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Simple Alliance, Kenya Limited


Definition

Competitive analysis refers to a constant market analysis process by which you learn about your competitors.  This marketing strategy tool enables you to analyse your competitors’ weaknesses and strengths. 

What to Look Out for

You obtain priceless business intelligence via competitive analysis.  While conducting competitive analysis, you need to collect information about aspects such as:

  • The identity of your competitors    
  • Their activities

Methodology

Your analysis exercise could constitute many competitive strategies activities, including:

  • Studying competitors’ websites
  • Surveying competitors’ customers on clients’ views about competitors’ services and products
  • Studying competitors’ presentations at trade fairs
  • Studying competitors’ product literature
  • Examining competitors’ products
  • Researching competitors by reading industry publications

Importance

Competitive analysis enables you have a clear understanding of your competitors.  This knowledge equips you to make business decisions about:

  • How best to position your business
  • The products or services you need to provide
  • How you could effectively market your wares

Analysing your Competitors

Your competitor analysis involves several steps, such as:

  • Identifying competitors
  • Analysing competitor weaknesses and strengths
  • Examining opportunities and threats
  • Defining your business’ position

Competitor Identification

While identifying your competitors, you  look out for businesses which can offer your clients the same services products you are offering. You will encounter three categorises of competitors, namely:

  • Primary
  • Secondary
  • Potential
Primary Competitors

These constitute market leaders who presently dominate your industry. Normally, while seeking new clients, you will repeatedly encounter your primary competitors.    

Indirect (Secondary) Competitors

Your indirect competitors generally share the same target market with you. These competitors may not however directly stand up against you.  

Potential Competitors

Within this category are competitors who could move into your market. You need to be prepared to face up to your potential competitors.

Scrutinizing Competitor Flaws and Strengths

You need to focus on both real and perceived vulnerabilities and strengths. This is because perception usually supersedes reality with regard to customer assessment. Factors to consider include:

  • Price
  • Value
  • Service
  • Location
  • Reputation
  • Expertise
  • Convenience
  • Personnel
  • Advertising/marketing
Recommended Steps

While evaluating your competitors’ susceptibilities and strengths, you could go by the below steps.

  • Enumerate every competitor
  • Place their respective vulnerabilities and strengths against each name
  • Rate your competitors    

Investigating Opportunities and Threats

Basically, opportunities and threats denote factors outside your competitors’ control. Your competitive analysis needs to explore how your competitors can handle the threats and opportunities.  These include:

  • Technological improvements
  • Legal or regulatory action
  • Financial factors
  • Potential new competitors
Suggested Plan

While exploring your competitors’ ability to tackle threats and opportunities, you could follow the below steps:

  • List each competitor
  • Enumerate the external factors that could affect your industry
  • Study your competitors’ threat and opportunity handling capabilities

Establishing your Business’ Place 

Determining your business’ position basically entails establishing where to locate your business based on competitors’ respective positions.

Proposed Process  

You could follow certain steps while defining your business’ position. These processes include: 

  • Analysing your business for threats, opportunities, weaknesses and strengths
  • Categorising your business alongside your competitors 
Purpose

The above categorisation offers you several benefits, including:

  • Pinpointing your business’ position within the competitive environment
  • Showing areas for improvement   
  • Demonstrating your business’ qualities that you could capitalise on so as to attract additional clients

Competitive analysis, a marketing strategy technique, helps you to analyse your business’ competitors’ weaknesses and strengths on a constant basis. Essentially, this market analysis approach helps you to identify your competitors and to study their activities. During this process, you scrutinise your competitors’ service and product offerings, prices, as well as perceived and real value to customers.  This business intelligence process helps you to spot opportunities that you can take advantage of.  You also become able to detect and correct mistakes in your business model or concept. These, among other competitive strategies, help you to stay on top of your competitors.

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