Are you aware of what your competitors are up to? Organisations often spend time and money fixing their own internal issues but fail to keep an eye on those external competitive forces that threaten their long-term success. In an ever-changing landscape of innovations: in marketing, technology, communications and distribution it is imperative to give the right level of attention to future-proofing your business against any potential threats these changes may bring.
The importance of competitor analysis and industry intelligence
Performing a thorough competitive analysis can help identify any present and future threats to the existence of your business. On the flipside, it can also allow you to learn from the very best in the industry even if they are not direct competitors. In this way your competition has the potential to be one of your biggest assets.
Attaining an in depth knowledge of the strengths and weaknesses of both your direct and indirect competition will give you a more accurate picture of what is going on in your industry. It is also crucial to study industry patterns and trends occurring as this will reveal the strengths and weaknesses in your own business and help formulate a competitive strategy for the future. By maintaining an accurate picture of your industry you can help your business adapt to shifts and maybe even adopt a new direction or diversify in order to protect your market share against the risk of non-traditional competitors.
How to do it?
The goal is not to imitate your competitors but rather inform your strategy and create your own competitive advantage by understanding how your competitors operate and what contributes to or impinges their success.
Mystery shopping has been used for decades by businesses to ascertain how their service is performing. It’s a useful tool that gives great insight which is precisely why it should be utilised more to investigate competitors’ service. Call your competitors and buy their product or service – it will be money well spent. It’s a great educational exercise that allows you to directly ascertain your competitor’s fundamental strategies.
Take the time to analyse their customer experience
- How does their representative answer your call? How easy is it to order their product or service?
- What is the range of products and services they have on offer?
- Look deeper into how they package their goods, their pricing list, after sales service, and the marketing style they implement.
A particularly effective way to get a grip on a competitor’s marketing style is to subscribe to their email marketing. This gives you access to their promotion of a product or service, how they sell special offers to their customers, price their goods or services, as well as the style of their online content and brand identity.
Competitor reporting can become an intrinsic part of the internal reporting to senior management, executives and the board, in your organisation. One of the ways this can be achieved is through a prepared and in depth SWOT analysis or by properly applying Porter’s Five Forces Model. Preparing either will involve research into the reasons why some businesses succeed and others do not. Look for what factors are motivating customers towards particular businesses; and the strategies they are utilising to generate this favourability.
To see just where your business stands in relation to the competitors in your industry you can generate a competitive strength grid.
This can be formatted in the following way.
- List all the key assets and skills down the left hand side of a page
- Along the top, write down the following headers: ‘Strength’ and ‘Weakness’
- For each asset or skill listed, place all the competitors that have strengths in that category in the strength column, and those competitors that have weaknesses in the opposite column.
This will provide you with a clear and simple visual of the space your business holds in the industry playing field.
The ultimate goal of any competitor analysis is always to inform a new strategy or even to retain an existing one in order to attract or defend a market share. To achieve long-term success you must build your strategy upon assets and skills your competitors do not have, and take advantage of the opportunities they have not seen.
