The analysis of competition consists of the analysis of the capabilities, resources, strategies, competitive advantages, strengths, weaknesses and other characteristics of the current and potential competitors of a company or business, in order to be able, based on this analysis, Make decisions or design strategies that allow them to compete with them in the best possible way.
The analysis of competition not only allows us to be aware of the new movements or actions carried out by our competitors, but also to take advantage of their shortcomings or weaknesses, block or face their virtues or strengths, and take as reference their products or strategies that They are giving good results.
It is often thought that the analysis of competition is a complex task that requires an exhaustive investigation of our competitors and that it is advisable to hire the services of a market research company to do it for us; But the truth is that the analysis of competition is something as simple as visiting the premises of our competitors and take note of their processes, or visit their websites and find out about their products.
In order to perform the analysis of the competition, we must first gather all the information that is relevant or necessary about our competitors, whether they are companies that sell products similar to ours (direct competitors), or companies that sell substitute products To ours (indirect competitors).
To know what information about our competitors we must collect, we could ask ourselves the following questions:
-Who are our competitors
-Who are the leaders or the principals.
-where they are located.
-What are their markets.
-What is your sales volume.
-What is your market share.
-What is your experience in the market.
-What are their resources.
-What is their capacity of production or supply.
-What are your main strategies.
-What materials or inputs they use for their products.
-What are their prices
-What advertising media they use.
-What are their channels or points of sale.
-What are their competitive advantages.
-What are your strengths and weaknesses.
To collect this information about our competitors, it is usual to use the observation technique and, for example, visit their premises to observe and take note of their processes, the performance of their personnel, their customer service, products or services Prices, decoration, etc., visit the markets or shopping centers where their products or services are offered, and observe their characteristics and the public’s reaction to them, or acquire their products or test their services in order to analyze them best.
Another common way of collecting competition information is to conduct interviews or informal surveys with your current or former workers where we ask them, for example, about their strengths and weaknesses, or their clients where we ask them, for example, why They prefer them before they do, or what words they associate with or come to mind whenever they hear their name or brand.
And another effective and simple way commonly used today is to search for information about them on the Internet, for example, reviewing the information published on their websites, reviewing their participation in social networks especially on their Facebook pages, or reading comments or The reviews that consumers make about them.
After collecting the information about our competitors, the next step is to analyze it, for which we could help us draw up tables where we include our main competitors along with the valuation we give to different factors such as innovation, attention To the customer, points of sale, etc.
And after analyzing the information collected, we proceed to make decisions or design strategies that allow us to take advantage of the opportunities or to face the threats found in the analysis that we have made or in the conclusions that we could have come from this one.
For example, if in our analysis we find that our competitors can not keep their prices low because of their high operating costs or because we are producers like ourselves, we could make the decision to reduce our prices in order to block them and win them market.
If we find that the inputs they use for their products are not of good quality and that the design of their products is one of their main weaknesses, we could make the decision to improve the quality of our inputs and focus on the design of our products with the In order to give our products a greater value than theirs.
If we find that a market is not being consider by them despite being an attractive market, we could make the decision to point to that market or, in any case, if we find that in a market they are not doing well and not We know exactly the cause of it, make the decision to avoid that market.
Or, if we find that one of your advertising strategies (for example, one that involves the use of the Internet and social networks as a means of promotion), is giving them good results, we could take that strategy as a reference and adopt it to our business or , In any case, if we find that they still use an advertising strategy even though it does not give them good results, make the decision to avoid it.
Finally, it should be pointed out that the analysis of competition is usually done only when starting a new business or entering a new market; However, in today’s competitive world, where companies are constantly launching new products to the market and where more and more competing companies appear, competition analysis should not be a one-off task and then we forget But a task that we constantly carry out.
Likewise, the analysis of competition should not only involve carrying out the process previously described, but also be always attentive to the movements, actions or strategies that our competitors perform (for example, the launch of new products or new advertising campaigns), as well Such as trying to anticipate such movements, actions or strategies, and anticipate them.