101: Sizing up the competition
What are you up against? It's crucial information for any business to look at before it develops a business strategy. By knowing what obstacles you may have to overcome — in advance — by those who are cutting into your market share, you can be proactive, plan accordingly and have a more comprehensive perspective on your company and industry.
Here are three ways to analyze your competition:
Create a competitive strength grid. List all the key assets and skills in your industry or market down the left margin of a piece of paper or spreadsheet. Then — Entrepreneur.com recommends — create a column of strengths and weaknesses. In each asset or skill category, note how your competitors rate in that area. Here is where your distinct competitive advantage emerges; then “you need to communicate them in a strategic form that will attract market share as well as defend it,” Entrepreneur.com says.
Look at your company's strengths and weaknesses. “What aspects of the company's operation convey an advantage in the marketplace? Is your sales force composed of bright, ambitious individuals? Does your company have an advanced inventory management system in place? Do you have an employee with a talent for advertising and/or marketing?” ReferenceForBusiness.com suggests asking yourself these questions and others, as well as analyzing your physical location and customer needs and wants.
Foster competitive intelligence. Companies should also know the trends and dynamics of the marketplace and gather information on demand, supply and how competitors handle these demands, according to BusinessKnowledgeSource.com. This data can come from your competitors' websites, marketing materials, onsite visits, or by talking to company representatives or customers. Among the important information: “What audience they target, the different prices they offer, their guarantees, their hours of operation, any delivery options and so on, how they position their own brand, as well as … their competitive advantage.” n
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