They say competition is fierce, but in fact it really is one of your greatest assets when starting up a new business.
Knowing who your competitors are, how they compare, and what their competitive advantages are is vital business intelligence – so it is important to do your research, talk to customers, and find your point of difference and unique selling point.
Whatever your sector, niche or marketplace, there’s almost certainly going to be other competitors in that space – but do you know who they are and what threat they pose?
Are you the only provider of your specialism, or are you one of many companies that are all vying for the same customers? Knowing who those companies are, how they compare and what their competitive advantages are is a vital piece of business intelligence for you.
So, how do you start this process of identifying your competitors and benchmarking your offering against the nearest market competitors? Market research.
Researching Your Competitors
To begin with, it’s worth understanding the difference between your direct and indirect competitors. Knowing who your direct and indirect competitors are isn’t always easy, but defining the differences is quite straightforward:
- These companies sit in the same market, produce the same products or services, and aim themselves at the same core customer audience as you.
For example, Coca Cola and Pepsi are direct competitors in the cola market because they both want to sell cans of cola to the same customers.
- These companies do not sit in the same market, may make related products or services, and may be aimed at a slightly different core demographic. They’re not directly competing with you, but they may offer a product that appeals to your audience.
For example, Evian is an indirect competitor of Coca Cola, as they offer bottled water that could be an alternative to a sugary, unhealthy cola drink.
The key point here is to not limit your thinking purely to businesses that do exactly what you do. Think wider than the products that provide the same features and benefits.
For example, a motorbike manufacturer competes not just against other makers of petrol motorbikes but against makers of electric bikes, pedal bikes, and small car manufacturers – all of which offer a small, handy form of personal transportation.
Understanding Your Competitors
Here are 5 points to keep in mind, when it comes to having an understanding of who your direct and indirect competitors are, and where your business stands amongst them.
Research Your Market to Understand Your Customers’ Needs
- Talk to customers in your specific market, chat to the contacts in your business network and do your online research, with the aim of finding out which direct and indirect competitors are a potential threat to your business. If you’ve got the budget, hire a market research company to do all this for you.
Know your Competitive Advantage
- Once you’ve identified your competitors, you can then get a much better idea of your own competitive advantage, i.e., the traits that make your product or service stand out in the market, or that give your brand a more dominant edge over your competitors.
Track your Competitors
- Competition doesn’t stand still, so you need to keep your eye on your competitors’ activity, be aware of their new product releases and know how well they’re performing in the market. The more closely you track your competitors, the easier it will be for you to revisit and evolve your competitive advantage.
Benchmark Yourself Against the Market
- By tracking variables like price, product range, customer satisfaction or brand awareness, you can benchmark these against the available public information for your competitors. If a direct competitor has a 50% sale, think of ways to react to this threat – for example, matching the discount, or offering additional bonus items or benefits with your products to add more value to your price.
Learn to Differentiate your Brand
- Features and price are not the only ways to differentiate your products in the marketplace. Think about areas like your brand personality, your company values, or your reputation for great customer service. These are all excellent ways to make your brand stand out and to win loyal customers.
Talk to Agilis CA today about enhancing your business to ensure it remains viable against competitors
At Agilis, we can help take your business to the next level, with our business development services.
We can help you strengthen and expand your business within the market in which it is operating, and help create a business plan tailored towards you, your business, and your business goals.
Contact Agilis CA today, to discuss how we can enhance your business.
This blog was originally published by BOMA, but has had edits made by Agilis CA for the benefit of our readers.