What Is a Competitive Analysis?
The purpose of conducting this type of analysis is to help you gain information against competitors that are in the same industry as your business. Think of it as the framework for helping you build all of the marketing strategies and business plans to gain a competitive edge. So whether you're running a restaurant, hotel, or even a retail store, know that you're sure to gain nothing but benefits after doing a competitive analysis.
How to Conduct a Competitive Analysis?
1. Make a List of Your Competitors
It is very important that you start with listing down the businesses that you consider as viable threats to yours. Take note of those who have established themselves in the industry and any startups that you think have the potential to succeed. Create a list by writing down the names of these companies or small businesses and place them in an order that will tell you which ones should be highly prioritized during the analysis process. Pick the top 3 or top 5 out of everyone to narrow down who you have to assess.
2. Assess Your Own Business and the Industry It's In
Before you start learning about your competition, you will have to access your own business and the industry itself. Take note of what your goals are and whether or not you're any close to achieving them. You'll also want to check the different factors, such as sales figures or customer satisfaction, that will tell you if you're heading towards success. As for the industry itself, check if there's any more room for growth as it's possible you're entering a market or are already in one that has little to no opportunities left.
3. Do a SWOT Analysis on Your Competition
A SWOT analysis will tell you about your competitors' strengths and weaknesses, as well as the areas of opportunities they're taking advantage of and the threats they need to deal with. Gaining this information will give you an idea as to how they are able to maintain their success within the industry. This will also tell you if important things such as what areas of opportunities they have yet to capitalize on or what weaknesses you have that are similar to theirs that need to be fixed.
4. Use the Results
When you are done collecting all of the data, then you'll want to use all of it to make important business-related decisions. Based on what you have managed to uncover about the competition, formulate strategies that can benefit your business and help it continue towards the path to success. What you manage to learn can help see strengths you didn't realize your business had, weaknesses that you have to fix immediately, and opportunities that your competition hasn't taken that you may be able to.
5. Utilize Microsoft Word
This is one of the most common programs to use when making any kind of analysis document. That's because it's very user-friendly to the point where you simply have to input what you've gathered and use the available tools to make it look organized and professional. Make sure to use business fonts such as Arial or Times New Roman and the appropriate font size so that whatever your analysis document contains is easy to read and understand.