Understanding your competitors

Identifying your competitors and knowing what products/service they offer is vital. It enables you to set competitive prices and respond to new products which your competitors may be offering.

Who are your competitors?

Every business faces competition irrespective of the industry or sector. The emergence of the internet now means that a business no longer has to compete locally, as customers can now buy goods or services from a wider geographical area.

Competition is not just another business, but it could also be another product or service which is being developed which may make your product outdated.

Clues as to who your competitors are can be found in some of the following places:-

• Business directories
• Chamber of commerce
• Marketing material e.g. flyers
• Customer information
• Internet search
• Trade fairs

What to know about your competitors

In order to compete with your competitors, you need some information about them. The information can then be used to avoid some of there pitfalls, or even gain an advantage over your competitors.

Look at:

• Products or service they provide
• Prices charged
• Delivery process
• Design process
• Staff numbers
• Accounts at companies house
• I.T. infrastructure

In addition to the above you should try and find out as much information as possible about your competitors customers, to enable you to entice more customers to your business. Gather information such as:

• Who are they e.g. age range
• Popular products
• Any long standing customers
• Customer preferences

How to act on the competitor information you get

The information you discover about your competitors should tell you whether there are gaps on the market for you to exploit. It should also indicate whether there is a saturation area in your market which might lead you to focus on a less competitive area of the market.

The information that you gather from examining your competition can be place into three categories:

• What your competitors are doing better than you
• What your competitors are doing worse than you
• What your competitors are doing the same as you

Once you have placed the information into the relevant category you can than set about improving the performance of your business.

What your competitors are doing better than you

If your competitors are doing something better than you, then you need to respond and make changes to your business. It could be that your competitor is better at retaining or recruiting staff, customer service, or the prices of the product / service on offer is more competitive than your own.

What your competitors are doing worse than you

Exploit the gaps you’ve identified, these may be in their marketing, distribution or their product range.

Renew your efforts in these areas to exploit the deficiencies you’ve discovered in your competitors.

What your competitors are doing the same as you

Why are they doing the same as you, especially if you’re impressed by other things they do.

Analyse these common areas and see whether you’ve got it right. Even if you have you’re competitors maybe planning an improvement.