Why is Competitor Analysis Important?

February 1, 2021 Adlab

It’s easy to get caught in our own bubble when operating a business,  we look at our internal systems and ignore the dynamic marketplace in which we exist. Stepping back from your business and looking at your competitors can give a new point of view and new insights.

By undertaking a competitor analysis, you are looking at why one business might be more successful and aiming to identify areas where your business could improve, as well as discovering possible gaps in the market on which you might focus your efforts.

Strengths and weaknesses

Start on the surface by identifying your direct competitors and looking at what they are doing. Was it easy to find them? Is their website fast, easy to use and visually appealing? Is it responsive and helpful? Are they active and effective on social media? What is their Google rating? Is their marketing consistent and engaging?

Next, take it a step further. Explore their marketing approach, sales process, pricing, reach of their products/services, how and where they are present, their content strategy, the engagement they are getting and what their customers are saying.

It is also worth considering how you feel when reviewing a competitor’s elements. Is it a straightforward and pleasant experience? Or were you frustrated and having to clicking through several pages before finding what you wanted? Your experience is what potential customers are feeling too so you want to use this information as part of your analysis.

Consider the information you have gathered and look at all the areas where your competitors are doing well. Is their marketing enticing? Are their customers reporting a great experience when dealing with them? Then look at your competitors’ weaknesses and pinpoint areas where they could do better. What is their biggest weakness? Does their feedback indicate any one area in which they could improve?

Opportunities and threats

Now it is time to take an objective look at these competitors and see where they could improve, as well as reviewing where they currently have the edge over your business. Do they have a popular product or service that your business is lacking? Are they talking about upcoming industry changes that you are unaware of? Are they restricted in a way that you are not? Quite often there will be a few standout elements – both positive and negative – identified in your analysis. It is rare for one business to be doing everything exceptionally well.

Learning about where other businesses are deficient will help you to identify potential gaps in the market and therefore opportunities for your business. By the same token, understanding what they are doing well will give you some insight into market expectations and behaviour, highlighting ways in which you could improve your services.

Make better business decisions

The information you gather can then be used as a comparison tool against your business. First, review your own business in the same way you reviewed aspects of your competitors. This will give you a base from which to make your comparisons. Now, measure individual elements from other businesses against the same aspects of your own business. How do you compare? Are there things you are doing better? Where are you lacking compared with your competitors?

By making these comparisons, you will have a clearer picture of any changes you need to make to position yourself at the top of your industry. It will also help to guide the future decision-making process as you will know exactly what you need to do to be successful. If you take the time to go through this process, you will be on your way to improved operations and overcoming any challenges you might face.

If a competitor you reviewed has a great look and feel to their services, their website and social media presence are spot on, the user experience is exceptional and they present a consistent message and tone throughout, it could be that they use an advertising agency – like Adlab! We produce and manage all aspects of business including branding and asset generation, website design and management and social media campaigns. We bring experience and expertise to our work to help you get the professional advantage. Get in touch or come in and see us and you will be well on your way to being the business that makes others turn green!

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