Assessing strengths and weaknesses of competitorsCompetitor analysis
The competitive analysis, determines strengths and weaknesses of competitors within the chosen market. Competitor analysis is absolutely essential if you have to grow in a competitive market. It is becoming increasingly important because of rise in competition in each and every sector. Whether electronics, automobiles or FMCG, each sector today is facing immense competition affecting margins and sales. Thus there are some critical steps to be followed by these organizations to outperform their competition. However, they will be able to stand out only when they KNOW their competition.
With this evaluation, businesses can establish:
i) what makes the product or service unique
ii) what gaps are there in the market, and
iii) what strategies will generate competitive advantage.
The six steps used by Vidvox to develop competitive analysis include:
1. Identify current and potential competition.
This is done from customer’s point of view and from the business’ perspective. The best way to identify current and future competitors is to analyse your target products. Supposing you are currently selling hair oil. You need to know how many branded and unbranded players are there in the market. You need to know if any new company is starting to sell Hair oil or if any current company might stop selling the same.
Furthermore, you also need to know how many of your customers prefer some other product over Hair oil. Thus by doing this you know your direct and indirect competition. This is the first step in competition analysis.
2. Determining strategic areas of competitiveness or market share.
For example, these could be chosen from durability, quality, marketing, selling capability, distribution or reach, service quality, and price. Naturally, once you have identified the competition, the second step is to know their market share. You cannot know the strengths and weaknesses of your competition unless and until you know their presence. Thus if your product is selling in a wide region, you need to break down the region into territories and find out the share of wallet in each territory.
While doing this, you can also do a mini market research to find the reason for the sale of your competition. Is it selling because it is easily available, quality is high or price is low. This step will help you perform a SWOT.
3. Create a competition matrix or SWOT.
Once you know the share of market and you have done your secondary and primary analysis, you need to actually work out the strengths, weaknesses, opportunities and threats for each of your competitor in turn.
This is important as this shows where you currently stand in your industry, who do you need to benchmark to move forward and what strategies can be most effective to stay on top or to avoid a drop in rank. The SWOT is indirectly responsible for showing you the steps where you can capitalize and move ahead of your competition. Down left column write names of five major competitors. Across the horizontal axis, list five strategic areas in which you are competitive filling each box. Evaluate the strengths and weaknesses of each competitor in relation to the associated strategic area.
4. Competition Portfolio.
Once you know the SWOT of your competitors, you can build a competition portfolio. A competition portfolio will have each and every product of your competitors, their features, logistics, tangible features (product qualities), intangible features (product service) etc. This portfolio needs to be treated like MIS and needs to be updated time to time. The best source for building a competition portfolio is your sales force itself. They are continuously in touch with the market and therefore can immediately notify you of any changes happening in the market.
5. Plan strategies.
Reviewing the matrices to determine which areas your business is most vulnerable. One could see price as the benchmark in a competitive product; its position could be threatened if quality is compromised. Now you have your complete competition portfolio in front of you. Thus you clearly know your line of action. If the competition is far superior, you have two ways to move forward. You can either try the same strategies as top competitor and slowly move on top or you can go innovative and try to directly take on the market leader.
At the same time, if the competition is average and you can reach the top through some effort, then do not procrastinate and put the best strategies forward to reach the top at the earliest.
6. Execute strategies.
Executing the strategies that are the best and ensuring executing them effectively. There is no meaning of going to such an effort to analyse a competition and then fail at the implementation part. At the same time, it is very important to have a contingency plan and to anticipate your competitors reaction. If competitor reacts too strongly, put the contingency plan in place to avoid any long term affects. This might cause you to lose the advantage of surprise, but it definitely gives you more chances to form even better strategies.
Statistics are always useful for a firm and help the firm in practical decision making. By following up you are making sure of quantitatively and qualitatively measuring the response to the executed strategy. Ideally, the same should be documented so that future generations of marketers may know the earlier strategies implemented and might be able to revive the same through different angles.
At the same time, one might actually execute a strategy which gets excellent response from customers. In these cases too, one needs to stick with the same strategy for a longer time and in such cases, it is crucial to have the feedback from customers so as to know at all times whether the strategies are working effectively.
In the end, whatever strategies one makes, competitor is going to respond. Hence, competitor analysis needs implementation and updating from time to time. There are very few industries in which have only 3–4 players. In fact, major industries are characterized by as many as 10–20 different competitors (branded, unbranded, direct, indirect). Competitor analysis helps you in pin pointing your current standing in the market and the future direction.
WHAT IS SOCIAL MEDIA SENTIMENT ANALYSIS?
Social Sentiment analysis is the use of natural language processing (NLP) to analyse social conversations online and determine deeper context as they apply to a topic, brand or theme. Our net sentiment score and brand passion index show how users feel about your brand and compares across your competitors.