Market analysis and competitor analysis is very important when you want to start a business. Knowing about your competitors helps you understand the market better, customers closely and forecast demand.
Businesses that cannot take risks or cannot afford to do R&D has to have competitor analysis to learn market trends in detail. This becomes the only way to stand out in the competition for these companies.
Here is our process of doing competitor analysis which can be followed by any business regardless of the industry they operate.
Step 1: Identify current and future competitors in market
Firstly, list down all the players in your industry. For instance let’s say you are selling sweatshirts in India, you need to know who all are in the same business, both branded and unbranded.
You have to maintain a list of competitors, updated frequently. Take 20 mins everyday to browse through web and take a brief look at others website, social media pages, listings, etc. and see if you can find anybody else in your market.
We use SimilerWeb to keep a track on websites operating in the same industry. Doing this, we get to know who are the key players in the industry, how they rank, how they are presenting themselves and their worth.
Step 2: SWOT
Now that you know your competitors name and website address, it’s time to dig a little further in understanding their strategy. Work out their strengths, weaknesses, opportunities and threats. This will also be an opportunity for you to understand the market better.
Try to figure out their core strengths, for example if they are having a great social media presence, actively posting and interacting with their followers on a daily basis, make a note of them in bullets. Similarly, do the same for their weakness, opportunities and threats and note it down.
Here is how you get started! Google a competitor’s name and find where they are present. List all the channels down, get into each of these and see how active they are, analyze your worth of being present there and how their audience is reacting. Then look into their brand as a whole in terms of quality, communication, sales, support, rating and conversion strategy.
Step 3: Look into opportunities
Now that we know strengths, weaknesses, opportunities and threats of our competitors, we will try to find patterns and figure out opportunities to sell our business.
If they have a strong presence on Facebook and are selling their products by paid promotions and advertising, figure out the products and services they are marketing through these channels. For example, if the sales is good but the quality of the creatives could be better, you can do it and kickstart your campaigns. Also, if they haven’t tapped into a channel where you think your target audience spend their time, plan to be present there as soon as possible.
Our methodology is simple. We use Whatrunswhere and check for all the things our competitors are doing. In addition, we talk to our TG and understand where they spend time on internet, at what time they specifically spend their time and what would they like to consume. Then we plan to give them what they like, when they want, in the way they like it.
Step 4: Strategy
This is the most important step. Coming up with a strategy that helps in competing with people who are already in the market from a long time is very difficult, keeping in mind how difficult it is to be consistent for small companies.
There are two ways to approach in planning your strategy. One by following exactly what your competitors are doing and slowly grow by improving your presentable’s. Second approach is to make something out of the box, put more effort and grow in a faster rate (FYI it’s harder than it sounds).
Come up with weekly roadmaps that explain what you need to do, timelines to execute them, purpose and realistic targets you need to achieve. Put it on a paper and keep a check on them as you achieve.
We usually do it in spreadsheets. We list down the tasks that needs to be carried on a daily basis, set goals and timelines for achieving it. After that we prioritize our work based on the deliverables. For example, if we have to send out newsletter on a Friday, we generate content on Monday, design creatives on Wednesday, make the template by Thursday and schedule it.
Consider using Gantt chart to track how you are doing in terms of meeting deadlines and see if you can optimize your workflow for better performance.
Step 5: Compare and Improve
Monitor your progress at regular intervals of time. Set equal time frames where you check momentum of all your competitors and see where you stand in comparison to them. If you are doing better than your last interval, you are doing things right, otherwise you need to rethink your strategies.
For every action, there is always an equal and opposite reaction. Your competitors will also be watching you and reacting. So make sure that you do these things on a regular basis. Keep looking for new competitors, go through the above steps again and again.
Here is a secret that we found out with time. All the companies do their initial competitor analysis, but won’t keep it as a repetitive process. They’ll think they are doing better than their competitors, when the other company will have figured out a better way and implemented it.
So, don’t forget to keep those 20 minutes on your calendar every day for doing this.