For many businesses, whether they run a big Fortune 500 company or are simply trying to make a small business viable, they don’t like to think about their competitors. Those competitors are in the same niche, taking the same customers that they are trying to get, and every success they have is often a detriment to another business. For businesses, it is often best not to think about them and focus on their own endeavors, because it is a dog-eat-dog world, and they need to keep the business afloat.
But what if that is wrong? What if spending some time focusing on competitors and what they are doing can actually benefit a business? Getting some insight into competitors and understanding how their business works can be extremely helpful and might even boost how well a business can connect to its niche!
Individuals who want to start getting some information about their competitors can actually do so legally and easily. But what should they do with the information they receive?
Gathering information about competitors
Information about competitors can help a business when it is just starting out. For example, it can be interesting to see what other companies in the niche are offering to their customers, as well as what they are pricing. Rather than trying to set up prices and come up with unique offerings, businesses can inspect competitors and see what they are offering.
They might decide to borrow some of their ideas and make them unique, or they might decide to fill in any gaps that they aren’t meeting with their products and services, or even compare prices and adjust them accordingly. Additionally, businesses can look at how they are marketing by signing up for their email list or browsing their social media page.
By understanding how competitors are connecting to their customers, a business can see if they have any strategies that they hadn’t thought of, or if they are reaching their market through a field they hadn’t considered. If the competitors have a successful social media presence or are marketing with video or audio content, a business that isn’t currently using these avenues can explore them.
Additionally, individuals should explore how they are marketing themselves. Are they constantly going to networking events and sponsoring events? They could send a representative to events to see how they are setting up their booths, how they talk to both long-term and potential customers, and who is visiting their booths.
Are they taking out advertisements on the radio, television, or newspaper? Businesses can learn from their advertising and marketing plans and shouldn’t be afraid to copy some of their strategies. Businesses shouldn’t waste time reinventing the wheel.
How this can help a business
Once a business has gathered all the various pieces of information that they can about their competitors, they need to make sure that they are actually using it. For many businesses, this information can be put into three categories.
The first category is what this competitor is doing better than the business. Maybe they are making more money, maybe they are bringing in more customers or selling more products per month, or maybe they have a better social media outreach. Businesses need to make sure that they know what their competitors are doing better, so they can change their strategy.
Businesses should always make sure to innovate and not imitate. They don’t just want to do what their competitors are doing because it might be popular. Instead, they should try to make their tactics unique. For example, if competitors are sending out massively popular emails for their email list, the business can analyze, examine, and replicate their emails, adding personal touches to make it unique.
Additionally, businesses can look at what competitors are doing worse as well. It can be very easy to just see a company’s strengths and think that they can do no wrong. However, every company has strengths and weaknesses that can be compared.
That doesn’t mean that a business can rest on its laurels and allow the company to go lax on areas of strength, but instead, it should focus on growing strengths and redoubling efforts to continue to stay ahead.
Finally, the last category is what competitors are doing the same as the business. A business can examine areas where they are both putting in the same amount of effort, because there could be some opportunities there for growth.
Competitive insights about the market
Focusing on what competitors are doing well can also give businesses a good insight into what customers in the niche actually want. By analyzing and understanding what aspects of competitors’ products are a hit with customers, businesses can figure out how to improve their own products. If competitors are selling products that customers really want, then the business can examine why those products are so wanted and fill in the gaps in the market.
Any business, no matter how big or small, can get some benefit from observing what competitors are selling.
How to analyze competitors
It is very easy to look at competitors and see what they are doing for their business, and it is easy to find the information they are sharing about how they market and what is selling. However, what can be hard is figuring out what to do with all that information. There are plenty of things to analyze and even more places to start whenever a business looks at improving.
Thankfully, there are plenty of ways to make the entire process easier, often by using competitive analysis models. These frameworks are designed to not only help a business analyze the competition but also will ensure that they have market trends and can find ways to grow without spending hours sifting through data points.
Here are some of the most common types of competitive analysis frameworks, and while no one is better than the other, businesses should still pick the one that is going to best benefit the company and employees.
The SWOT analysis
SWOT analysis is all in the name. This chart analyzes a company with the following four categories: strengths, weaknesses, opportunities, and threats. All of these are self-explanatory, where a business can analyze their company in those four categories, as well as their competitors. While strengths and weaknesses can inform the business plan for how to deal with an opposing company, businesses need to mostly focus on the opportunities they can take advantage of, and the threats that are facing the company. Every threat is an opportunity.
Strategic group analysis
This method of analysis shows all the competitors in a map or chart, and all the competitors are placed into their own strategic groups. They can group the competitors through categories like market shares, characteristics, the services they offer, or the products they provide. Then they can put all this data into a display that makes it easy to see where the focus is going.
For example, a bakery owner might create a graph showing the average cost of certain pastries and how many sales they make a week. Then they will put the rest of the bakeries onto the graph to see who the highest sellers are and what other trends they need to watch out for.
Porters Five Forces
Finally, the framework of Porters Five Forces focuses on five categories, which help people analyze an industry within the five major fields: buyers, suppliers, substitutes, rivalry, and new entrants.
Buyers show how many buyers there are and how they affect the market. Suppliers show how the industry supplies can change prices. Substitutes show how many alternative products are on the market. Rivalry covers how many competitors the company will have. Lastly, new entrants show how easy it is for new businesses to join the market.
All of these categories can help a business analyze an entire market or industry and create a business plan. For example, if the framework shows that the industry has many suppliers and that affects the prices due to more supply and less demand, the company can prepare for that ahead of time.
Learning about business insights
Gathering and analyzing data can be extremely difficult, even with the aid of a framework. It takes a special kind of education to use competitor data to increase the success of a business, and one of the best places to start is with an MBA. A Master of Business Administration is designed to educate students about the management of businesses in a holistic mindset, especially around fields like marketing, finance, and accounting.
Students can take all sorts of MBAs, including one online, but if they are trying to build their own business or make their own space in an existing business, they might be asking how long to get MBA online? St Bonaventure University’s online MBA programs can be completed in about two years, and also give the students the flexibility to maintain a good work-life balance. St Bonaventure University’s online Master of Business Administration program allows students to become generalists or specialize in areas like business analytics, finance and marketing.
With an MBA, students will learn a lot about what makes a business tick and will be able to focus on managing all the data and then using it to help the business grow.
Observe competitors
Many people really don’t like delving into the business practices of their competitors. Some don’t see the point of looking at a business that is doing much better than they are when they could be using their own strategies to grow, others feel despair and anger looking at a business that is doing better than they are. Some even feel hopeless because they don’t have the clout, resources, or money to do what their competitors are doing.
But they shouldn’t get negative whenever it comes to analyzing competitors, because they can learn a lot from them and from their success. In fact, the more successful competitors are, the more a business should want to learn from them because they are obviously doing something right.
Using competitive insights to understand what makes competitors so successful, and then putting a unique spin on what the other businesses in the niche are doing, can be extremely helpful for growing businesses. They will find that they will have more clients, more opportunities to reach those clients, and more power to build the business and the niche than they first thought.
Whenever a business compares itself to competitors, it will find things that it can do that competitors can’t, and if they can harness that, they will really find success.