How much do you know about your competition? You probably know who they are and you have looked at their websites. Perhaps you have even met them a few times at conferences. You need more than this. You need to research you competition to build a profile of their strengths, weaknesses, successes, and failures so you can find opportunities to grow your own business.
Learning about you competition and creating a detailed profile of them will help you learn from them and differentiate your business from them. The first thing to do is identify your competition. Your competition may be more than other local businesses. The internet has made it possible to have competition from anywhere in the world. Identifying your competition takes a little creativity. Search for your product or service and see what related results come up. Ask customers about other companies they are considering. Attend trade shows, conferences and review industry listings.
Once you have developed a list of your competitors, you will want to determine key information about them. Some questions you might try to answer include:
- Do you compete with them directly or indirectly?
- How could they threaten you?
- What do your customers think about them?
- Who are their main customers?
- What are their strengths? Weaknesses?
- What reputation, both positive and negative, do they have (e.g, great customer service, fast delivery, etc.)?
- Where are they located? Do they have any geographic advantages?
- What resources do they have that you do not?
- Are they bigger? Do they have more cash reserves? Do they have partnerships?
- How are their products or services different/better/worse than yours?
These are just a few questions to get you started. This list can get much longer, and it should. As you research your competition you inevitably start asking more and deeper questions about them.
Many of these questions can be researched and answered through readily available resources.
- Their website
- Their marketing materials (brochures, etc.)
- Their annual reports
- Their press releases
- Third party rating sites (BBB, Chamber of Commerce, trade groups, etc.)
- Industry groups
- News reports
Gather all of this information together and compile a profile for each competitor. You should regularly review this and update it with current information.
Finally, evaluate your business against your competition. It is important to be honest about your responses. Consider key factors, like products and services, quality, customer service, finances, and so on. How do you compare? This will help you determine areas where you can improve, areas you excel at and can exploit, and areas for opportunity. You will also gain insight into how they have done business and are doing business to learn new techniques and avoid pitfalls they may have made.
Fully understanding your competition will give you a clear understanding of your own business’s strengths and weaknesses in relation to your competition. This will help you improve and strengthen your business. This information is invaluable in improving your effectiveness in the marketplace and finding new opportunities to exploit.