Competition is a fact of business - but look to turn it to your
advantage. You can stay ahead of the pack by making sure you're
clued up on what your competitors are up to and finding niches they
haven't yet explored. Even if you can't compete with your larger
competitors on price, find a good unique selling point (USP) and
customers will be streaming through your doors.
Why look at the competition?
- Starting a business without looking
at what the competition would be foolhardy: analysing your
competition allows you to come up with a set of USPs and
decide how you will differentiate your business from
its competition. Looking at where your competitors' weaknesses lie
will help you determine where your own business' strengths will
- Looking at your competitors will allow you to work out
where they will pose threats. For example, do they have a
larger marketing budget or do they hold more sway with certain
suppliers or distributors?
- Conducting an analysis of all your
competitors' strengths and weaknesses will help you to
determine exactly how and where your product should be placed
in the market and how your customers will react to your
- If your product or service is wrongly priced, it won't perform
properly. Looking at how your competitors price their goods will
give you a good idea of how to price your own offering
based on where you decide to place it in the market.
- Whether you want to follow the lead set by your competitors or
take an entirely different approach, looking at how they promote
their businesses will help you to come up with an effective
marketing strategy for your company.
- Competitors often serve as a useful springboard for
innovation. If they have come up with a good idea, ask
yourself how you can build on it - or, if they've used a strategy
which was totally ineffective, find out why and whether you could
improve on their idea.
Working out who your competitors are
- Competitors aren't just the Pepsi to your Coca-Cola.
Everyone who will detract from your profits is a
competitor - no matter how large or small they are. Think
outside the box. If you're planning to manufacture socks, don't
just look at rival sock manufacturers: think about other footwear
companies, designer brands, knitwear boutiques, eBay - even sandal
manufacturers will pose a threat.
- Competitors are everywhere. Consider some of the following to
find out about them:
- Industry magazines
- Trade fairs and industry events
- Networking events
- Industry bodies
- Local Chambers of Commerce
- The internet
- Brochures and marketing literature
- Companies House
- Planning applications
What to find out about your competitors
- What their customers think of them. Search the
internet, blogs and social networks to find out what people are
saying about them - set up Google Alerts to be updated each time a
news article or blog mentions them. Ask customers directly as well
- what are your competitors doing well? What are they doing badly?
Are there any gaps they aren't filling?
- How they are promoting and branding themselves.
Looking at your competitors' promotional activities will allow you
to differentiate your own - or nab their ideas and build on them.
If they're likely to have one, ask a friend or employee to request
a brochure or media pack, or just look at their website and
advertising to get a feel for how they're promoting
- Find out how much they're charging for their product or
service and what that cost provides. Do they have any
special offers? Do they bundle in any freebies? What sort of
customer service or support package do clients receive as part of
the price? Is there a premium equivalent? Many businesses have a
price list on their website - if not, find out from customers or
just ask a friend or employee to investigate for you.
- Find out who their suppliers and distributors are and
whether they have signed an exclusivity deal with your
competitor. Would they be willing to stock your product or
supply to you? If your product is better than your competitors', is
there a chance they might ditch them altogether in favour of your
product? Arrange a meeting with them and try to glean as much
information as you can.
- Use information about your competitors to decide on your
- Use competitor information to determine where your product
should be placed in the market
- Looking at how your competitors price their goods will give
help you how to price your own offering
- Borrow ideas to help you to come up with a marketing
- Use competitors as a springboard for innovation
- Everyone who will detract from your profits is a
- Find out what competitors' customers think of them
- Look at how they are promoting and branding themselves
- Find out how they price their offerings
- Find out who their suppliers and distributors are and try to
arrange a meeting with them
SWOT analysis: a method of taking an objective look
at a business by assessing its strengths, weaknesses, opportunities
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