In our previous post, we discussed at length the advantages that come with properly identifying your competitors. Being successful in your particular market requires you to know almost as much about your competitors as you do your own company.
Grab A Competitive Edge
For instance, do you know which of your competitors poses the most immediate threat to your own customer base and market share? Do you know which of your competitors are targeting your client base with advertising and marketing initiatives? Do you know which of your competitors most closely imitates or mirrors what makes your products or services unique in the marketplace? As you can see, not knowing the answers to these questions puts you and your business at a distinct competitive disadvantage.
Completing a competitive analysis is the most straightforward and complete way to answer these and other crucial questions about your competition. A competitive analysis is a formal evaluation of your business or organization’s competitors, both existing and potential, and it is integral part of any professional marketing plan. The optimal way to prepare a competitive analysis for your business is to outsource the project to marketing professionals. But if there are limited resources anyone can conduct and compile their own competitive analysis of their own business. This can be done simply by starting out doing a bit of research and accurately compiling and answering the right list of questions about the competition.
Identifying Potential Competitors
We mentioned that our previous blog post covered at length the topic of identifying your competitors. However, identifying your existing competitors is only one part of the process. In order to completely and accurately compile a competitive analysis, you must also identify and assess potential competitors as well. Wait, you say, how can I identify a competitor that doesn’t yet exist? We understand that the initial concept of trying to predict when a competitor may enter your industry or market sounds ridiculous – after all, there is no crystal ball that can be used to predict the future. And it is impossible to predict when another company or entrepreneur may decide to suddenly enter your market and set up shop.
However, it is possible and reasonable to study other businesses and organizations that operate within related industries or offer products and services that are similar in many ways to yours. By identifying and studying these potential competitors, you can help prevent your business or organization from being caught off guard if they do decide to enter your industry or market and become a competitor. After all, it’s very likely that they will prepare a competitive analysis of your industry and market, and maybe even your business, before diving in!
Not All Competitors Are Created Equal
In almost every industry, there are a wide variety of companies competing for the same pool of customers. For instance, if you were to open a casual or fast food restaurant that serves standard American staples such as hamburgers, french fries and milkshakes, your competitors would include other small, independently owned restaurants and franchises of restaurant conglomerates with global presences and billions of dollars in revenues. Now, should you consider all of your competitors equal if one competitor could outspend the others thousands of times over when developing and advertising their business, or could undercut you on price and availability? Of course not!
Accurately identifying both existing and potential competitors in this manner allows you to identify and capitalize on ways that you can more equitably compete for the same pool of customers. For instance, you can’t outspend a monolithic competitor on advertising or marketing, but you also aren’t confined in the same ways that a franchise owner aligned with such a competitor may be confined. You can rapidly develop new products and services that are superior in quality or are tailored to your local market, and you can stress your underdog and “locally owned and operated” status in your limited marketing and advertising efforts.
However, without conducting a competitive analysis and identifying who your existing and potential competitors are and the advantages and disadvantages of their position in the marketplace, you won’t be able to respond in a way that levels the playing field for your business.
Why should your customers and clients choose you and your business? After you have successfully completed your competitive analysis, it’s equally important to identify what makes you and your business unique in the marketplace!
At Blue Zenith, we can help you cut through the “noise” that exists both online and off, helping your target market identify what makes your business or organization unique!