Measure performance and set targets
Competitor analysis or competitive intelligence is a strategic assessment of the strengths and weaknesses of rival businesses. It is a key tactic for finding out what your competitors are doing and the level of risk they pose to your business. Such analysis involves collecting publicly available information through things like market research, financial filings, online databases, press coverage, market reports or benchmarking data.
Importance of competitor analysis
Competitive analysis can help you:
- understand the marketplace conditions in your industry
- refine your business strategic direction
- spot gaps in the market
- spot opportunities for differentiating your products and services
- analyse competitor's product development initiatives
The type of competitor information that you may find useful depends on the type of your business and the market you're operating in. Ideally, your analysis will answer questions on:
- who are your competitors
- what they offer
- how they price their products
- how the profile and numbers of their customers compare to yours
- what their competitive advantages and disadvantages are compared with yours
- how they may react to your market entry, product or price changes, etc
You will probably find it useful to benchmark your business performance and evaluate strengths, weaknesses, opportunities and threats to your business - this is known as SWOT analysis. This will show you how you are doing in relation to the market in general and specifically your closest competitors.
How to gather competitive intelligence
There are three main ways to find out more about your competitors:
- What they say about themselves - sales literature, advertisements, press releases, shared suppliers, exhibitions, websites, competitor visits, company accounts.
- What other people say about them - your salespeople, customers, local directories, the internet, newspapers, analysts' reports, market research companies.
- Publicly available business information - eg trade or sector bodies, or enterprise agencies may have some information available.
- Commissioned market research - you can contract a commercial company or commission specific market research via an organisation such as the Market Research Society.
Business in Northern Ireland may get help from Invest Northern Ireland with researching competitors and markets.