Competitor Analysis is an important part of our strategic planning process. This information outlines the main role of, and steps in competitor analysis.
Why bother to analyse competitors?
Some businesses think it is best to get on with their own plans and ignore the competition. Others become obsessed with tracking the actions of competitors (often using underhand or illegal methods). Many businesses are happy simply to track the competition, copying their moves and reacting to changes.
Competitor analysis has several important roles in strategic planning:
- To help management understand their competitive advantages/disadvantages relative to competitors
- To generate understanding of competitors’ past, present (and most importantly) future strategies
- To provide an informed basis to develop strategies to achieve competitive advantage in the future
- To help forecast the returns that may be made from future investments (e.g. how will competitors respond to a new product or pricing strategy?)
Questions we ask:
What questions should be asked when undertaking competitor analysis? The following is a useful list to bear in mind:
- Who are your competitors? (see the section on identifying competitors further below)
- What threats do they pose?
- What is the profile of your competitors?
- What are the objectives of your competitors?
- What strategies are your competitors pursuing and how successful are these strategies?
- What are the strengths and weaknesses of your competitors?
The important matter to remember is though competitor analysis is important, as we mentioned in Core Difference, your differentiation is more important, but the above processes can help.
We hope you found this information useful. We would like to remind you that this subject is best served, and more effective as part of a complete marketing plan or strategy, rather than in isolation. For further expert advice please contact us to discuss your requirements or post a question in our blog.
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