When you started your business, you probably took stock of your competition and made yourself aware of their strengths and weaknesses. By doing this competitive analysis, you were better able to position your business and develop a strategy for success. But a competitive analysis isn't just helpful when your business is in its infancy. Conducting competitive analyses throughout the life of your business can be beneficial in various ways—here's how:
1. You can understand how the market has changed over time.
Without a recent competitive analysis, your business is relying on outdated information. By conducting a new analysis, you can discover what's currently trending in your market and whether up-and-coming competitors are entering the market. Depending on the information the analysis provides, you may decide to change the direction of your business or stay the course.
2. You can spot neglected parts of the market.
In an established market, you and your competitors are likely to target much of the same audience, potentially leaving unserved or underserved audiences. By identifying missed opportunities, you may be able to expand or change the focus of your business in order to gain a larger market share. In the future, your competition may implement your ideas, but being first to market could provide you with a competitive advantage.
3. You can estimate the viability of new products and services.
To stay competitive, businesses must regularly develop new products and services. But how do you ensure each new product or service will succeed? One way is to look at what's been done by the competition. Examine how they've succeeded and failed and understand why. Ask if your new product or service would be in direct competition and if it could compete in price, capability or quality. It can also help to look at products and services that are currently being developed by keeping up on the latest news about your competitors. You may be able to judge the future popularity of an idea or get inspiration to create a product or service that takes a different approach.
4. You can judge the effectiveness of your marketing strategy.
There have been many changes in the marketing landscape in the last few years. Social media and mobile have overtaken marketing budgets; high quality, useful content has become necessary to online marketing; and data-driven marketing has become more refined than ever. With this changing landscape, it can help to look at your competition and see how their marketing has changed accordingly. View your competitors' websites, social media accounts and marketing materials and evaluate their positioning and strategies. Compare this against your business's marketing and consider what you could learn from the competition.
How often do you conduct a competitive analysis?
Does your business regularly review its marketing efforts? An easy way to stay up-to-date on your competition is by including a competitive analysis with your business's regular marketing review. Need more ideas on how to stay ahead of the competition? Help your business succeed by visiting California Bank & Trust's Business Resource Center.[cite::171::cite] [cite::172::cite]