Each entrepreneur wants his business to be alone on the market without competition. But, it is an unrealistic and probably unachievable situation, at least for a longer period to operate without competitors.
Competition is something that cannot be avoided, regardless 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 the analysis of 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 which will be manifested through declining market share, lower sales, a decline in the number of customers and yes, the biggest 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 answers 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 the influence that they have or will have in the future on your company. Make a list with 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 important competitors, you can start to analyze them to answer this question. You can use competitive analysis, and the result from this analysis will be the simple comparison between your business and your competitors based on most important 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 their products or services? When you define your competitors, think about their 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? Because you have a list of competitor’s products and services answering this question you will make a similar analysis as presented in the figure for question two.
6. What is the value that they offer to their customers? Think about the value that your competitors are offering to their customers. This can be products characteristics, features, product’s quality, benefits, problems they are solving, etc.
7. Are they delivering more or less value to their customers compared with your offer and your deliverables? When you define their value, you can analyze to compare their value with the value you are offering to your customers.
8. What is something good about their offer that you don’t have in your offer? Because the value is one thing, it is important to analyze and compare with yourself their offerings.
9. Can you implement something that you don’t have currently in your value that your competitors have? With previous questions, you already come to the conclusions 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 in some aspects your company is behind the competitors.
10. What is their total offer? As you already know the products and services are the 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 customers perspective.
11. Is it different from yours? If it differs from your total offer, what are the differences? Are they know something more about the customers on the market?
12. What are the elements where their offer is better than yours? Answering this question make a list of the elements of your total offer that you doesn’t offer to customers and their total offer that they are currently offering.
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 value these difference?
14. What are the benefits and features that they offer with their products or services? You can also analyze their products and services, or specifically the benefits and features that are included in their products and services.
16. Who are their most important customers? Think about the segmentation and what they are targeting. Why is this situation?
17. How your competitors encourage their customers to buy from them? It is important to know what techniques and approaches your competitors use to encourage their customer to buy from them.
18. How much 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 to check where you are positioned when it comes to the pricing.
19. Where are they advertising their products or services? It is important to know and follow advertising strategies and tactics used by your competitors.
20. How are they recruiting new staff with high skills for their business? This is an important question related to their human resource approach.
21. How often you analyze them? This is not a process that can be done once and never again. You need to continue with these questions.
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 finish answering all these questions. Why you need to lose your time if you don’t take action steps to improve your business and become better from your competitors.
Question: Have you ever analyzed your competition? How this type of analysis help your business to become better than competitor’s business?