Creating a competitive analysis is an integral part of business planning. It allows you to take a close look at your competitors to see where your company fits within the marketplace. There are five basic steps to writing an analysis that will help you situate yourself competitively within your industry. It is important to be objective and conduct thorough research into both the competition and your industry.
Create a list and complete research on your top competitors. While you may think that your product or service is unique, consumers will always find a similar product or a replacement to what you are offering. Conduct a thorough search. Categorize your competitors into direct (offer same product/service) and indirect (similar or replacement product/service) competition.
Conduct in-depth research into each competitor’s company. You should review the products and services that they offer, look at their advertising strategies and consider their target markets. Company websites and testimonials are a great place to start your research.
Create a list of each competitor’s strengths and weaknesses within the industry. This will assist you in identifying their competitive advantage, as well as with creating comparisons between all competitors including your own business. Remember to be objective and to avoid bias, especially when identifying weaknesses.
Research each competitor’s current and future goals and objectives. This will help you see where your competition is headed. With this information you can start to plan your own objectives and strategies for the future and stay up-to-date on how to be best-in-class within your marketplace.
Investigate the past, current and future trends within your industry. This will help you with future planning related to products and services, target markets and consumers, and even geographical areas to target.
Once you have gathered this knowledge and research, you will be able to write a comprehensive competitive analysis. It will assist you in your business planning and increase your knowledge of the marketplace. This knowledge can be put into practice, and you will be known as an expert within your industry. The Internet can be a powerful tool, but remember not everything you read is true. Be sure to find reliable and accurate resources to assist you in your research!
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