Back to top

The Importance Competitor Analysis & Intelligence for Businesses

Competitor analysis is an important part of market research that should be undertaken before setting up any business.

It is an essential activity to determine whether there is a gap in the market for your business and to assess the potential profitability of it. For existing businesses there are still many benefits that can be gained from researching competitors.

There are various different methods that can be used to investigate the competition, from simple Google searches to surveys. After setting up a company it is still useful to continue researching your competitors for a number of reasons.

Learn From Their Mistakes

No business is perfect. When conducting competitor research you are bound to find certain mistakes they have made and you should use these to your advantage by avoiding them and improving upon where possible. Exploit any mistakes you find by taking advantage of their weaknesses, whether it’s something they’re missing or a particular area of the business.

A good way to discover any mistakes your competitors are making is to search online for customer or client feedback. Social media will be home to all sorts of comments and is a great place to start for a good idea of how the target audience feels about your competitor’s products or service.

Replicate Successes

There will also be many things your competitors are doing successfully. Innovate rather than imitate, such as the way Apple have done with many features, as copying ideas directly can lead to legal trouble due to copyright infringement and other patenting issues. Plus your business would then be seen as a cheap knock-off of others.

Model your own strategies and marketing ideas on what works best for them in order to achieve the same levels of success. If it’s proving popular with their target market (which is likely the same as yours) then replicating it but with a twist should work well for your company.

Discover Opportunities

It’s important to look at competitors from further afield, such as overseas companies in the same sector. While they may not be in direct competition for sales, they could be using different techniques and ideas that can be easily and effectively replicated in your business.

Online trading is on the rise as well, so they could soon be in closer competition with your business anyway. Checking out the overseas market, whether with the intention of expanding or just for ideas, is a good step and can present any gaps in the market for future opportunities. There are various online databases that can be used to find specific information about businesses as part of your competitor research.

Formulate Future Marketing Plans

The information you gain from conducting competitor research can then be used to create fresh and successful marketing plans. Look at their advertising and marketing actions, picking out and using parts that work. For existing companies competitor analysis can be used to adapt your existing business plan.

Evaluating other business’ strategies can help show up any problems in your own, as you might be making the same mistakes without realising it. For this reason it is advisable to analyse your own company in the same way as you have competitors, to truly implement changes that will have a positive effect.

Help You Respond

Markets are always changing and new ones emerging, and it is important for your business to respond to change in an effective manner. One way of doing this is by setting up competitor analysis or research if it hasn’t been done before. This will bring up ways the market has changed, show how competitors have reacted and give a good idea of ways you should respond.

Remember that your competitors will be conducting research on your business and its strategies at the same time. They will undoubtedly make changes based on these findings so you will then need to respond in order to stay one step ahead of the game.

Researching competitors happens in every business and is an essential part of moving a company forward and increasing, or at least retaining, its customer base.