A competitor analysis is a type of organizational assessment that helps determine how a company’s products compare to the offerings of its competitors. In general, competitor analysis is important to any organization because it gives the business access to relevant information about competitors, such as their strengths and weaknesses, in order to make decisions about how their own business can stay competitive.
In today’s post we’ll talk about what a competitor analysis actually does and why it’s important for profitable growth in any organization. The remainder of the post will take a closer look at some specific elements that may be included in a competitor analysis report.
What does competitor analysis do?
Organizational assessments have a variety of benefits in business, but perhaps the most widely-known is that they help a company understand its strengths and weaknesses when compared to competitors. A competitor analysis can also help a business to identify its target audience and examine how customers identify with the products or services offered by the business. It’s also important for a competitor analysis report to examine how customers interact with the company, especially when it comes to changing trends in technology or how users communicate with one another online. A competitor analysis report may also include interviews from current customers of the company in order to identify overall flaws or issues that could be improved upon.
A competitor analysis report can also help an organization be aware of how it is viewed by its competitors. A competitor analysis report can be used as a benchmark for the company to compare itself to its competitors as well as to analyze how it is viewed in the marketplace. Some common research tools that could be included in a competitor analysis report include online reviews, media coverage, and user surveys.
Why is competitor analysis important?
A competitor analysis serves a number of purposes for any company, but perhaps the most important use for a business is setting goals and creating a strategic plan based on what potential customers want from the company’s products or services. A competitor analysis can also be helpful for a company in avoiding costly mistakes that could be caused by a competitor with a stronger market position. It can also help a company to stay ahead of its competitors and anticipate future trends and customer demands.
Competitor analysis report elements
A competitor analysis report will vary depending on the type of industry, but there are some elements that are common across all analyses. A competitor analysis may include an examination of existing products, services, revenue streams, and cost structures. It’s important for a business to review key competitors (those who pose the greatest threat) and determine how the company stacks up against them when it comes to specific areas such as market share or price point. A competitor analysis report may also include popular metrics that are used to compare these factors, such as assets or market share.
A competitor analysis is also valuable for helping an organization identify its short-term and long-term goals, especially when it comes to developing marketing campaigns or deciding what types of new technologies to develop. When choosing which competitors to study in the analysis, it’s important to pick competitors who pose a threat to the business so that it can stay competitive. For larger organizations that have access to more research tools, an in-depth competitor analysis can include information about smaller businesses that are “up and coming” in order to see if they represent a significant threat in the future.
Why do some companies choose to outsource competitors analysis?
In some cases, a company may find it more cost-effective to have a third party conduct a competitor analysis rather than doing it themselves. There are many professional services that specialize in competitor analysis, including larger consulting firms that offer unique services such as being able to offer custom research for competitive analyses. In addition, having a professional conduct the assessment may be the most efficient way for an organization to handle this type of research as companies may not have the specialized expertise required to complete the assessment properly. In most cases, though, a company can save time and money by hiring someone from within its own organization to complete the competitors analysis on its behalf.
A competitor analysis is an important part of any management strategy that helps organizations to understand how they stack up when compared to competitors. By having a thorough competitor analysis, a business can set goals and create a strategic plan based on its strengths and weaknesses. Major companies such as IBM, Microsoft, and Intel all use competitor analyses in order to ensure their strategies are effective in staying competitive. As you can see from the information above, outsourcing a competitor analysis might be an option for smaller or mid-sized businesses that may not have the internal resources or expertise to complete the studies themselves.