eBusiness
Competitor knowledge is vital to understanding your marketplace. Conducting a competitive analysis allows you to gauge how well your business compares against its rivals in the marketplace, and identify any opportunities to overthrow them.
Competitor identification can also help businesses avoid costly mistakes and capitalize on opportunities. Sun Tzu famously said it best when he said, “Know your enemy and yourself; in that way you will not fear one hundred battles.”
Identify your direct competition.
Understanding your competition is vital for business success, enabling you to craft effective marketing strategies that give your product or service an edge against its rivals. Furthermore, understanding their strengths and weaknesses enables you to improve them yourself as well.
There are two kinds of competitors: direct and indirect. Direct competitors are businesses offering similar products as you and selling them to similar customers, while indirect competitors provide different offerings but help reach similar goals for customers – for instance, both companies that produce bread and another that sells chicken tenders serve the same customers by different means but offer food services in general.
For an in-depth evaluation of your direct competition, conduct a competitive analysis using business directories and social media to research which other businesses sell similar products/services as you. Once this data has been compiled, go directly into your market to assess them according to quality, pricing and marketing strategy; furthermore speak to sales team about what companies they come across when selling your product so as to understand who holds most market share.
Indirect competition poses a threat, since it could convince your customers to switch away from you and turn instead towards one of your indirect rivals. To combat this risk, it’s crucial that your offering stands out from those of indirect competitors while offering similar benefits as those provided by direct rivals.
One way to identify indirect competition is through keyword research. This will reveal which businesses or publishers are competing with you for keywords your target audience uses to search for solutions to their problems, helping you learn which websites or businesses are receiving the highest traffic numbers in your market and how they’re managing to become so well-known.
Finally, to identify indirect competition you can ask your customers directly about it. Ask them which other products or businesses they consider when making buying decisions and why – this will give you an insight into which brands may be having an effect and how you can set yourself apart from them.
Identify your indirect competition.
Not only will there be direct competitors, but indirect or substitute competitors can also pose threats to your business in different ways that might not be immediately obvious. An indirect competitor (sometimes referred to as substitute competitors) are businesses who sell different products or services but are in the same general category; for example if your office sells office supplies then indirect competition would include companies selling office equipment or furniture.
Being familiar with indirect competitors is crucial, as it gives you a greater insight into what customers might look for when shopping for your products or services. By understanding what customers look for when making purchasing decisions, this knowledge can help your business market itself more effectively to new audiences who might otherwise never consider taking part.
Keyword research and examination of competitor content are two effective methods to identify indirect competitors. With Google AdWords and Keyword Planner, you can identify companies competing with your business for similar keywords; additionally, search engines such as Bing or Yahoo offer tools for finding out who’s writing about your niche by typing it into the search box; this gives a good indication of who else might be competing against you in digital space.
Another way of identifying indirect competitors is through customer feedback surveys. When asking customers for feedback, ask them which businesses they consider when making purchases – this will allow you to identify your indirect competition as well as gain insights into what other businesses may be doing to lure away customers from you.
There are various other methods for recognizing indirect competition, including searching your competitors’ websites and social media, reviewing online reviews, and conducting market research reports. Once you have identified them, it’s essential that you make note of their strengths and weaknesses to determine where your business needs improvement. Doing this will save time, money, stress and ultimately result in higher profits down the road.
Identify your potential competition.
Understanding your competitors is a critical business skill that will enable you to better communicate with potential customers, distinguish your products from theirs, improve processes and navigate market challenges more easily. But it’s essential that you identify which type of competitor poses the greatest threat so you can keep an eye out for any emerging threats in the market.
Your direct competition are businesses that sell the same products or services that you do and share the same target audience, so they should be of primary concern and you should spend considerable time researching. To identify them, compare their features against yours, determine their marketing techniques and attend professional conferences or trade shows where possible so you can see your rivals in action and learn from their marketing strategies.
Indirect competition refers to companies who sell similar products or services outside your market but who sell similar goods. You can identify these competitors by analyzing customer feedback or searching online forums and social media, or visiting their websites and studying their marketing strategies.
Future competitors are businesses planning to enter your market soon and potentially take away some of your customers. You can identify future competitors by monitoring their growth in your market and studying their marketing strategy; additionally, look out for any trends that may cause your current customers to switch over.
Understanding your competitors is vitally important, but so too is understanding their strengths. Once you recognize their abilities, you can more effectively compete against them by assessing their pricing, product features, quality and marketing strategies; for example if your rival offers free product services but you do not, offering comparable incentives could entice customers away from you and towards you instead.
Identify your ideal customer.
Your products or services won’t matter much unless the right people buy them, which is why knowing who your competitors are important in targeting customers who will benefit you.
When conducting a competitor analysis, there are three categories of competitors to identify and assess: direct, indirect and potential. Direct competitors are those offering similar products or services as yours and competing for similar customer bases – so these should be examined first in your analysis. Identify their characteristics such as size, product offerings and price points before creating a spreadsheet to keep track of them all and track how you measure up against them.
Indirect competitors are those that, although they don’t offer exactly the same product or service as you, still compete for customers in some way. You can usually find information on indirect competitors in marketing material or company websites; such information could help identify companies which could threaten to erode your sales by offering lower price points or more promotional incentives.
Potential competitors can be identified by those preparing to launch similar products or services which could compete with yours in the near future, which you can find out by monitoring their website or social media accounts. Being aware of this information can help you plan for the future and anticipate their moves.
Your ideal customer is defined as those most likely to purchase your products or services, so taking time to identify this individual will allow your marketing and advertising strategies to work more effectively.
Your ideal customer should fit within multiple demographic parameters: age, gender and location. In addition to that, however, it’s also essential that you explore their social and psychological traits such as their personality traits, aspirations levels, fears, life philosophy approaches or worldview.
After you have identified your ideal customer, use their feedback to ascertain what value and benefits your product or service brings to their lives and determine the most effective ways to communicate these in your messaging.
