Contents
- What is competitor analysis?
- Why is competitor analysis needed?
- Methods of competitor analysis
- How to conduct competitor analysis?
What is competitor analysis?
Competitor analysis is the process of studying and evaluating key characteristics, metrics, and strategies of companies operating within the same industry. It includes aspects such as product range, pricing strategies, advertising strategies, profit levels, and sales volume. For instance, in the bicycle rental niche, it is important to analyze the cost, diversity, and quality of the bike fleet, service levels, rental location, and customer reviews.
Why is competitor analysis needed?
Competitor analysis provides valuable information about the market situation and helps determine your company's position relative to other market participants. It is necessary for:
- Assessing the level of competition in the industry.
- Identifying the strengths and weaknesses of your company.
- Determining unique selling propositions (USPs) and positioning.
- Formulating pricing strategies.
- Finding growth opportunities and assessing potential threats.
The analysis should be conducted regularly, for example, every six months, to maintain the relevance of information about market conditions and competitor actions. It is especially important to study competitors before launching new marketing initiatives, such as entering the market with a new product or rebranding.
Methods of competitor analysis
Comparative analysis
Comparative analysis is one of the simplest and most visual methods that allows for identifying key differences between competitors. To conduct it, a list of criteria for evaluation must be created. Criteria may include:
- Product or service range.
- Pricing strategies.
- Distribution channels.
- Advertising strategies.
- Positioning and brand image.
- Service levels and staff qualifications.
SWOT analysis
SWOT analysis helps identify:
- Strengths: advantages and unique qualities of your product.
- Weaknesses: drawbacks and limitations that may affect competitiveness.
- Opportunities: potential growth points and new trends.
- Threats: external factors such as competitor actions and changes in consumer preferences.
The objectivity of SWOT analysis is critically important, so it is recommended to involve independent experts for assessment.
Porter's Five Forces Model
Developed by Michael Porter, the Five Forces Model helps assess product competitiveness by analyzing factors such as:
- Competitor actions.
- Supplier positions.
- Emergence of new companies in the market.
- Changes in consumer behavior.
- Availability of substitutes.
How to conduct competitor analysis?
For successful competitor analysis, it is necessary to:
- Define the purpose: Determine specific tasks and desired results of the analysis.
- Identify methods and criteria: Choose appropriate analysis methods, such as comparative analysis or SWOT.
- Create a list of competitors: Use various sources to identify both direct and indirect competitors.
- Gather information: Research available data about competitors, including their websites, reviews, and advertising campaigns.
- Analyze data: Compare information about your business with competitor data, identifying strengths and weaknesses.
- Prepare a report: Use graphs and charts to visualize results and formulate recommendations.
Thus, competitor analysis is an important tool for understanding the market situation and developing effective strategies, which can ultimately lead to increased market share and successful business growth.