How To Analyse Your Competition

Understanding your competition is essential to besting them, and the only way to truly know them is to analyse your competition.

Competitive analysis is very important in helping businesses gain new knowledge, uncover market gaps they can take advantage of, identify opportunities to improve their business and how they operate, and much more.

In this article, we share four steps small business owners can take to comprehensively analyse their competition.

Four Steps To Analysing Your Competition

1. Identify Your Competition

Identifying your competition is the first step towards analysing them. Regardless of whether they are direct or indirect, every business has a significant number of competitors.

Your task is to pinpoint brands and businesses that offer the same value to your target market, cater to a niche market, or satisfy the same customer needs as your business does. While it’s easy to identify businesses that offer the same products as yours, it’s crucial to remember that other competitors may be catering to customer needs in a different way.

Therefore, you should prepare a list of the top five (5) competitors you’ve identified, both direct and indirect.

2. Gather Information on Your Competitors

Once you have compiled a list of your major competitors, both direct and indirect, your next step is to conduct thorough research on each one.

Obtaining as much information as possible is essential to conducting a comprehensive analysis. Therefore, it is important to invest the necessary time and effort in this step.

Where can you find this information? Begin by searching Google, reading articles about them, and visiting their websites and e-commerce stores. However, it is unlikely that you will find all the information you need on their websites alone.

It is recommended that you talk to their sales team to gain insights, visit their social media pages and analyse their marketing strategies. You may also talk to their customers, suppliers and even try their products or services yourself. Once you have completed this step, you should have enough information to conduct your analysis.

3. Carry Out S. W. O. T Analysis

SWOT analysis is a tool used to evaluate the strengths, weaknesses, opportunities, and threats of a business.

It is recommended to conduct a SWOT analysis for your small business and top five competitors.

This analysis will reveal areas where your competitors are outperforming you, where your business has a competitive edge, opportunities for expansion, and potential threats to your business.

To get the best results from your analysis, it’s important to make objective and honest evaluations of your business and your competitors. If you find it challenging to remain unbiased, you can invite a third party to perform the analysis on your behalf.

Related: How To Write A Business Plan For Your Small Business

4. Draft Your Competitive Strategy

After analysing your competition, it is essential to use the information you gathered from steps 1 – 3 to improve your business.

You should consider how your business can offer a better product, capitalize on new opportunities and markets, and improve your sales or marketing strategies.

Additionally, it is crucial to identify ways to strengthen your competitive advantage and develop new ones. Writing out your answers to these and other questions will help you implement these steps effectively.

If you need help conducting a competitive analysis for your small business, contact us today.

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