The world of business is a very dynamic and competitive arena. With the rise in modern technology and an endless drive to be the best, it is becoming increasingly difficult for businesses to keep ahead of their competitors. Distinguishing ourselves from the competition is now a constant realism for many business owners and this includes competitor analysis.

If ignorant both of your enemy and of yourself, you are certain in every battle to be in peril. (Sun Tzu)

As Sun Tzu points out if we don’t conduct competitor analysis then will indeed be ignorant of our competitors and this could be damaging to the business. By knowing our competitors then we can learn and grow so that we can be competitive. Being competitive means that we can also encourage business growth which is possibly the most important objective of any organisation.

Is Competitor Intelligence Frowned Upon?

Not at all, it is a common business practice which adds value to any organisation. There are no underhanded tactics involved and it is more about conducting a focused analysis of a competitor or competitors. This is why it is important to choose the right supplier to assist with your competitor analysis. Having the experience, knowledge and tools to conduct a thorough analysis is key. At the same time, having flexible project-based support means that you can keep costs low and ensure a professional focus on competitor analysis.

It is widely accepted that more businesses would undertake this business practice if they had the knowledge to do it and more importantly if they had the time to conduct the information collection, analysis and the time taken to understand the results. Clearly, many SMEs do not have the time or the experience to conduct a thorough and beneficial competitor analysis and this is how Kent Project Consultants can add value.

Competitive strategy involves positioning a business to maximise the value of the capabilities that distinguish it from its competitors. (Michael E Porter, 2004)

There are many elements to conducting a competitor strategy analysis and this includes many questions that need to be answered. It is clear that there may be some level of ‘I already know my competitor’ or ‘I know enough about them and they are not very good’, and this can impact negatively on any organisation. The reason is that what we may know could be much different to what we actually know. Assumption can be a dangerous word in the world of business, meaning that we should never assume anything about our competition.

What Is Involved In Competitor Analysis?

We will try and outline the process for conducting a competitor analysis and some of the questions we should be asking. Hopefully, this will provide some insight into the reasons and benefits of this kind of business practice.

Firstly, it involves lots of research using open sources to establish who the main competitors are. It is important to note that competitors can be broken down into two groups, these being existing competitors and potential competitors. The former would be those that are active in the same space as our own business and this includes those that are perceived as successful and those that are not. The reason why including those organisations that may not be successful is that we can further identify where they are going wrong which is valuable input for our project.

Once we have identified our competitors (existing and potential) then we can start to collect information. It is worth noting that the information collection stage may be governed by our strategic and operational direction i.e. objectives linked to operational and strategic requirements. Having analytical skills is key to conducting this kind of work and this is why we also promote competitor analysis as a project with clearly defined objectives and outcomes. Also, part of the analytical aspect is the collation, making sense of the information that has been collected. It is rare for information to be disregarded and it is far better to grade the importance and relevance of all information as opposed to throwing such information away if it is felt it is not that important.

Questions To Ask

We could separate the questions to be asked into ‘operational’ and ‘strategic’ with each focusing on differing levels of identified objectives. The operational questions we could ask ourselves when conducting a competitor analysis are:

  • What services or products are they offering?
  • What is the price of such services or products?
  • How do these services or products compare to my own existing services or products?

The above is just an example of some of the questions we should be asking when carrying out a competitor analysis. The list can be very long and would depend on the industry and size of the competitor being researched.

From a strategic standpoint the questions could be similar to:

  • What are the financial objectives of the competitor and how do they relate to our company?
  • What social values does the competitor adhere to?
  • What is the level of risk appetite of the competitor?

The above are just examples that barely scratch the surface when planning how to conduct a competitor analysis. Hopefully, they start to show the level of intent required when undertaking a project of this nature.

Competitor Analysis Outcomes

Finally, let us take a look at the outcomes which we would want to achieve from this kind of work.

  • To identify the main competitors (current and future)
  • A comparison of services/products between your company and the competition
  • A thorough assessment/comparison of marketing strategies
  • An insight into the pricing structure of all competitors
  • An understanding of the innovation and technology used by competitors and how it adds value

Benefits To Your Business

The benefits can be immense compared to not conducting an in-depth look at your competitors. The main consideration for benefits should be that of overall business growth, although there will be other advantages and these may include:

  • Identifying new technology
  • Becoming more innovative
  • Developing enhanced policies and procedures
  • Increasing productivity
  • Reaching larger audiences
  • Tapping into new markets

The list of benefits goes on and on and there really is a lot of value to conducting a professional competitor analysis.

Finally, a competitor analysis is a useful tool to not just understand the competition, but also to identify areas of your business that will enhance growth and productivity. You will be surprised at how the intelligence on your competitors can help shape your own business and allow you to reach your full potential.

If you would like to learn more then please do not hesitate to contact us for a no-obligation discussion.