Not only designing strategies to develop marketing and increase sales, running a business also requires competitor analysis. How do competitors or competitors get more sales? What kind of marketing strategy is being carried out, so as to obtain high brand awareness from potential customers/service users?
Competitor analysis can be carried out for large-scale businesses or at the MSME level. If done in the right way, competitor analysis can provide benefits for businesses. Finding business opportunities that have never been thought of to creating marketing strategies that are right on target are two examples of the benefits of competitor analysis. In essence, by carrying out an appropriate competitor analysis, it is possible to get the maximum profit from the business being undertaken can be achieved more effectively and efficiently.
What is meant by competitors?
Competitor or competitor analysis is a process of identifying business competitors, such as researching various marketing strategies, price competition, to the strengths and weaknesses of competitors and comparisons with the business being undertaken. The results of this identification process can be used as a further business plan. That way, the achievements of the business undertaken are able to exceed the achievements of competitors and dominate the market.
An important aspect of competitor analysis
Can a business grow without a competitor analysis strategy? It's difficult, yes. The reason is, by not comparing or finding out what competitors are doing to attract customers in the market, the business you are trying to do will feel like walking on the street. Without competitor analysis, innovation and changes in a more advanced direction are also more difficult to do. What aspects need to be considered when conducting a competitor analysis?
- Description of the company's target market.
- Product or service details.
- Current and projected target market, sales, and revenue.
- Price comparison.
- Analysis of marketing strategy and social media.
- Product marketing locations and places, whether online or offline with physical stores.
Business decisions can be taken from processing data based on the aspects mentioned above. It would be better if data collection and implementation of report results could be carried out factually and in a not too long period of time. Why so? Market trends change frequently, so companies need to always be responsive and flexible to changes.
How to do a competitor analysis
Finding out what to focus on when conducting a competitor analysis is quite complicated. Below are 6 steps to get started with problem identification. Before starting a competitor analysis, also consider what you hope to achieve from this process. Do further research that aligns with the stated goals.
1. Identify your competitors
It is important for businesses to make a list of potential competitors. From this list, you will see an overview from the consumer's point of view in making a decision, "which product will I buy?". Find out if your company name is considered by consumers. How to do it? An easy way to find out the answer is to search your product name or category on Google or another search engine. Browse the search results.
Another way is by conducting surveys or interviewing consumers who have made transactions or used your company's services. Ask about alternatives or other options they considered before deciding to use your product or service.
When you complete this list of potential competitors, try to include a variety of companies so that your assessment of market conditions is more accurate.
2. Create a competitor matrix
Before you dive into competitor analysis, take a moment to process the data to make it more organized. Make a competitor matrix or competitor tile. The trick is to create a special table or dashboard that you can use to organize your research. That way, you can more easily compare and understand the data that has been collected.
Start by creating a row or column for each competitor you've identified. On the other axes, list the data points or categories of information you want to know about each competitor. You can add more categories while the competitor identification process continues.
3. Gather background information
Once you have a list of competitors to research, start studying their business. Look for the most basic information first, and build on the data that is already available. Start by looking at the company website, social media pages, and news articles that talk about their product or service. Here's some basic information you can look for.
This information includes the company's founding date, funding sources, and mergers or acquisitions related to competing companies.
This data includes where your competitors conduct business operations. Apart from that, you can also do research by knowing which regions/countries your competitors offer their products or services to.
Find out about the number of employees through their social media pages. Some companies are quite open with the number of employees employed. In addition, the large number of employees can be an illustration of the amount of income generated. Unfortunately, for companies with smaller business scale, the estimated revenue is not always published.
4. Create a target consumer profile from competitors
Without consumers and customers, business cannot run. By doing a competitor analysis, you can get an idea of the target consumers expected by other companies. In short, the methods include:
- Understand the company's mission and vision.
- Identify the message conveyed and the communication style used.
- Observe who they interact with on social media.
- If there are, study reviews from consumers/customers shared on social media or company pages.
Use this information to create a profile of who your competitors are trying to reach with the products or services you offer. This consumer profile will probably be similar to your own business target consumers. Note the differences and find better strategy opportunities.
5. Analysis of strengths and weaknesses
Using the information that has been collected, consider the strengths and weaknesses of each competitor on your competitors list. There are important questions that need to be analyzed such as the reasons consumers choose products or services from company A over company B. Write down the conclusions on the competitor matrix that you made earlier.
Finally, consider your own company's strengths and weaknesses. How does your business compare to the competitors you've researched? Knowing what differentiates your business from competitors, where your business is positioned in the market/consumer perspective can help you better meet the needs of your target consumers.
These five ways to do competitor analysis have a correlation between one point and another. These steps are complementary, so it will be difficult to identify competitors in the market without carrying out the five aspects that have been described. Competitor analysis is very useful for developing your business. The most important point after identifying competitors is implementing the research results and continuing to evaluate them on an ongoing basis.
