Competitive Analysis for Entrepreneurs in 2018

In the fast-paced world of entrepreneurship, understanding your competition is critical to success. A thorough competitive analysis can provide valuable insights into your industry, highlight opportunities for growth, and help you craft strategies to gain a competitive edge. Here’s a comprehensive guide to conducting competitive analysis for entrepreneurs in 2018.

1. Identify Your Competitors

The first step in any competitive analysis is to identify who your competitors are. There are two main types of competitors to consider:

• Direct Competitors: These are businesses offering the same or very similar products or services as you. For example, if you run a coffee shop, other local coffee shops are your direct competitors.
• Indirect Competitors: These are businesses offering different products or services that can fulfill the same need. For instance, a bakery that serves coffee would be an indirect competitor to your coffee shop.

To identify your competitors, start by conducting a simple online search using keywords related to your business. Check industry reports, customer reviews, and social media mentions. Tools like Google Alerts and social listening platforms can also help you stay updated on your competitors’ activities.

2. Analyze Competitor Strengths and Weaknesses

Once you have a list of competitors, analyze their strengths and weaknesses. This will help you understand what they do well and where they fall short. Here are some key areas to consider:

• Product or Service Quality: Evaluate the quality of your competitors’ offerings. What features or benefits do they highlight? How do they differentiate their products or services?
• Pricing Strategy: Compare your competitors’ pricing with yours. Are they positioning themselves as premium or budget options? How do they justify their pricing to customers?
• Customer Experience: Look at customer reviews and feedback. How do customers perceive their service? What do they praise or criticize?
• Marketing and Branding: Assess their marketing strategies and brand positioning. What channels do they use to reach customers? What messaging and imagery do they use in their branding?

Conducting a SWOT analysis (Strengths, Weaknesses, Opportunities, Threats) for each competitor can be a helpful framework for organizing your findings.

3. Understand Market Position and Share

Understanding where your competitors stand in the market is crucial. Determine their market position and share to gauge their influence and reach. Here’s how:

• Market Share: Estimate the market share of your competitors by looking at their sales data, number of customers, and geographical reach. Industry reports and market research firms can provide valuable data.
• Customer Demographics: Identify the target demographics of your competitors. Who are their primary customers? Are there underserved segments that you could target?
• Geographic Reach: Analyze the geographic reach of your competitors. Are they local, regional, national, or international players? This can help you identify potential markets for expansion.

4. Monitor Competitor Strategies

Keeping an eye on your competitors’ strategies can give you insights into industry trends and potential threats. Here are some ways to monitor your competitors:

• Social Media: Follow your competitors on social media platforms. Pay attention to their posts, engagement levels, and customer interactions. Tools like Hootsuite and Sprout Social can help you track social media activity.
• Email Newsletters: Subscribe to your competitors’ email newsletters. This can give you a glimpse into their content strategy, promotions, and customer communication.
• Press Releases and News: Monitor press releases and news articles about your competitors. This can help you stay informed about their latest initiatives, partnerships, and product launches.
• Website and Blog: Regularly visit your competitors’ websites and blogs. Analyze their content, layout, and user experience. Tools like SimilarWeb can provide insights into their website traffic and performance.

5. Identify Opportunities and Threats

Based on your competitive analysis, identify opportunities and threats in the market. Here’s how to use this information:

• Opportunities: Look for gaps in the market that your competitors are not addressing. This could be an underserved customer segment, a need for higher quality products, or a demand for better customer service. These opportunities can guide your product development, marketing strategies, and business expansion.
• Threats: Identify potential threats posed by your competitors. This could be a new product launch, a price reduction, or an aggressive marketing campaign. Being aware of these threats can help you prepare and respond proactively.

Conclusion

Conducting a thorough competitive analysis is essential for entrepreneurs looking to succeed in 2018. By identifying your competitors, analyzing their strengths and weaknesses, understanding their market position, monitoring their strategies, and identifying opportunities and threats, you can develop informed strategies to stay ahead in the competitive landscape. Remember, the goal is not just to understand your competition but to use these insights to innovate and differentiate your business.