Each entrepreneur wants his business to be alone in the market without competition. But, it is an unrealistic and probably unachievable situation, at least for a more extended period to operate without competitors.
Competition is something that you cannot avoid, regardless of the size of the business or industry and market in which it operates. Even if there is no competition currently, it doesn’t mean it will last forever and will not appear shortly.
You should not be afraid of competition. But, you must implement a strategic and systematic approach to analyzing your competition. After analysis, you will need to use that knowledge in your daily business operations and management of your business.
If you ignore your competition, you will have real problems, manifested through declining market share, lower sales, a decline in the number of customers, and yes, the most significant problems as cash-flow problems. These problems will destroy your business. The fact is that you can not allow yourself to ignore such possible problems.
Because of that, you will always need to ask yourself and answer the following questions related to your competition.
1. Who are your main competitors that can have a large influence on your business?
You need to define your main competitors based on their influence or the influence they will have in the future on your company. Make a list of 5 to 10 most important companies that you have identified as competitors for you.
2. Where are they in relation to you when you conduct a competitive analysis?
When you already have a list of possible significant competitors, you can analyze them to answer this question. You can use competitive analysis, and the result from this analysis will be a simple comparison between your business and your competitors based on the most critical elements of doing business.
3. What are the possible potential competitors that are not yet competitors but can be in the future?
You need to think also about the future competitors, or possible companies that still aren’t your competitors but can become in the future. Think about possible substitute products or some innovation that can come in the future and will compete with your current offer.
4. What are your competitor’s products or services?
When you define your competitors, think about the products and services that they are offering on the market. So, make a list of all products and services that your competitors currently offer to the customers and future products and services they are developing and plan to offer.
5. Where are their products or services in relation to yours?
You will do a similar analysis as presented in the figure above because you have a list of competitors’ products and services answering this question.
6. What is the value that your competitors offer to their customers?
Think about the value that your competitors are offering to their customers. This can be product characteristics, features, quality, benefits, problems, etc.
We’re talking about the value that your company and your main competitors offer to its customers, which means comparing your offerings to what competitors are offering, where the gap is, and how you’re going to fill that gap.
These are essential things you need to follow and analyze for your competitors.
7. Are they delivering more or less value to their customers than your offer and your deliverables?
When you define their value, you can compare their value with the value you are offering to your customers.
Use a benchmarking tool to visualize the difference between you and your main competitors.
8. What is something good about their offer that you don’t have in your offer?
Because the value is one thing, it is essential to analyze and compare with yourself their offerings.
The goal of this question is to identify and write down everything you can find that is unique to their offer and that you can think about implementing and persuading your customers to give you a chance. You may not be able to think of a lot, but you should still keep at it.
9. Can you implement something that you don’t have currently in your value that your competitors have?
With previous questions, you have already concluded based on the difference between you and your competitors. So, now you need to start thinking about possible improvements or what you can implement if your company is behind the competitors in some aspects.
10. What is their total offer?
As you already know, the products and services are part of your offer, but only the part, not the total offer. Your total offer must include more things that will be your superior value. Read more about the four questions about your total offer from the customer’s perspective.
11. Is it different from your offer?
If it differs from your total offer, what are the differences? Are they know something more about the customers on the market?
These are essential questions to learn about your competitors and the customers that you are also targeting.
12. What are the elements where their offer is better than yours?
Answering this question, you will create a list of the elements of your total offer that you don’t offer to customers and the total offer that they are currently offering.
So, in such a way, if there is a gap, you will fulfill it with a better offering. Also, you can improve your offer to differentiate yourself and be one step ahead of them.
13. What are the elements where your offer is better than theirs?
Probably, you will have something in which you are better than your competitors when it comes to the offer. So, think about it and relate them to your customers. Are your customers satisfied, and are they value these differences?
14. What are the benefits and features that they offer with their products or services?
You can also analyze their products and services, specifically the benefits and features included in their products and services.
What are the advantages of using a particular product or service? A company can always say that its product or service is excellent, but to really be persuasive, its benefits and features have to be clearly defined.
15. How are they developing and finding their customers?
What are they doing to develop and find new customers? Answering this question, you will look much deeper inside their innovation process, the value they are producing, and how they develop customers for their innovative products.
This question is essential to examine the marketing differences between you and your competitors.
16. Who are their most important customers?
Think about the segmentation and what they are targeting.
You can use social media and search engines to find out who is buying products from your competitors. It’s not always the same people, but the people you want to attract will be buying from your competitors. The point is, if you want to attract the people who make up the target market, you need to know what they’re looking for and make sure your product addresses that.
17. How does your competitors encourage their customers to buy from them?
It is essential to know what techniques and approaches your competitors use to encourage their customers to buy from them.
Look at the call to action they are using, their promises, and their language to approach and encourage customers to buy from them.
18. How much do they charge for their products or services?
Now it is time to ask and answer the question related to the pricing strategies. Answers to previous questions give you many attributes that can help you check where you are positioned when it comes to pricing.
19. Where are they advertising their products or services?
It is essential to know and follow advertising strategies and tactics used by your competitors. Answering this question, you will find new advertising channels, see what your competitors are doing on them and how they communicate their values with their customers.
20. How are they recruiting new staff with high skills for their business?
This is an important question related to their human resource approach.
A competitive advantage is when one company has some feature or characteristic that allows it to offer better products or services than its competitors at a lower price. That said, a competitive advantage often takes the form of a strong workforce – one that can recruit and hire the best talent.
21. How often do you analyze your competitors?
This is not a process that can be done once and never again. You need to continue with these questions.
Your competition is never going to let you forget about them. Even if you’re not competing directly with them, their tactics influence how you do business. If you want to outsmart your competition, see how they use the tools at their disposal to beat you. This is how you can learn from their mistakes and stay ahead of them.
22. Do you apply the findings of the analysis in the everyday operations of your business?
As the last question, you want to check what you have done when you answer all these questions. Why do you need to lose your time if you don’t take action to improve your business and become better than your competitors?
Question: Have you ever analyzed your competition? How does this type of analysis help your business become better than competitors’ business?