An integral part of any business enterprise, are the factors of price and competitiveness. It is crucial that a competitive analysis is conducted, not only at the start-up phase of a new business, when marketing plan is being constructed, but also on a regular basis within established organizations. There are various risks associated with failing to conduct a competitive analysis, not least is the creation of marketing aids and offering in a marketplace, products or services not demanded or feasible, or are outside the consumer dictated pricing structure.
It is a situation that can be costly in valuable time and money, especially during critical startup months. A factor for serious consideration is the question of market related product, service intelligence and sustained awareness. As a business develops, the competition factor becomes increasingly crucial, in order for the competitive aspect, or advantage, to remain!
A business entity is generally forced to recognize two basic types of competition; actual and perceived; therefore, it is essential the marketing material and products of both are subjected to analysis. Indications of strategies, formats, special offers, primary benefits and especially pricing, can be assessed on a general basis, as well as revealing apparently, undeserved marketing niches!
Identification and evaluation
Like any other example of competition, identifying it and evaluating strategies and potential, will help determine compared strengths and weaknesses, related to products and services. The competitive analysis is an ever increasing critical aspect of a business marketing plan. It provides information to establish what and how a product or service is unique and accordingly, what action is needed to attract a targeted market.
The evaluation of competition is achievable by segmentation into strategically designed groups, based on how they directly compete for the consumers, with a list compiled of products, services for each strategic group, or competitor. This will be supplemented by the profitability factor, growth pattern, marketing objectives, current and past strategies. As much information as possible, should be directed towards organizational and cost structures, strengths, weaknesses and sales volumes
Accessing competitors websites is enhanced by the procedure of buying their products or services, by methods such as “Mystery Shopping,” which provides a factual experience related to identification and evaluation It also offers valuable insight into their presentations and the motivation of consultants and sales personnel, who represent and are the “public face” of these competitors. Providing competition businesses are reasonable in size, it is possible to gain information regarding them; for example, utilizing “Net Use” primary search engines. This facility offers related recent press releases and articles. For promoting various positive aspects of a business, free access websites permit users to customize their own daily news pages.
Researching the competition
Understanding competition is a critical business activity for any executive, with some organizations hiring professional expertise to determine and track competitors and regularly assess competitive applications. However, it is not always necessary for a complicated, time-consuming, and expensive process to be employed; especially with the wealth of data available on the Internet. With the investing of even a minimal amount of time, any sized business has the capability of developing a framework that will enable competitive assessments. It will gather intelligence on immediate business rivals, and enable understanding of how a particular company can position their own brand, products, and organization, in the marketplace. Business pricing and competitive analysis, have the capabilities of not only being a learning ground for preferred practices, but also helping to avoid the mistakes made, by competitors!
There are various facets associated with business pricing and competitor analysis and maintaining appropriate vigilance regarding them. Importantly, it involves how they are observed in the marketplace, by consumers and the market segment overall. What is being said about competition, as well as what they are promoting themselves, can help in differentiating one business from another. Market and competitor awareness, are also assets in developing leading trends with a business impact! An organization retaining independence in brand strategy related to the competitive scenario helps in the making of practical decisions regarding product development, pricing and marketing, as well as where an organization is placed in the brand environment.
Competitor insight benefits
There are various advantages and business benefits to be gained by a valuable insight into a competitive environment, especially when related to pricing and product tracking. These factors can be added to with research and development (R&D), as well as a variety of other competition based aspects, conducted on an ongoing basis. This enables organizations to obtain an in-depth understanding of the different external and internal environments, within which, they are competing.
By the systematic gathering of competitive research during a period of time, it is possible from tracking trends and/or scenarios, to prepare counteractive strategies. It is not uncommon for organizations of any size, to gather intelligence regarding business pricing and conduct competitive analysis, under various titles and guises. The global business environment is competitive to the extreme; therefore, it is generally seen as critical and reasonable, for any type of business operation, to create an awareness regarding any advantages they are experiencing in the marketplace.
Online competitor influences
In this day of internet inter-action, the Web is considered a foremost and generally competitive point for consumers to visit. While it’s a large window for displaying the best in products and services, it is also a view for competitors to gain a firsthand shopping experience. Competitor analysis can in various ways, be regarded as a two-edged sword; providing tremendous opportunities, advantages and benefits, but at the same revealing a wealth of information that could balance the scales of merchandising power. Accordingly, a Web audit is a usual and regular action taken by various organizations.
Free Web tools are readily available, including the receiving of notifications when competitors are mentioned online, with “Google Alerts,” and “Monitor Twitter” being such sources, if their feeds are subscribed to. Should competitors be listed as public companies, their financial filings can be viewed on the U.S. Securities and Exchange Commission's Edgar database. Although private companies can prove more difficult to research, every corporation must be chartered in a particular state!
Author Info Manish Khanna
Manish Khanna is a serial entrepreneur, philanthropist and genuine Australian success story. In a decade he has built an online empire unlike any other. He is currently the Managing Director of more than 10 individual companies. These include the flagship Business2Sell which operates internationally in 6 countries. The others include CommercialProperty2Sell, Million Dollar Mansions, Netvision, BCIC Pty Ltd and Better Franchise Group, to name a few.
With more than 21 years’ experience developing web applications plus very successfully creating, managing and growing start-ups, he is forging ahead to turn more of his innovative ideas into future success stories.