Completing ‘competitor analysis’ is a fundamental part of planning a business – remember to download our FREE planning resources which will include layouts for these documents. Just click on this link for FREE downloads!
It is unusual for a new company to create an entirely new market for their product or service, the vast majority move into an existing market space and attempt to be different, higher quality, lower cost, more local or simply new.
If that is the case then it follows that the new boy / girl on the block is looking to take £’s that would otherwise have gone elsewhere. Of course it’s possible to just kick off and win business without knowing or worrying who would have won it if you weren’t around.
However, the reality is that it is much easier to win if you know who you are playing against, and it is even easier if you know those people really, really well.
Think strategically and knowledgeably
It doesn’t matter if you are a global player looking to gain share across the world, or a corner shop looking to take business from the local supermarket, knowing who your competitor is, how they play and where they make their money can really help.
The most graphic example of this across history was Komatsu, the up and coming manufacturer of earth moving equipment targeted the traditional leader, Caterpillar. The strategy of the company was simple and easy to understand: “Kill Caterpillar”. They designed every product to be just a bit better than Caterpillar, a bit cheaper than Caterpillar, the warranty a bit longer than Caterpillar and so on.
It the digital age, there is no excuse ‘not’ to do this. Accounts are available on line, websites detail products (and their technical specifications), the competitor’s people are all over LinkedIn and Facebook and their products can be traced to their customer’s websites in a very short time.
It’s also possible to review their website traffic (and relative success) through readily accessible site comparison tools.
Competitor analysis metrics
Information is important, but it’s how you evaluate it that really matters.
- What are their key products?
- What is their pricing structure?
- Who are their major customers?
- How do they go to market?
- Are they growing? (Look at the accounts don’t believe what they say)
- Are they growing profitably?
- Where do they make the highest margin, look at spares or direct to consumer channels?
Competitor analysis is only one tool and it’s vital that business leaders decide who ‘they’ are and follow their own route, but careful prior analysis of the competitor can really guide the thought process of deciding who you want to be.
Ignore what you thought you knew already, start each analysis from scratch and use facts, not folklore. Download our FREE worksheet for more thoughts and help. If you use a coach or mentor, they can help with the dispassionate review of your competitors.
Blunt thinking on competitor analysis from Yorkshire Powerhouse
Have you any questions?
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