When you’re running a business you have a constant string of important decisions to make – mostly about where and how you spend your money. If you’re going to make good decisions that maximise return on that money and create a secure future for your business, you need to know what’s on offer and how valuable it is to you.
To that end, today we’re looking at Competitor Analysis. It’s a specialist form of insight, it can command a premium price and its fans will tell you it can supercharge your business. So we’re asking what it is, and how it can really help?
One of the key challenges to your business is the competition – other businesses operating in your space (both in your literal locality and within your niche). Even if you’re not consciously engaged in a bitter rivalry with another business owner, you need the same things: you’re drawing on the same pool of customers, hiring from the same pool of talent, using the same resources for your products.
Anything that can help make better decisions than your competitors – help you guess at what they’re going to do next, so you can do something better – is invaluable, and that’s what competitor business analysis promises.
How Does it Work?
There are lots of different tactics that go into Competitor Analysis – this is one of the things that makes it the sort of highly specialised skill ideal for consulting rather than internal hires for most businesses – from analysing the past behaviour of companies, sifting their financial data and wargaming their responses to different situations.
From these different activities, Competitive Analysis consultants can provide you with insights and advice – turn the hypothetical knowledge into things you can do right now.
One of the most important issues in co-existing with competitor businesses is timing. You’re operating on a similar seasonal calendar, with people interested in your industry at similar times of year, but it can be fatal to sync up too exactly. Launching a new product, a marketing push, a sale in the same window as a competitor blunts its impact: you force your customers to choose between the two of you, and unless you are very convinced that you’ll come out on top, it’s a clash that’s best avoided. Even if it’s a positive result, you still blunt the impact of your marketing and get less return on each penny spent.
One of the big advantages of competitive analysis is that it allows you to make informed decisions about where the white space is in your calendar, and your industry, where you can maximise the attention you’re getting and the return on your investment.