How To Analyse Your Competition In Business

Competition in the commercial world is a necessary evil. It is needed to restrict monopolies and keep businesses motivated to improve their offerings. Healthy competition eliminates unethical trade practices and helps consumers find products in different price categories. It ensures that businesses cater to every target segment and the economy continues to grow.

Although competition is critical to maintaining the balance in the market, it creates roadblocks in achieving the desired profits for passionate entrepreneurs in Adelaide. Numerous direct and indirect competitors affect their market share and marketing strategy. Thus, they must keep track of every big and small player to stay ahead of them. Here is a summary of competitive analysis and how it can be utilised by the business to attract more customers. It helps create a solid market position and increase sales with a data-driven approach.

What Is Competitive Analysis?

Competitive or competitor analysis involves undertaking market research to identify competitors in the same market segment. It aims to determine their market share, marketing strategy, strengths and weaknesses to seize new growth opportunities. It is a prerequisite while developing business plans because it helps to understand the feasibility of entering the market and the techniques needed to grab the attention of the target audience.

Even entrepreneurs who purchase a business for sale Adelaide must conduct a competitive analysis to compare their market performance against other brands with similar products. It helps to identify the latest industry trends and know the engagement levels other sellers achieve that help in sales. It makes the entrepreneur gauge their competitor and plan accordingly.

How to Analyse Your Competition in Business?

Competitive analysis comprises a step-by-step process to dig deeper into the competition and learn valuable lessons from the data collected.

1. Determine Your Competitors

The first step of analysing competition is creating a database of direct, indirect and substitute competitors. Direct competitors sell the same products and services to your target audience in the location of your business. For example, if you own a grocery store in a commercial precinct with another grocery store across the road, you are directly competing with them.

Indirect competitors sell different products and services to different target audiences in the same industry. For example, a restaurant that offers lunch and dinner is an indirect competitor of a cafe offering coffee and snacks. Both businesses operate in the food industry and can affect each other’s market share.

There is another category of competitors known as substitute competitors who sell different products and services to your target audience in the same location. For example, a dine-in restaurant is a substitute competitor for a food truck in the same precinct.

2. Collect All the Data About Your Competitors

The second step is to research all the aspects of these businesses, including their products, pricing, promotions and placement of products. It is also essential to identify their positioning in the marketplace, customer service, sales volume, profits, website traffic, marketing budget and online visibility and reputation. Entrepreneurs in South Australia must carry out customer surveys to understand the popularity levels of the competitor’s products and their utilisation benefits from the consumer’s perspective.

The information collected in this step will help the entrepreneur to stand out from the competition by establishing differentiation. It is also helpful in estimating the barriers to capturing a wider market and gauging the demand for the products. It is beneficial in understanding the customer needs getting fulfilled by competitors and the pain points of buyers.

3. Conduct the SWOT Analysis of Your Competitors

It is vital to compare the performance of the competitors with your business to know where you stand in the race. Thus, assess the strengths, weaknesses, opportunities and threats of each competitor and weigh them against your attributes through SWOT analysis. Check the reasons behind their strengths to emulate the same success formula. Also, pay attention to their weaknesses that are creating a gap in the market that your products and services can easily fill.

Assessing your competitors will help you improve your product, pricing and marketing strategy to make your presence felt in the market. For example, if the competitor is scoring more sales because of low prices and aggressive marketing, you can offer slashed rates and follow the integrated marketing approach to reach out to the maximum potential customers. It will help reduce customer churning and increase the acquisition of new customers.

4. Evaluate the Results and Plan Ahead

Once you have implemented changes in your customer acquisition approach, check if you can beat the competition. You can continue with the policy if the strategy works in your favour. However, if it fails to attract customers, you need to rethink. The problem areas can range from a lack of uniqueness in your products to ineffective marketing campaigns.

Get customer feedback to identify their needs and what they expect from the business. Try to match their expectations better than the competitors to grab their attention. Set your business goals, gather the resources needed to achieve them and implement the best possible strategies to outshine the competition. Make sure that you keep innovating according to changing industry trends and customer behaviour to stay relevant.

Why Businesses Need Competitive Analysis

Entrepreneurs must conduct a competitive analysis every quarter to stay on top of the latest developments in the marketplace. If you have purchased a business for sale Adelaide, you cannot afford to miss this because it helps to measure the performance of competitors.

It gives an insight into the activities in the marketplace and identifies the weak areas of competitors for seizing growth opportunities. Thus, business owners become better positioned to reduce risks arising from stiff competition and recognise market saturation. It extends the advantage of learning from the mistakes of existing players and avoiding these challenges.

Wrapping Up

Competition cannot be neglected or avoided. Entrepreneurs need to learn to establish themselves in the clutter of brands that are vying for the attention of the customers. It helps to build differentiation and a competitive advantage that promotes growth and revenue.