In today’s competitive trade, you’ll need to have everything in your arsenal. This includes getting to know your business competitors’ strengths and weaknesses. Get tips on how you can gather information about your rivals. Read on.
In 2020, there are about 31.7 million small businesses in the US. You may not be competing against all of them, but you are competing in a highly saturated market. And in a crowded marketplace, getting your target customer’s attention will not be easy. However, strategic planning can make it easier.
In order to get ahead of the race, competitors consistently keep a close eye on each other. There’s a good reason why brands become household names, they offer something their competitors don’t.
So, how well do you know your business competitors?
Like the saying goes; keep your friends close and your enemies closer. The more you’re aware of how your rivals are moving, the likelier it is you can counter them effectively. Keeping a close eye on the competition helps you strategize your plans for growth.
Without further ado, let’s dive deeper into the concept of business competition.
Understanding Business Competition
Competition is a natural part of the business. Some of the most entertaining tiffs have gone on for years. Famous brands like Pepsi and Coca-Cola have had their not-so-subtle warfare for decades.
They’ve contested countless marketing schemes, loyalty programs, and social media gimmicks. On the tech side, you’ve also got Apple and Microsoft taking shots at each other since the ’80s.
It’s safe to say that there are several brands competing in every industry. But the great thing about them competing is that they’re all establishing their names in the process.
An important thing to know about business competition is that it’s meant to produce a positive outcome for businesses. Contrary to the common belief that it’s bad news for startups, competition is actually healthy for the economy, the consumers, and for the businesses themselves.
For one, it’s good for the consumers since it keeps brands accountable for the quality of their products. Business competitors are racing towards the market’s approval; hence, they’ll have to produce the best versions of their products.
This, in turn, drives innovation in brands, spurring the creation of newer and more improved items. Competition has led many companies to come up with low-cost manufacturing processes, which became their edge over time.
Competitive Insights: Knowing your Business Competitors
Doing competitive analysis helps you get a feel of the competitive landscape. It gives you an idea of the market’s current needs, your competitor’s strategies, and the latest trends in the industry.
This helps you strategize better in scaling your operations. Having a comprehensive and detailed report will allow you to make optimum decisions that will work for your business and consumers.
Learn who your rivals are
You don’t go into battle without knowing who your opponents are. The first step is to identify who exactly are the potential threats to your success. You don’t just name random shops that are seemingly similar to yours. They have to fall under specific categories to be declared as real competitors.
Your business competitors are companies that offer a similar form of service or product. They can be in a similar stage to yours. If you’re a fairly new startup, you’re often competing with stores that are also just introducing themselves. However, if you’ve been in the industry for years, you’ll be looking at establishments that also have a similar timeline.
These companies would also be targeting the same consumers you are. You can play it to your advantage by simply asking your patrons about companies offering them similar services.
There are many methods you can use to name competitors. For one, the Internet is a great starting point. Search Amazon for products similar to yours and you’ll find business competitors easily.
Other sources to look into:
- Local directories
- Publication ads
- Online listings
- Business conferences or seminars
- Surveys and questionnaires
Get to know them
Once you’ve identified who your business competitors are, it’s time to get to know them. Take a stroll in the open market. Visit the physical stores to get a feel of how they do business.
Becoming a customer will help you gain a new perspective on your competitors. Observe how they interact and serve people. You may just end up learning a new customer service strategy in the process.
Likewise, you can also visit your competitor’s website and social media platforms. This will allow you to observe their marketing behavior and gain insights into their engagement strategy. Purchasing from their online store will give you an idea of how they incentivize purchases and upsell their products.
Observe their staff
Another important thing to note is the type of people your competitors hire. Are they made up of experienced clerks? Are there many interns? Learn how they manage their employees; what posts are assigned to them, how are they trained, what their hours are like, etc.
Interacting with the staff will help you learn what may also work for your services. Keep a lookout for protocols and service techniques you can implement in your own operations.
Compare your Budget
Learn how your business competitor is doing financially. This is an excellent benchmark strategy to determine their rank in the competition. Take note of details like their gross, operation, and net profit margins.
These are often available through platforms like the Internal Revenue Service, the US Census Bureau, and the Bureau of Labor Statistics. If you can’t find data, you can try searching in the business library or through industry associations.
Keep in mind that you are also competing in hiring and retaining people. So, if your competitors are actively expanding, learn how much they are offering in salary and compensation. This will allow you to strategize accordingly to recruit and keep employees.
Perform SWOT analysis
Lastly, do a SWOT (Strengths, Weaknesses, Opportunities, Threats) analysis on your competitors. A SWOT analysis helps you identify both the positive and negative attributes, as well as the potential for growth.
This formalizes your data into written records which you can use as references in the future. An organized report on competitors will make business planning more efficient.
SWOT analysis is a large-scale data-gathering project. Take your time in collecting information from different sources. Make use of your competitor’s corporate website, their media materials, and even Government records. Be resourceful and creative in this area. There are already several data analytic tools you can use to gather and interpret insights.
Ultimately, gathering information about your competitors is only the first step. The more crucial part is strategizing based on your business goals and needs. You have to adjust your operations as you see fit.
Don’t just randomly increase profit margins or change pricing to chase your competitors. You have to be mindful of the changes you’ll make since these will heavily affect the outcome. If you aren’t confident with your business strategy, you can always enlist the help of professionals.
Get ahead with Full Scale
If you’re looking to get ahead of the competition, consider scaling your business. Full Scale is an outsourcing software development company that specializes in helping startups grow.
We offer a wide array of startup services such as recruitment, website creation, marketing, and data analytics. We can assemble a dedicated team of experts to meet your project requirements. Let us help you reach your goals faster.
Talk to us today!