First, let’s define what a competitive analysis is.
It is a method of evaluating the strengths and weaknesses of various marketing tactics within an industry by comparing the strategies of competitors. It helps a company in determining potential market advantages and obstacles for a product or service, as well as monitoring how direct and indirect competitors execute marketing, pricing, and distribution strategies.
Planning, investigation, and honest self-analysis are all necessary components of competitive analysis. Take it step by step, and you might be amazed at what you learn about the business climate in your area.
It helps a company in determining potential market advantages and obstacles for a product or service, as well as monitoring how direct and indirect competitors execute marketing, pricing, and distribution strategies.
Whether it’s your first competitor study or a refresher on the current industry, conducting an eCommerce competition analysis is a crucial step in:
- Develop an idea of your company’s position in the market.
- Gain a better understanding of your competitors’ past, present, and future plans.
- Examine your competitors’ strengths and weaknesses.
- Establish a solid foundation for your own plan.
- Assist in determining whom you should compete against directly and introduce you to emergent competitors.
- Demonstrate how you’re different from your competitors to potential financing sources.
The first thing you must do in this analysis is to identify your competitors and know them very well and try to measure how much they pose a risk to you.
This appears to be a straightforward technique on the surface. A fast Google search indicates who else is offering things that are similar to yours. However, understanding competition needs. some thought and depth. To begin, you must know very well the many types of competition you may meet.
How you can do this with a great outing, simply you can follow these steps to keep research structured and organized:
Create a list of 6–8 competitors.
Start searching for your product and business idea on Google, Amazon, and Alexa to find relevant companies to include in your analysis. You’re looking for a mix of challengers who can:
- Sell stuff that is similar to yours
- Have a related business idea to yours.
- Market to audiences with similar and somewhat different demographics.
Stick with a group of six to eight relevant competitors to draw together a list of different competitors that will offer you a good look at the competitive landscape that is neither too tiny nor too large.
Assemble a database.
Keep data on this group of rivals arranged in tables or worksheets that can be easily shared and adjusted over time as you collect it. You’ll compare and differentiate competitors in this document based on a variety of characteristics, including:
- Range of prices
- Offerings of products
- Participation in social media
- Content for generating leads
- Offers for first-time visitors
- Other characteristics valued for comparing
Identify the different types of competitors
Start your worksheet by classifying each competitor as a direct or indirect competitor. This will help you to find out how much they related to your industry.
- Direct competitors, also known as primary competitors, are businesses that supply a similar product to a similar target market.
- Indirect competitors are those who sell a more expensive or less expensive version of your product in a different market.
Determine your competitors’ position in the market.
A company’s most effective marketing weapon is positioning. Positioning is important because it allows you to connect with your target audience and keep them interested for a longer period of time. Your messaging, values and overall business strategy are all influenced by it.
Consider the following questions when evaluating your competitors’ positioning:
- What is the message they send to their customers?
- What is the product positioning strategy they follow?
- What is the identity of their business?
- What words do they use to describe their value proposition?
And keep in mind that if you can figure out their communication structure, you’ll be able to position yourself differently and stand out from the competition.
Make SWOT analysis.
It is a simple Method for Identifying Your Competitive Advantage, A SWOT analysis identifies the positive and negative aspects of your business from both an internal and external perspective by identifying your company’s:
The present is the focus of strengths and weaknesses. They are factors that you have control over and that you can adjust over time.
You have no control over opportunities or threats. Changes can be planned for, but these factors are beyond your control.
Eventually, It’s crucial to stay on top of the market competition. Brands should establish a ranking/scoring system for each of these components in order to acquire actionable insights. The study should be carried out on a frequent basis to keep up with the overall market position and to swiftly discover prospective opportunities.