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How to make competitors help your business

One of the most important aspects of defining your business strategy is to understand your competitors, however this process is often allotted little time by many businesses. We recommend going beyond the standard SWOT and PESTLE. You need to understand your competitor’s communication strategies, their brand personality and their unique selling propositions; and then design your own strategy from the insights you gain.

If your product or service is doing well (or has just been recently launched and you think it’s going to do well), why do a competitor analysis? Because, primarily, analysing the market and the players will help you to:

  • Formulate a unique selling proposition for your business
  • Find a differentiator for your product and/or service
  • Address your target audience’s needs more efficiently
  • Position your brand distinctively
  • Develop your communication strategy
  • Understand the latest trends and to stay ahead
  • Find opportunities to innovate

Businesses are regarded as competitors when you compete with them for market share, they sell products or offer services that are similar to yours or offer products and services that could be used as substitutes to yours. For example, competitors to Baskin Robbins are Cold Stone and Haagen-Dazs, as well as vendors like cakesonline.com, which sells customisable ice cream cakes.

You need to consider competitors with a physical presence as well as those online. You need to go beyond your local market, your category and your industry. Competitors are selling their products/services globally, they are entering markets in which they were previously nonexistent, and it could be yours. You compete not only with local stores on your street but also with globally established giants. Look around and you will find more than you think.

For example, in a street jam-packed with restaurants and fast food outlets, you want to be the specialised ice cream parlour. You want to have your own distinct style and identity that will lure customers away from the brands they’ve been loyal to for years. In order to do this, you need to know what other restaurants offer ice cream near you, what flavours they offer, and if they have a separate special dessert menu. You need to know who the best ice cream vendors are globally, and what gives them their edge. Is it the flavour? Their range? The cone or cups? Or is it their special offers, promotions, discounts or engaging activations? Is it their sugar-free or healthy options? The in-store environment?

The way their staff serves you?

Trying to figure out what your competitors are offering can seem daunting. It’s helpful to categorise the questions you need to ask and the answers you need to extract about your competitors. Here’s a quick guide to some of the most important questions you need to ask:

Market Positioning

  • What is their USP (Unique Selling Proposition)?
  • What are the strengths and weaknesses of their communication?
  • How do they position themselves in the market, compared to the other brands?

Brand Identity

  • What do their brand name and logo communicate?
  • What is their tone of voice?
  • What is their brand promise to the market?

Website Interface and Social Media

  • What do their website colors and elements say about their brand?
  • Do they have a blog? If so, how often do they post and what type of content?
  • Do they have social media accounts? How is their engagement? Are they active and regularly updated?

Customer Experience and Problem Solving

  • What services/products do they offer?
  • What is their price point?
  • Are customers more likely to choose them due to pricing or experience?
  • How quick is their response rate on various platforms?

This may seem like a lot of time and effort, however, it is a worthwhile exercise that will reap great rewards. It will not only enable you to identify gaps in the market which could inform your positioning, but is also likely to unearth a pattern of the best practices that you can leverage. You will be able to track market trends, to forecast likely changes and to be prepared. You will gain insights into the behaviours of your customers and why they make the choices they do. If you want to be ahead of the curve, you need to start with gaining a well-rounded view of your competitors. Without it, you’re simply poking in the dark, and hoping that your service or product is different enough from your competitors.

There are plenty of guides on the web to get you started, like this one. Look around and you’ll get into the process.

Let us know what you find.

 

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