Competitive analysis: features and options
Entering the market is always a risky business, especially if the segment is popular and has strong players. To succeed in such conditions, you have to act very carefully, thinking a few steps ahead. Otherwise, you will suffer losses and bankruptcy. One of the main rules for newcomers to the market should be to create an effective business model, based on a competitive analysis.
This type of research evaluates the performance of companies in your niche market, their methods, successes, and failures. The information obtained will help you create your own business strategy, which will include the experience of your competitors and your vision for development. The analysis helps to identify the strengths and weaknesses of your competitors, their advantages, and their mistakes in order to avoid the same difficulties later on. Moreover, competitor research can be done not only when launching a product or company. It is useful to periodically assess the situation in the market and to follow the companies in order to correct your own development strategy in time.
Before you begin your analysis, you need to understand which market players are of greater or lesser interest. Competitors are divided into three types: direct, indirect, and replacement. The first are companies that provide similar products and are in your price range. This group of companies should be paid increased attention to, as they are the ones you will have to fight the most for customers with.
Indirect competitors offer a different kind of product but work in the same price niche as you. replacement competitors are those companies that started out in a different market segment but have switched to sectors related to yours.
The search for companies for analysis can be done through queries on Google, on sites with reviews, thematic forums, and through consumer surveys. In addition, various marketplaces can be investigated by sampling a certain type of product.
The competitor analysis can be carried out in several directions. For example, it is possible to study only the features of pricing companies in a particular niche or compare product lines. It all depends on the purpose for which the process is carried out. Only direct competitors or all of them can be used for analysis.
When researching, it is convenient to use tables, by entering the names of companies and their main characteristics, you can conduct a structured analysis, and not miss anything. There are several techniques for the analysis, the 7P approach is considered classical. There are 7 parameters of the competitor, each of which is evaluated on a scale of points. The SWOT technique identifies the strengths and weaknesses of companies in different areas: financial, marketing, product range, quality and others. You can also use other options, it all depends on your preferences and goals.