How to do Competitor Analysis when Starting Your own Business
30 June 2010
One of the biggest factors in failing businesses is undoubtedly the stiff competition out there. Far too often, people assume they have an original and winning idea and leap right into their businesses completely unaware of the competition. They then find themselves up against the wall, as their efforts continuously fall short of the competitors who are already established. You can easily get around this by performing a proper analysis of your competitors before entering into the business arena. This way, if there is still competition out there, you'll know exactly how and why to tweak your ideas so that you find an untapped
niche market. Any competitor analysis you do will start and end with your willingness to do some research. This isn't something you want to outsource or trust to instinct. You need to become part of the market and find out exactly what's going on around every corner. If you miss something or choose to take something lightly, it could easily come back and bite you.
One of the first ways to complete a competitor analysis before you step into the business world is to become a customer. It might sound trite, but you need to know exactly what's going on with your competition. Open a typing program or bring along a paper and pencil and take some notes. You don't want to pretend, either; you really want to become a customer.Buy something from your competition see how their product compares to yours, take note of the customer service, return policy, customer reactions, and other aspects. Pay attention to how they conduct business and to what keywords and phrases they use. Use this information to your advantage in order to separate yourself from the pack. Dig a little deeper and find out who's running the business. This is your next step in analysis. You do not have to get overly technical in order to paint a proper picture of your competition, but you do have to immerse yourself in that world and find out who's calling the shots and what other types of businesses they're running.Find out who they are as people if at all possible. This will help you to gain insight as to how their business minds work. Eventually, you'll be trying to rise above your competition, so it helps if you know what they're made of when it comes time to leave them in the dust. Pay attention to your competitions customers. See what they're saying on message boards, review sites and elsewhere around the web about your competitions' products and services. This keen insight will allow you to enter the game doing things better than an existing business. This will score big points with customers looking for a better experience. Check out the market in general and see how it's trending. Are more people looking for the same types of products, or are sales on the decline? You can find this out easily by running a keyword analysis to find out which phrases people are searching. This gives you time to switch things round if it's not working, and time to bear down on the task if the market's still hot. Use whatever you learn to your upmost advantage and always work to be one step ahead of the competition.
