For anyone trying to build a new business, one of their first tasks is to analyze and profile their competitors. Thanks to understanding your competitors, you will be able to find, exploit and even learn how to develop that same competitor. The following twelve tips will help you outline and complete this practical task.
1. Be a customer of your competitor
When playing the role of a customer, bring paper and pen to jot down important points to remember and ask as many questions as possible. Examining a competing company's customer service capabilities will tell you quite a bit about what they do. You should also buy something from them. That's the only way to get some first hand experience with the products/services you're looking to approach.
2. Learn as much as you can about the executives of competing companies
How educated are these people? What schools did they attend? Their work history? How long have they been in business? What are their strengths and weaknesses? This news can help you foresee your competitors' moves. For example, an experienced farmer will run a company specializing in providing plant seeds very differently from the way a young master who just graduated from an agricultural university will do it.
3. Buy shares of competitors
If you are competing with companies listed on the stock exchange, then, you should consider buying a bit of stock in these companies. This way will help you receive regular reports and updates on the financial results as well as business strategies of this company.
4. Talk to your competitors' customers
When talking to your competitors' customers, you should find out why they buy their products/services? Is it due to quality or price, location or just customer support? What do customers not like about the company competing with you? What do they want that competing company to offer? Why don't they buy goods/services from your own company but still buy from a competitor company?
5. Use the Internet
Online services for example Dow Jones Interactive allows you to search thousands of publications to get news about your competitors. You can search for information online or if you want to subscribe to articles published on Down Jones, you will have to register and pay a monthly fee. You can also learn a lot about competing businesses by simply visiting their competitors' websites.
6. Check public archive information
As a business owner, you probably know that companies must disclose information to the relevant authorities. Businesses will have to declare information to be allowed to list on the stock market, to obtain a business license, to register for a patent or trademark... Those registrations will be saved. and they will include information about the company's goals, policies, and technologies.
7. Get to know local librarians
Many of them are surveyors and researchers with high technical qualifications and so they will help you save a lot of time and effort in finding information. In the data archives you will also be able to find local publications that contain information about regional competitors.
8. Attend industry conferences and trade shows
Representatives of your competitors will display all of their company's products/services at conferences and trade shows. Take this opportunity to familiarize yourself with the products/services your competitors are offering, their sales strategies, and their sales methods.
9. Approach your competitors' goals
A competitor trying to increase market share may lower its prices. A company trying to increase profits can cut costs. A business that wants to drive sales growth can ramp up and focus on a marketing campaign. If you know your competitors' goals, you will be better able to predict their strategies.
10. Understanding the potential of new competitors
Today, the competitive situation in the marketplace always changes rapidly. A new retail chain may not be entering your area at this time, but if it does happen in the future, what will the situation be like? Likewise, you should consider that companies are not currently your competitors, but in the near future they may change their goals and become direct competitors to your company.
11. Don't delegate the job of tracking your competitors entirely
You can assign someone to work with you on this issue, as well as delegate survey research and other related tasks to someone you trust. But as a business owner, you must be the one to review and make decisions on that information.
12.Define the competitive landscape as a whole
Your competition plan should include anything that draws customers from your competitors to you. For example, you can see how theaters compete not only with other movie theaters, but also with restaurants that offer live music, and even with cable television and other video games too.
