment.
Competitor analysis enables you to determine the market size overall and to study in detail the strengths and weaknesses of competitors.
Based on the information received, the owner of the business project can define priorities in his company policy and highlight the benefits attractive to the audience.
As a rule, the following information is found out while analyzing competitors:
· Brand recognition. Analysis of brand recall.
· Product range. Analysis of product and service offerings of interest to the customer.
· Pricing policy, considering promotions and discounts.
· Advertising campaigns and accuracy of the declared information.
· The method of obtaining the necessary information depends on the purpose pursued by the business owner.
The five forces framework is used to solve a long-term strategic task. The main advantage is that the model allows you to identify threats relevant to the company’s growth, as well as to analyze the market and its participants:
· Bargaining power of customers and suppliers.
· Threat of new entrants.
· Threat of substitutes
· Competitive rivalry.
The method consists of five main steps:
· Identifying potential opportunities of the competitor.
· Identifying the core motivation.
· Analyzing competitor’s business processes and forecasting profit opportunities.
· The competitor’s vision of its position in a particular market segment.
· Forecasting competitor’s business processes.
The analysis for solving tactical tasks is carried out once a year, and it consists of the following stages:
· Industry-specific level of competition.
· Creation of a competitor map.
· Portfolio analysis.
· Comparison of prices and pricing policies.
· Evaluation of methods and channels of product promotion.
· Description of the competitor’s target audience.
· Technical level.
The conducted analysis will allow you to assess the advantages of a competitor company.
The sources of information during the competitor analysis include surveys of consumers, managers, and experts, monitoring of outlets, an overview of the industry, and active participation in thematic events.