Do you have an entrepreneurial idea and are you at the business plan stage? There are many important stages when making your business plan. We will examine with you how to make a “competitive analysis”, which is one of them, and what is its importance with this article.
How to Analyze Competition?
If we have an entrepreneurial idea, we should know the market we will enter well, research it and plan a strong strategy that makes you stand out. For this, we should research other brands or businesses in the same market as us. Thus, we can analyze their current situation and develop methods to increase our market share.
So what is this competitive analysis? Competitive analysis is to research the strengths and weaknesses of other companies in the sector, analyze the aspects that their target audience likes and create our strategy accordingly. This strategy can put us ahead of our competitors. It allows us to better learn the requirements of the sector and the expectations of customers. By learning their weaknesses, we can identify gaps in the sector and focus on those points. While doing these, you can also categorize your competitors and develop determinations accordingly.
When analyzing the competition, we must first find out who the competitors are. We should also identify the social media platforms they use and examine how they use them and their customer base. We should discover industry trends on these platforms, this will help us develop our strategy. You can also examine competitors’ websites and analyze their SEO efforts. A good SEO competition analysis is very important and will immediately increase your conversion rates. It is of great importance to do these analyzes continuously. We must constantly follow and monitor.
Competitive analysis allows us to generate ideas for plans that we can make in the long or short term. It also allows us to identify the differences between us and rival companies and improve our brand. If there is a negative situation that the competitor has faced before, it allows us to analyze and take the actions that need to be taken in advance.
For all these, it is of great importance to choose and apply the right type of competitive analysis. Let’s take a closer look at some types of analysis for competitive analysis.
1) SWOT Analysis
SWOT analysis, which consists of the words strengths, weaknesses, opportunities and threats , allows us to analyze opportunities or threats by listing the strengths and weaknesses of competitors. When conducting SWOT analysis, you can evaluate from both customer and company perspectives. This method makes it easier to analyze from every angle.
Before conducting a SWOT analysis, you should determine your goal. This is because you clearly know what you will analyze. Otherwise, you may spend time on many other issues and may not get efficiency. After determining your target, we should research the sector and the market and have a good idea about what and how we can do. Once you have identified the strengths and weaknesses, you are ready to start building your strategy!
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2) PEST Analysis:
PEST consists of the words political, economic, social and technological and you can measure the developments of your competitors in these areas with this analysis method. The difference from SWOT analysis is that we can evaluate the operational skills of your competitors. We can also examine how our competitors cope with external factors with this method.
3) Competitor Array Method
With the competitor array method, we can understand the performance of our competitors. This analysis method, which enables us to compare our competitors with certain conditions and criteria, allows us to identify the strategic priorities of our competitors. We can compare competitors according to their products/services, prices and customer segments.
4) Porter’s Five Forces
This method of analysis examines five key forces: the intensity of competitive behavior, the threat posed by new market entrants, the bargaining power of new buyers, the bargaining power of suppliers and the threat of substitutes. With this basic information, we can develop our strategy and formulate our objectives more clearly. But it is better to apply this analysis to a niche sector or a specific market segment.
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5) Strategic Group Analysis
With strategic group analysis, we group our competitors according to strategy similarity. While grouping, we can look at their marketing methods and pricing tactics. It is very important to include our own company in this grouping because we can see which competitors we compete more closely with and better analyze the effects of our strategies.
6) Business Model Canvas
A business model canvas helps us to examine every aspect of a business model in detail; it increases clarity for our goal and allows us to focus on the essential points we need to focus on.
By focusing on customer segments, the business model canvas helps us identify who the customers are. With this we can develop our plan. By focusing on value propositions, we can find answers to the questions of why customers buy or use. On the business model canvas, we should focus on the channels element, which is how we will promote, sell and deliver our offerings.
We can summarize and investigate how revenue is earned and where it is earned as revenue streams. We then explore our key resources and get to know our unique strategic assets that differentiate us from our competitors. We can identify our external resources, also called key partnerships, and note key activities. Finally, the most important part, cost quantification, is to create a cost structure and analyze what the cost drivers are and how they relate to revenue.
Since the business model canvas covers every part in general, it will give you a bird’s eye view of your business plan and competitive analysis and will contribute to a clearer plan in your mind.
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7) Competitor Analysis with Grower
With Grower, which allows us to track website and social media accounts in a single panel, you can see all your data on a single screen by integrating marketing tools such as Google Analytics, Instagram, LinkedIn, Twitter.
Grower, which will also be your biggest helper in competitive analysis, allows you to earn the time you lose when dealing with the items we have reviewed above. Every month, you can receive powerful reports containing your competitors’ data, behavior, and notifications for important changes related to your industry.
With Grower, you can analyze every social media account and website on a regular basis, and you will save time.
In this article, we have told you about what competitive analysis is, its importance and methods. You can use these methods and save your time by using Grower.
