Competitive Analysis: Customer, Problem, Solution
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Technologies similar to Cookies
Similar technologies are technics or tools, using certain characteristics to identify devices so that visits to a website can be analyzed. It includes, for example, HTML5 local storage, local Shared objects, fingerprinting techniques, tracking pixels and plugins.
For ease of reference, cookies and similar technologies are referred as "Cookies".
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Cookies enable us to provide users with certain features and supply us with information about website visits.
We also make use of cookies to make our site more user-friendly, to better understand our existing and prospective customers, including associating a user with different devices and browsers that they may use for online targeting and advertising purposes.
Keep your friends close and your enemies closer. Let's talk about competitors and, more specifically, competitive analysis. When and with whom should your company be compared? How do you gather information? Why look for similarities and identify differences?
Competitive analysis is not used to copy ideas. It is used to analyse competitors' sales offers, pricing, product range and profits, as well as their customer relations, marketing, loyalty programmes, distribution channels and advertising. How else can you understand where your business stands in the market and whether it has prospects for growth?
Which competitors to analyse and how to analyse them?
What is the best way to select competitors for analysis? What if there are more than a dozen? How do you select the most characteristic and significant ones?
In order to correctly identify your competitors, you need to answer three questions.
1. The customer (WHO?).
The customer dictates his terms when the market is flooded with goods and services. And supply exceeds demand. Who is your customer? Who is your target audience?
2. Problem (WHAT).
What is the main problem your product/good/service/business solves for your target customers?
3. Solution (HOW?)
How does the company solve this problem? By using what?
Choose 10 companies to analyse. The first three should be direct competitors, leading in niche, market share and website traffic, the next 4-5 are your closest competitors. The last 2-3 companies are indirect competitors, offering similar products and meeting the same needs of the target audience.
Get into the habit of checking your competitors regularly: a direct competitor may go out of business and an indirect competitor may become a direct competitor. The world, technology and needs change. Some players leave and others take their place.
Competitive analysis is not used to copy ideas. It is used to analyse competitors' sales offers, pricing, product range and profits, as well as their customer relations, marketing, loyalty programmes, distribution channels and advertising. How else can you understand where your business stands in the market and whether it has prospects for growth?
Which competitors to analyse and how to analyse them?
What is the best way to select competitors for analysis? What if there are more than a dozen? How do you select the most characteristic and significant ones?
In order to correctly identify your competitors, you need to answer three questions.
1. The customer (WHO?).
The customer dictates his terms when the market is flooded with goods and services. And supply exceeds demand. Who is your customer? Who is your target audience?
2. Problem (WHAT).
What is the main problem your product/good/service/business solves for your target customers?
3. Solution (HOW?)
How does the company solve this problem? By using what?
Choose 10 companies to analyse. The first three should be direct competitors, leading in niche, market share and website traffic, the next 4-5 are your closest competitors. The last 2-3 companies are indirect competitors, offering similar products and meeting the same needs of the target audience.
Get into the habit of checking your competitors regularly: a direct competitor may go out of business and an indirect competitor may become a direct competitor. The world, technology and needs change. Some players leave and others take their place.
Percentage market share
Market share estimates help you identify the main competitors in your area. Don't ignore the big competitors - you can learn a lot from them. The '80/20 rule' can help: follow 80 per cent of the direct competitors (companies with the same market share) and 20 per cent of the big players.
Pricing
Find out how your competitors price their products. How competitive is your product in terms of price, quantity and quality? Their pricing strategies can provide great ideas for A/B testing.
Marketing
What kind of marketing plan does each competitor use? Analyse their websites, their social media strategy. Who do they work with, what events do they sponsor? What is their SEO strategy, taglines and current marketing campaigns? Do they have a referral strategy? An affiliate programme?
Differentiation
What makes your competitors unique and what do they promote as their best qualities? What is their differentiation? Can you identify a market segment that is not yet or only partially occupied by your competitors?
Strengths
Identify what your competitors are good at. How do they work with their customers? What do they include in their reviews? How do they describe the product and its benefits? What kind of advertising do they use and where do they place it? How recognisable is the company (even a small one) to the target audience? Can it be confused with a similar one? Try to test your competitors' products and service chain yourself to see how they work and what they do better.
Drawbacks
Look for problem areas in your competitors' business. Find out what they could do better. This will help you understand your competitive advantage. Is their social media strategy lacking? Do they have an online store? How up to date is their website?
Geographical
Where are they located? Which regions are they interested in? Which part of their business solves online problems? By studying your competitors' geography and customer demographics, you can find out which markets they're most focused on (and if you're lucky, find an area that's not already too saturated with them).
Market share estimates help you identify the main competitors in your area. Don't ignore the big competitors - you can learn a lot from them. The '80/20 rule' can help: follow 80 per cent of the direct competitors (companies with the same market share) and 20 per cent of the big players.
Pricing
Find out how your competitors price their products. How competitive is your product in terms of price, quantity and quality? Their pricing strategies can provide great ideas for A/B testing.
Marketing
What kind of marketing plan does each competitor use? Analyse their websites, their social media strategy. Who do they work with, what events do they sponsor? What is their SEO strategy, taglines and current marketing campaigns? Do they have a referral strategy? An affiliate programme?
Differentiation
What makes your competitors unique and what do they promote as their best qualities? What is their differentiation? Can you identify a market segment that is not yet or only partially occupied by your competitors?
Strengths
Identify what your competitors are good at. How do they work with their customers? What do they include in their reviews? How do they describe the product and its benefits? What kind of advertising do they use and where do they place it? How recognisable is the company (even a small one) to the target audience? Can it be confused with a similar one? Try to test your competitors' products and service chain yourself to see how they work and what they do better.
Drawbacks
Look for problem areas in your competitors' business. Find out what they could do better. This will help you understand your competitive advantage. Is their social media strategy lacking? Do they have an online store? How up to date is their website?
Geographical
Where are they located? Which regions are they interested in? Which part of their business solves online problems? By studying your competitors' geography and customer demographics, you can find out which markets they're most focused on (and if you're lucky, find an area that's not already too saturated with them).
Customer reviews
Analyse your competitors' customer reviews, both positive and negative. For 90% of users, reviews are the deciding factor when choosing a supplier and products.
Vendors
When competition is high, advertising and price wars occur. The fewer suppliers in the supply chain, the more dependent the business becomes. Who supplies your competitors? How do they negotiate and source suppliers?
New players
Are new competitors likely to enter the market? How easy or difficult is it to enter the market? The easier it is for a new competitor to enter the market, the greater the risk that an existing company's market share will be eroded.
Plan and analyse
Whatever the size of your business, competition has a direct impact on your success. You need to study your competitors, their pricing and quality ratios, not only to know your place in the market and forecast your needs, but also to anticipate their actions. For example, whether competitors will be able to reduce their costs. Fincraft Capital s.r.o. assists its partners in analysing their competitors: identifying the main advantages and disadvantages, identifying the most in-demand and profitable product categories, giving recommendations on assortment, finding suppliers and manufacturers.
Analyse your competitors' customer reviews, both positive and negative. For 90% of users, reviews are the deciding factor when choosing a supplier and products.
Vendors
When competition is high, advertising and price wars occur. The fewer suppliers in the supply chain, the more dependent the business becomes. Who supplies your competitors? How do they negotiate and source suppliers?
New players
Are new competitors likely to enter the market? How easy or difficult is it to enter the market? The easier it is for a new competitor to enter the market, the greater the risk that an existing company's market share will be eroded.
Plan and analyse
Whatever the size of your business, competition has a direct impact on your success. You need to study your competitors, their pricing and quality ratios, not only to know your place in the market and forecast your needs, but also to anticipate their actions. For example, whether competitors will be able to reduce their costs. Fincraft Capital s.r.o. assists its partners in analysing their competitors: identifying the main advantages and disadvantages, identifying the most in-demand and profitable product categories, giving recommendations on assortment, finding suppliers and manufacturers.