How to Create a Competitive Market Analysis
A competitive analysis is a structural approach to the competition in your industry. Many business owners conduct basic research into their competition before they start a business. Its often an integral part of a marketing and business plan.
However, competition doesnt just go away once you start your business. Its important to stay on top of what your competition is doing. Its the best way to stay ahead of them. Additionally, if you conduct an in-depth competitive analysis prior to starting your business, youll be better positioned for success. Lets take a look at how to create a competitive market analysis.
Find Your Tool of Choice
There are many free online tools you can use to organize your information. The best tool to use is the one thats easiest for you to work with. For example, if you enjoy using mind mapping tools then use a mind map to organize your research. If you are comfortable with spreadsheets then use spreadsheets. Flow charts and analytics and reporting software are also good choices.
Make a List
Begin by segmenting your market. Divide your market into workable segments based on demographics like region or customer income level. Youll also want to prioritize the list of competitors based on the ones that are more direct competition.
Begin Gathering Information
There are many ways to gather information on your competition. Visit keyword research sites to uncover the keywords theyre optimizing their site for. If the companies are public, you can find financial information online. Research each competitor online using all resources available to you.
Shop the Competition
Visit your competitions websites and peruse it as a customer, not a competitor. Analyze the navigation, benefits, and buying process. Take notes. What do they do well? Where are they weak? What weaknesses can you capitalize on to better serve the market?
Once youve collected the necessary information on each competitor, create metrics to compare and evaluate them. This will help you create an overall picture of your competition and show you quickly and easily how you can frame your own business.
Its important to know that you can seek outside help with your competitive market analysis. There are professionals and services you can hire to give you a complete picture of your competition. You can also outsource a portion of the data collection. For example, you can pay a company to research specific information about a company.
However, with a little time and organization you can uncover the same information yourself. The next step, once youve gathered the data, is to use it to your advantage. Compare the strengths and weaknesses of your competition and use it to establish your own business practices and policies.