Mastering Competitive Analysis: Methods and Benefits

When you’re running a small business, it’s easy to get so focused on boosting profits that you lose track of who your competitors are and what they’re doing.

If you think checking out the competition is unethical or might lead to copying their ideas, don’t worry. Researching the competition is a standard practice. In fact, it’s something every successful business should do.

There are solid reasons to explore what your competition is up to. The biggest one is you can learn from their mistakes and avoid making the same errors that could hurt your business.

Another good reason to look into your competitors is to see what’s working for them. If you find strategies that make sense for your business, you can use those insights for your own success.

It’s not always clear who your competitors are. Unlike big brands like Coca-Cola and Pepsi, smaller businesses might not have such obvious rivals. The first step is to identify who they are, which you can do in several ways.

Once you know who your competitors are, you need to gather useful information about them. Pay attention to what their customers are saying about their products and services. You can find this info on social media, blogs, and forums. Setting up a Google Alert for mentions of your competitors can also be helpful.

If your competitors sell products online, read through the customer reviews. These reviews can offer valuable insights into customer service and product quality.

Look closely at their marketing strategies. See where they are focusing their efforts and consider if it could be beneficial for your business to market in similar areas. Analyze their branding to see if it’s working well or if it has flaws you can avoid.

Check their prices too. If they are charging significantly more or less for a similar product, it may prompt you to reconsider your own pricing strategy.

Lastly, find out where they source their supplies. Knowing who their distributors are and understanding their cost structure can reveal if your competitors have a price advantage over you.