There is a competitor in every business, and understanding who you are up against is essential for developing cutting-edge goods and advertising campaigns. But, it isn’t always simple to spot a competitor. Some are obvious, while others could require some digging. Your competitor isn’t limited to the companies you’re already fighting against. Everybody who could enter your market in the future is also a competitor. There are many potential sources of a competitor, including the entry of a new business from outside your area or the expansion of an established rival’s offerings to capture a different market segment. Also, competitor analysis helps you evaluate your competitors’ strengths and shortcomings and find business threats and opportunities. With such knowledge, you can create a brand strategy to beat the competition and reach your target market. This guide will help you understand the types, examples, and advantages of competitors in business.
Who is a Competitor?
A competitor can be any entity (person, business, team, or organization) with which you have to compete in a specific market. It’s a catch-all term for businesses that compete with one another by providing clients with equivalent goods or services. While rivals at first seem, competitors are actually essential members of the industry’s bigger ecosystem.
Maintaining a competitive edge and a healthy bottom line requires a healthy dose of healthy competition. Long-term customers win as prices are lowered and innovation is spurred. Companies might learn about their own flaws and opportunities for growth through competition.
Many parties, including established rivals, upstarts, and even former clients become rivals by virtue of providing identical goods or services, all count as competition. Hence, competitor intensity varies with market size and the number of firms operating in it.
Furthermore, you should weigh the advantages and disadvantages of potential competitors against those of your own company when doing a competitor analysis. Examining their business practices in terms of price, products, customer service, marketing, funding, and standing in the industry as a whole is essential. Finding out what sets them apart from you and where they excel, be it in terms of pricing or features, is crucial.
Instead of being something to be dreaded, competition should be welcomed for the way it compels organizations to innovate more quickly and maintain a higher level of flexibility. Keeping your business effective in today’s dynamic market requires an awareness of the tactics employed by your competitors and the implementation of innovative new ideas that surpass those of the competitors.
How Do You Find a Competitor?
To be ahead of the pack, you need to know who you’re up against since this will help you avoid common traps and give you an edge over your competitors.
#1. Rankings for Search Terms in Google
Users of search engines like Google and Bing are more likely to click on results on the first page. Once you realize this, you can assume the role of a possible client and quickly locate your competitor.
Create a list of the top hits on the first page of Google when people search for the service you offer and the location you’re in (location). Try “Car Detailer, Seattle” to see what comes up if your company offers auto detailing services in that city.
Also, think about how clients can locate your company and the competition. If you don’t already have one, you should compile a list of keywords and phrases that clients would use to search for your business or a similar one. Sort them in order of how important you think they are to the success of your company.
If you want to rank higher on search engine results pages, you should utilize different terms than your immediate business competitors. By employing a broader set of terms, you can uncover indirect competitors that your primary keyword research may have missed. For instance, if you run a car detailing business, you may not realize that there is an automotive shop in your area that offers the same services as you do.
#2. Research in the Market
Doing market research helps you learn about the products and services offered by your competitor and where your business exists in relation to the market. Watch how the competition markets its wares, not simply what they sell.
Be on the lookout for deals and discounts that your competitors may be promoting, and use the search engines to locate blogs or other articles that businesses write to enhance SEO visibility and webpage traffic by employing the keywords and phrases I outlined before.
Be aware of the channels your rivals use to communicate with their target audience; for example, they may maintain a blog, a Facebook page, or an email list. It’s not just the items that your competitor are selling that matter, but how they’re selling them.
#3. Social Networking Sites
Customer feedback is one of the most valuable sources of insight. Customer feedback is invaluable, and social networking sites can provide a wealth of it for no cost at all.
Reviews and feedback from customers may be found in abundance on social media and review websites like Facebook, Pinterest, Reddit, and Yelp. They can let you know which local businesses are getting terrible reviews and why customers could be looking for alternatives, as well as whether or not clients in your area have a favored startup competitor that has garnered attention mostly on Reddit.
If you want to understand what your clients are thinking and why they might choose you over the competitor, then you should monitor social networks regularly.
#4. Communication with Potential and Existing Customers in Sales
Listening to your clients (or potential clients) and keeping tabs on what they’re saying online is essential for anticipating and meeting their needs.
However, this can be as easy as asking a client for their thoughts while servicing them or handing out surveys to get responses about a recent purchase. Understanding a customer’s preferences can help you determine whether they have a preferred business that poses direct competitors to you, or whether there is a service you can provide that will draw more business.
What Are the 3 Types of Competitors?
Here are the 3 types of competitors in business in today’s world.
#1. Direct Competitors
When you think of your competitors, a direct opponent likely comes to mind. These are organizations competing in the same market by providing equivalent services or goods. The two companies compete for the same pool of consumers.
Apple and Android, Pepsi and Coke, and Netflix and Hulu are all examples of well-known business competitors in their respective fields. But, not only large, nationally or internationally recognized firms face direct rivalry. There are two shoe businesses in this small town, and they are fierce rivals. A small group of real estate agents is too.
The digital industry is likewise facing intense rivalry. Because of the popularity of Twitter’s Periscope program, for instance, Facebook has shifted its attention to live video in an effort to compete.
When direct competitors offer identical items in similar ways, the rivalry between them is typically a zero-sum game, in which a consumer who purchases a competitor’s product is a lost opportunity to sell her own product to that customer. If you stop at McDonald’s for a hamburger, you probably won’t stop at Burger King for another.
#2. Indirect Competitors
Businesses in the same business segment that offer complementary solutions to the same problem are indirect competitors.
Even though they both serve quick food, Taco Bell and Subway have vastly different menus. Despite the fact that their end goals are the same (to end hunger), the means by which they do this are very different.
As another illustration, house painters face indirect competition from big-box stores like Home Depot and Lowes. Yet again, a similar category has different products available.
Although there may be certain examples of a net loss in indirect competitors, this is not always the case. Picture someone going to Lowe’s to buy paint and other supplies for a home renovation project, only to do a poor job of painting their house. To correct the flaws, they may hire a painter from the area.
#3. Replacement Competitors
A replacement competitor provides an option for your product or service by competing directly with you. You’re both aiming to alleviate similar problems, but you’re doing so in distinctive ways.
Similar businesses in the same area, such as restaurants and coffee shops, could be considered replacement competitors. While strolling down the street, some customers might stop at the coffee shop for a to-go lunch, while others could head straight for the restaurant.
The assumption here is that consumers are spending money on a substitute that they could have spent to acquire your services or products.
If there are other solutions to the issue at hand, then these rivals could pose a threat. In addition, the identification of such rivals is also the most difficult. After all, we have no way of knowing the specific motivations that brought folks in our direction.
But, there are various routes we can use to learn this information, such as polling customers or monitoring social media for comments. As a result, you’ll have a leg up on the competition and a deeper understanding of your target demographic.
Discovering more than you bargained for when you seek to profile potential rivals is possible. Try not to panic. Keep in mind that not every competition poses the same level of danger.
Competitors’ Examples
Ultimately, consumers benefit when competitive businesses fight it out for market share. Competition promotes superior quality, which benefits consumers. If two companies sell identical products for comparable pricing, the deciding factor will be quality.
A monopoly exists in a market where only one firm can operate successfully. As with any command economy, monopolies are common (communism). They also exist in open markets if a dominant firm has absorbed or wiped out all of its rivals.
Most free-market democracies employ government regulators to prevent monopolies. Governmental authorities either give their blessing to or reject proposed mergers and acquisitions. Here are some of the competitors’ examples in today’s world.
#1. OnePlus and Apple
As compared to Apple’s prices OnePlus isn’t a direct competition. Whereas Apple’s iPhone is aimed at the urban, educated, high-earning consumer, OnePlus’s offerings are aimed at the tech-savvy and Android-loving consumers who choose to purchase phones in the middle of the pricing spectrum. Despite these efforts, their audiences are beginning to overlap, making these two brands direct rivals.
#2. DHL and FedEx
DHL and FedEx are two companies that compete head-to-head by providing international courier delivery services to customers. Their specialized services and additional features, such as same-day delivery, distribution over great distances, and so on, are what set them apart from one another. Companies also engage in pricing competition in an effort to increase their market share.
#3. Coca-Cola and Pepsi
The rivalry between Coca-Cola and Pepsi is an excellent illustration of direct competition. These businesses sell essentially identical versions of the same product, but they approach market expansion in different ways by focusing on different aspects of marketing and positioning.
#4. Bill Gates and Steve Jobs
The majority of people in business have at least one rival. Bill Gates and Steve Jobs were fierce competitors beginning in the early 1980s and continuing until 2011. After Mr. Jobs’ passing, Gates no longer had a competitor in Mr. Jobs.
In the midst of a rapidly developing computing revolution, Bill Gates and Steve Jobs came to represent two opposing poles. Gates was in the driver’s seat during the first twenty years of their competition against each other. He oversaw Windows’ rise to the position of preeminent operating system around the world.
On the other hand, during the last ten years of his life, Jobs managed to beat Gates at his own game. What transpired when Apple Inc.’s Steve Jobs entered the marketplaces for smartphones, tablets, and music players? Both of the men were hesitant to give each other compliments. Yet, many were quick to provide criticism.
Jobs believed that the primary issue with Microsoft was “a lack of taste.” When asked to evaluate the iPad, which is widely regarded as Steve Jobs’ most significant contribution to the world of business, Bill Gates responded, “It’s okay.”
Competitor Analysis
While doing a competitor analysis can be a time-consuming and difficult procedure, the benefits more than justify the effort.
The results of a thorough competitor analysis can be used to gain insight into the direction of the market, boost the effectiveness of your sales staff, and foresee the chances and dangers that lie ahead for your business. Doing a competition study is the first step toward successfully marketing your product to your ideal audience and expanding your business’s consumer base.
Your business will benefit from conducting a competitor analysis at every step. Competitive analysis can be helpful whether you’re a new business trying to find your footing or an established one attempting to break into a new industry.
Having a wealth of information from a competitor analysis will allow you to do the following:
- Find new markets to expand your company in
- Cater to the wants of your clientele
- Set up your wares in the best possible light
- Take advantage of your opponent’s weaknesses
- Capitalize on their virtues
What Is Competitor Analysis?
Competitive analysis is the process of examining the goods, services, advertising methods, marketing plans, and company concepts of your competitors.
You can learn about the advantages and disadvantages of your competitors by conducting a competitive analysis. Those who are not completely satisfied with the answer they are receiving today will be reachable. You can sell your goods and expand your market share, so successfully expand your business.
What are the Steps in Competitor Analysis
But before you begin filling out any paperwork, you need to know what specific details about the competition you’re seeking. Doing a thorough competitive study requires a well-thought-out plan. If you don’t do this, your analysis of the competitor can be lacking in key details.
Here is a comprehensive breakdown of the process of competitor analysis
- Know who you’re up against by identifying and categorizing your competitors
- Don’t forget the fundamentals: an organization’s summary, revenue, and client count.
- Examine the product that the opposition is selling; learn more about the functions, benefits, and technologies that it employs.
- Find out as much as you can about their current and previous customers by analyzing their customer base. This will reveal important information such as the target audience, brand awareness, and preferred social media channels.
- Examine their social media profiles, as that is where most interactions will take place. Examine the methods your primary competitors are utilizing and the message they are conveying.
- Check out the SEO work that has been done; an SEO competitor analysis can show you how your rivals are leveraging search engines.
- Learn the positioning of your rivals; who are they targeting with their products? The most crucial component of their message is… What methods are they using to get their message out to potential buyers?
- Check the competition’s pricing strategies to see whether you’re leaving money on the table by charging too little or too much.
In addition to improving your marketing strategy and spotting industry trends, you’ll have a better understanding of the terrain you’re competing in by analyzing the aforementioned factors.
Techniques for Competitor Analysis
As I’ve already indicated, conducting a thorough analysis of the competition requires a significant time commitment and substantial resources due to the sheer volume of data that must be analyzed.
It is important to examine all facets of the competition’s presence to get a full picture of their actions and strategies. A solid foundation for competition data is a comprehensive market analysis.
We made a checklist for you to consider:
- Services or Goods
- Clients
- Advertising
- History of the Company
Initially, that may not seem like much, but after you begin exploring, you will find a wealth of knowledge!
Also, examining the competition is a time-consuming process. Time is required to gather and evaluate relevant data, organize the content, and make any necessary edits. Furthermore, when conducting a competitive study, it’s crucial to share the findings across your organization.
Analysis of the market’s competitive landscape is not a license to steal ideas from the competitor. It’s more about recognizing where your company fits in the market, keeping up with the trends that matter, and developing better products and services. Understanding your advantages and disadvantages and developing strategies to expand your market share are key to this procedure.
Benefits of Competitor Analysis
It’s hard to ignore the merits of conducting a competitor analysis. It will assist you in:
- You need to do a better job of selling your advantages to potential customers.
- Give data for use in developing marketing plans
- To help you build your product with confidence
- Find openings in the industry that can help you expand your customer base and brand recognition.
- To take advantage of the flaws of one’s competitors in order to win over those competitors’ customers.
- Enhance your standing within a certain product class.
Conclusion
Your sales crew will be more effective when they have expertise in the products and services offered by their competitor. Also, y our sales team will be better ready for queries from potential customers if they are aware of your competitors’ sales and processes.
Finding out what your competitors are doing to thrive in your business might help you hone your own strategies for success. The benefits of this form of market research for your organization outweigh the time and effort required to conduct it, which is why it is sometimes outsourced to analytics businesses.
Competitor FAQs
What type of word is a competitor?
A group or individual that one is competing against. One who competes, typically in athletics.
What is the best synonym for a competitor?
Here is the best synonym for a competitor
- contestant.
- contender.
- rival.
- challenger.
- competition.
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