A business needs to provide customers with products that meet their needs better than other competitors in order to attract more customers, gain more market share, increase sales, make more profit, and generally to get successful.
Therefore, marketing strategies should take into account not only the needs of the target consumers, but also the policies of the competitors. This is the first step to achieve the goal of "Competitor Analysis”.
In the following, we will examine the concept of competitor analysis and the steps towards identifying and analyzing the competitors.
COMPETITOR ANALYSIS CONCEPT
"Competitor Analysis" is the process of assessing the strengths and weaknesses of current and potential competitors, which makes it possible to identify and examine opportunities and threats. In other words, competitor analysis is the process of identifying key competitors in which goals, strengths and weaknesses, policies and response patterns are evaluated. Finally, the competitors to be fought or to be avoided are identified.
COMPETITOR ANALYSIS ADVANTAGES
When analyzing competitors, the following question arises: What information should companies get from their competitors in this process? Finding the right answers to the following questions complements our knowledge of our competitors:
- Who are your competitors?
- What are their goals?
- What is their policy?
- What products do they sell?
- What is the market share of each competitor?
- What media do competitors use for advertising?
- What are the strengths and weaknesses of each?
Through competitor analysis, in addition to finding the right answers to these questions, a quick and easy way to compare the products and services of similar manufacturing companies in the market can be found.
HOW TO ANALYZE COMPETITORS
Now that we are familiar with the concept of competitor analysis and its benefits, we should answer the question, what is the competitor analysis model and how is it done? To perform a competitor analysis, it is necessary to go through two steps, which are mentioned below:
- Gathering Competitive Information
- Competitors Research
Although it is not flattering to have a competitor, there is a competitor in every business and you should try to identify it. In this case, you can be aware of their strengths and weaknesses, prospects and goals. Also, identifying, understanding and monitoring competitors means you never have to worry about them. This process is called "competitive information gathering."
Although there are many ways to find business competitors, Google and Amazon are the most important sites for competitor research. First search for your brand and then search for your product idea. Using a variety of keywords, you can find similar businesses, as well as their active social networks. Be sure to check the Alexa rank of your competitors as well. Distinguish between competitors when picking competitors. For example, put competitors who might attract your customers in one category and competitors who do not directly compete with your business in another. This way you can get an overview of competitor analysis.
COMPETITORS ANALYSIS STEPS
The main stages of analyzing competitors in a business include six steps, which we will examine in the following:
- Identify competitors
- Set competitors' goals
- Identify competitors' policies
- Evaluate the strengths and weaknesses of competitors
- Estimation of competitors' reaction patterns
- Choose competitors to attack or escape
Companies often face a wide range of competitors. In general, a company can be a competitor to all companies that produce similar goods and services. Also, competitors of a company can be considered as all companies whose manufactured goods provide similar services.
After identifying the main competitors, the marketing manager should ask himself what is the goal of each competitor and what is the behavioral motivation of each?
At first it may seem that the goal of competitors is only to "maximize profits" and all their activities are based on this goal. It should be noted, however, that companies' goals differ in the importance they place on short-term and long-term profits. Contrary to many people's beliefs, the company may also prioritize "consumer satisfaction". Therefore, in the analysis of competitors, in addition to paying attention to the goal of "profitability", one should also pay attention to other goals that are considered by them, such as growing market share, providing superior services, and so on. Knowing the composition of the competitor's goals makes it clear whether they are satisfied with their current situation. How will they react to different competitive measures?
When policies are close to each other, competition between the two institutions is more intense.
To design a suitable policy, a company should be fully aware of all the dimensions of the competing company and the quality of manufactured goods, their specifications and composition, customer service, sales pricing policy, distribution coverage, vendor policy, and advertising plans in the competing company. They should also examine the details of R&D policy, production, procurement, finance and other policies of the competing company. In order to develop an effective and efficient policy, the company should consider its competitors, potential customers and actual customers together and analyze them regularly. Then develop a competitive marketing policy. It is important to note that policies should be developed that put the company in a superior position and create the most powerful competitive advantage.
We begin this section with a question: "Are the company's competitors able to achieve their goals by implementing their policies?"
In the process of competitor analysis, marketers need to be aware of their competitors' strengths and weaknesses. To this end, the company should gather valuable and key information from its competitors over the past few years. With this information, the company becomes aware of the goals, policies and performance of competitors and thus can obtain a more accurate estimate of the strengths and weaknesses of its competitors. Important information can also be obtained in the process of analyzing competitors from other sources of information such as marketing research, personal experiences and so on. For example, in a research on customer benefit analysis, customers can be asked what benefits are valuable to them. In their opinion, what is the important feature of the company from which they receive services and products?
This information shows which of the competitors are defenseless and should be attacked? What are the methods of attacking them? In addition, this information reveals the company's weak points to competitors' movements.
The company should also be aware of their erroneous assumptions in the business when examining competing companies. Because many companies believe that "our product is of the highest quality", "customers value the price more than the service" and thus fall victim to their own misjudgment. If a competitor bases its activity on a misconception, other competitors can take advantage of it.
The goals, policies, and strengths and weaknesses of competitors are to some extent indicative of their reactions to movements such as lowering the selling price, increasing the advertising budget, introducing new products, and so on.
In the face of these issues, each competitor reacts differently. Some do not react very quickly to a competitor's move, perhaps because they consider their customers to be too loyal, or they may not notice the competitor in time, or they do not have the financial resources to react.
Others react only to certain attacks, for example, they may only react to a decrease in the selling price. Some also react quickly and strongly to any kind of attack.
Some competing companies also coexist peacefully and some are always in conflict. In general, knowing how competitors are reacting allows the company to prepare the best plans to attack them and to defend its current position in the best possible way.
The marketing manager should make decisions about how to treat competitors based on the research and information gathered in the previous steps.
For example, in competitor analysis, most companies prefer to target weak competitors because it requires less time and money. But on the other hand, attacking this group of competitors has little benefit. Businesses should also face strong competitors to increase their capabilities, and success against these competitors will undoubtedly be of greater benefit.
COMPETITOR’S ANALYSIS TOOLS
There are several tools for identifying competitors in a business, some of which we will mention below. With the help of these tools, you can track your competitors and check how they are.
- Alexa, Traffic Monitoring
- SE Ranking
- Monitor Backlinks
- Spy Fu, View competing keywords
- Open Site Explorer, Control of backup links
- Moat, Find the location of the advertisement
Alexa is one of the web traffic analysis tools. With the help of this tool, you can track the traffic of competing websites as well as your personal website. Alexa is a tool that can help you turn your data into a competitive value in business.
Helps you control competitors' search rankings in each search engine and target areas (up to five projects per website). With this tool, you can also receive detailed reports on the analysis of competitors in the main SEO, including their average position data, site traffic forecast, and so on. In addition, you can collect data for the first page of each search and get good information about the performance of competitors by looking at them.
With the help of this tool, you can track the various backlinks of the competitors and find low-quality and high-quality links. This can help bloggers and webmasters analyze the links in your business to advance your link building strategy, build quality links from your competitors, and write content for bait links. You can also use this tool to estimate the amount of traffic to a particular website based on keyword positioning and efforts to increase good backlinks.
This powerful tool allows you to view competitors' keyword data in both organic search and AdWords. This tool also provides the conditions for you to get more relevant keywords. You can see a lot of competitors' strategies just by adding keywords.
It is a well-known easy-to-use tool from MOZ that helps monitor backlinks. With this tool, you can not only follow the backlinks of all competitors, but you can also use them to improve your link building strategies. The important thing is that you can compare page data and domain authority, anchor text, link domains and links up to 5 websites.
Moat is a versatile tool for the advertising industry. It helps you understand what ads are running for different websites and top brands. With this tool, you can also see the locations and size of recently displayed ads. In general, Moat provides a step-by-step guide to where to place personal ads and can help your branding.
Our Last Word
As mentioned, in order to be successful in business and outperform competitors, it is essential to perform a process of identifying and analyzing competitors. To do this, you should first analyze the market, then, with full identification of competitors, analyze each business and prepare a competitor analysis model. Now you need to adjust your business behavior so that customers prefer you to competitors and come to you.
In this article, while expressing the concept of competitor analysis, its stages as well as competitor analysis tools for businesses were studied.