A competitor analysis is a comparison between your business and other businesses within your industry that you regard as a competitor. This may be businesses that are within your local area, offering similar services/products to your business, targeting a similar audience, etc.
For any business, it’s important to remember that you are not the only one that offers what you have to offer; it is extremely likely that there is another business that offers a part of what you are offering.
Even big corporation Netflix is aware of their competitors and what they’re currently offering which is why they’ve cut subscription prices for more than 30 countries. They are not the only streaming service available, so they need to keep up with their competitors otherwise they will not succeed.
Therefore, it is always a good idea to take a closer look at how they’re performing. Let’s go into more detail about why competitor analysis is important for any business.
Reasons for Conducting Competitor Analysis
Recognise Your Own Strengths & Weaknesses
By analysing your competitor’s strengths and weaknesses, you will in turn uncover your own strengths and weaknesses, including your Unique Selling Point (USP). Therefore, cementing what you should carry on doing and highlighting areas where you could improve – maybe taking inspiration from your competitors.
Further Your Understanding of the Industry
As well as understanding your own business even better, you will also be able to gain more understand of your industry. Throughout the analysis, you will gain valuable industry knowledge you can use to your advantage, like identifying market trends you can jump on.
Find & Take Advantage of Gaps in the Market
As soon as you find a gap in the competitor market, take that for yourself and reap the benefits. Although we mentioned above that it’s extremely likely there are businesses that offer what you offer, sometimes there is an opportunity that presents itself that your competitors are not taking advantage of. Now is your time to shine!
Identify Areas for Business Growth
By conducting competitor analysis on companies that are larger than yours, you will be able to identify areas for business growth. If you’re looking to expand and grow in different areas, this is an effective process for finding opportunities and taking inspiration from other similar businesses. This way, you might come across something you’ve never thought of before.
How Often Should You Conduct Competitor Analysis?
This is different from industry to industry, but it’s good practice to conduct a competitor analysis either every quarter or every year. This way, you can keep on top of trends and on track of your competitor’s trajectory as well as your own.
It gives you enough time to review and adjust your current strategy and get a plan in place for tackling new opportunities. Make sure you keep up to date with Chamber of Business for business news and useful resources that might help you.