As part of the industry or sector analysis, it is important to examine the activity of competitors. Competitive analysis is about assessing the nature and extent of competition in the organisation’s market place.
As part of competitive analysis, detailed information is needed on the following:
- Competitors: who are they, where are they, what are they doing, how well they are doing, their share of the market, their strengths & weaknesses.
- Customers: how they choose a company, e.g. price, brand name, Word of Mouth, adverts, location, reputation, benefits sought etc.
Competitor Analysis involves identifying competitors that are competing for similar customers or clients. Some of the competitive factors based on which you can compare include: Products, Price, Distribution, Promotions, Location, Range of products, Quality and Brand Image.
Some of these factors may be providing a strategic advantage to the competitor in the marketplace, so gaining an understanding of how the firm is positioned with regard to competitors based on these factors is important.
Analysing competitors can help marketers better understand market dynamics, anticipate what rivals will do, and create more practical marketing plans.
How to analysing competitors?
Start by identifying current competitors and possible sources of competition in the near future, to avoid being blindsided by a new entrant. Also look at trends in market share to get a sense of which competitors are becoming more powerful.
Read: Porter’s Five Forces of Competitive Position Analysis
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