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Competitor Analysis: All you need (+ How to Start Guide)

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competitor analysis

How do you see competitors in your industry? Do you see them as a threat, a motivation, or an information bank to learn from? Hopefully, important competitor analysis tools provided in this post will help you in using your competitors to serve your customers better.

WHAT IS COMPETITOR ANALYSIS

Competitor analysis is a way companies in an industry get to see the full picture, which is the strength and weakness, of their current and potential competitors. So, it helps companies realize opportunities and strike decisively against their competitors. Clearly it is handy to every business no matter the size or the stage. That is small business owners, big business co-operations, and start-ups.

TYPES OF COMPETITOR ANALYSIS FRAMEWORK

There are different types of competitor analysis framework which you can use for effective competitor analysis in your marketing strategy. And these frameworks have their differences and individual peculiarities that make them more effective in different marketing conditions. Let’s look at them and know when best to apply them.

  1. SWOT analysis:

    SWOT stands for Strength, Weakness, Opportunities, and Threats. It’s a popular and easy framework used by firms to analyze internal and external factors that can affect their business. The internal factors being strengths and weaknesses and the external factors being threats and opportunities. The constituents of each component of SWOT analysis are organized based on hierarchy by companies. So, SWOT analysis of a company will look like the image below.

  2. Porter’s five forces:

    This type of competitor analysis framework has five components as summarized below.

    1. Level of competition within the industry:

      There can be an inverse relationship between the number and strength of your competitors to your market relevance. Your power to influence the market can diminish when you have more competitors with a better product than yours.

    2. Supplier power:

      If you have suppliers above you in your industry. How easy can they increase the prices of their supply? Clearly, the more the number of suppliers with quality products the more your alternatives. So, this could force them to cut down prices to attract customers.

    3. Buyer power:

      How much will it cost buyers to influence your price in the market? Obviously, if you have a large customer base whom you provide with an affordable quality product better than that of other rivals. It will be quite difficult for customers to dictate terms for you.

    4. The threat of substitution:

      If there are lots of options for your customers to choose from then they will likely choose the cost-efficient ones. For example, if they could DIY your products. Then they are likely to cut you out. So, you have to constantly strive to make your product among the few options available to them.

    5. The threat of new entrant:

      The cheaper, in cost and time, it is for new competitors to enter a market the easier they can become a formidable competitor and weaken your hold of the market share.

  3. Strategic Group analysis:

    By applying this type of framework. You will be able to group companies within your industry based on their strategy in the market. Know the ones that possess more threat to you in the industry and how to deal with them. Then know the ones that are less threatening and keep an eye on them.

  4. Growth share matrix:

    The growth-share matrix categorizes products based on their growth potential and market share. They are the cash cows, the dogs, the question mark, and the cows. Hence you can use this tool to know the stand of a competitor’s product in the market and how to rival it.

READ ALSO: MARKETING STRATEGIES FOR E-COMMERCE BUSINESS

COMPETITOR ANALYSIS TOOLS

Let’s check out some examples of important competitor analysis tools that will help you gather and analyze data of competitors in your industry. We’ve categorized them based on these 4 areas of specialization.

  1. Competitor analysis tools for social media:

    These tools enable companies to monitor their competitor’s social media presence. Examples are Sprout social, Phlanx, Social blade.

  2. Competitor analysis tools for SEO:

    Helps sites to discover keywords that drove the most traffic to the competitor’s site. And more than providing trending keywords they also provide data on SEO  attributes like backlinks, organic, and paid searches. Examples are SEMrush, Ahrefs.

  3. Competitor analysis tools for content:

    They help businesses in the analysis of a rival’s content. So, this could help them learn and make adjustments to their subsequent contents. Examples of the tools are Buzzsumo, Similarweb.

  4. Competitor analysis tools for ads, emails:

    Tools like isPionage help businesses monitor a rival’s paid ads. It helps in the analysis of multiple aspects of pay per click campaigns. Also, email analysis tools like Milecharts and Owletter are handy when businesses want to dig into their rival’s Email marketing.

HOW TO DO COMPETITOR ANALYSIS

So, you now have an idea of competitor analysis is all about. Now let’s guide you on an easy to use steps for your competitor analysis.

  1. Discover and categorize your competitors:

    This is the very first thing to do in competitor analysis. It involves you finding out your competitors and classifying them based on the type of competitor they are to you. A simple google search of keywords in your industry could help you with these. Other tools like SEMrush and Similar web will also automatically list your competitor’s websites when you enter your own website in the search field. Then, when you are done identifying; categorize them based on the type of competitor they are.

      • Direct competitor

        Provides similar products to solve the same problem for the same consumer base.

      • Different solution competitors

        Provides similar products to the same customer base but using a different technique.

      • Different customer competitors

        Solves the same problem with a similar product but to a different customer base.

    For a detailed and thorough analysis, it is advisable to get at least one competitor for each of the categories.

  2. Company information:

    When you have discovered your competitors. Then, it’s time to do some digging on some information about them. This information includes

      • the company’s overview like the number of employees

      • their funding and estimated revenue and

      • customer base features.

    You can get information on the company’s overview on their website or social media platforms. And for their funding and estimated revenue, you can dig something up from their media interviews and conference presentations.

  3. Product information:

    You need to know everything about the product your company provides. For example, product features, pricing, and customer benefits. If they have an e-commerce platform check it out to get product information.

  4. Customers’ details and reviews:

    Customers’ detail like their geography helps you know your competitor’s target location. Their reviews let you know their sentiment. Tools like Awario and Mention will be handy to gather information about your competitor’s customers.

  5. Marketing:

    The information you should gather here is as follows.
    SEO, social media presence, influencers and partners, content marketing, Advertisement. The competitor analysis tools will help you out with these.

  6. Use the appropriate competitor analysis framework:

    Feed your garnered intel to the most suitable type of competitor analysis framework. Know the strengths and weaknesses of your rivals. Then act based on the result of your analysis.

    READ ALSO: HOW TO GAIN COMPETITIVE ADVANTAGE

IMPORTANCE OF COMPETITOR ANALYSIS

If you call it espionage. Fine. If you calling it an intrusion of privacy. No comment. But it’s apparent that competitor analysis is important to businesses. And some of these importance are as follows

  1. Identification of threats and opportunities:

    This is the major importance of every competitor analysis. So, you recognize the strengths and weaknesses of your competitors after analyzing them. Hence, these strengths serve as a threat to you, so you need to adjust well, and the weaknesses an opportunity for you to strike at.

  2. Increase market share:

    If you are far low in ranking in your industry. Then, this is the long-run importance of competitor analysis. Realizing your customer’s taste from a competitor and fine-tuning it will have an impact on your market share.

  3. Proper channeling of resources:

    You don’t get to waste resources on low yield products or marketing strategy after conducting a comprehensive competitor analysis.

  4. Increased sales:

    When you have a sizeable market share; your sales increase. Hence, this is another importance of competitor analysis.

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Business strategies

Ansoff Matrix Explained: Practical Examples, Theory, & Strategy

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Ansoff Matrix

You are probably trying to get your head around some questions like “what Ansoff matrix is,” “Ansoff matrix theory,” “Ansoff matrix examples,” “Ansoff matrix strategy.” Well, you’re at the right place cos this post has been designed to clarify all the questions you have in mind on this subject.

What is Ansoff Matrix

The Ansoff Matrix theory was developed by Russian-American mathematician and business manager Igor Ansoff. It’s a framework that’s designed to help firms decide their market growth as well as product growth strategies. Clearly this tool is not just handy to big business but also to small businesses and start-ups. Because a big business might want to diversify its products but a start-up might just want to penetrate the market. Having this knowledge, let’s take a look at the breakdown of these strategies.

Breakdown of the Ansoff Matrix Strategy

There are 4 quadrants in the matrix, and as a company you can choose from any of the quadrants, the strategy that maximizes your market potential. So, let’s breakdown this Ansoff Matrix Strategy by taking a look at all the components of the framework. The picture below gives a nice summary of the strategies.

Ansoff Matrix

  1. Market penetration in Ansoff matrix:

    This is the least risky in the Ansoff Matrix strategy. It focuses on getting more out of an existing product in an existing market. So, a company tries to sell more of its products in its present market through any of these. Increase in advertisement and distribution support, reduction in price, acquisition of a rival. One prerequisite for this is having a small market share. So, you try to get more hold of the market through this strategy. But if you already have a sizeable chunk of the market, then you may want to select any of the other three.

  2. Product development in Ansoff matrix:

    In this strategy the firm creates more products in it’s existing market to satisfy consumer needs. In this you already have a customer base for a certain product but the product has attained a level of market saturation. So, to solve this you offer consumers another product within the same market. The new product can be actualized by patent acquisition to produce someone else’s product, badging a bought product as your brand, investment in research and development of additional product.

  3. Market development:

    By applying this Ansoff matrix strategy a firm aims at reaching out to a new market segment with their existing products which has gained market penetration in another market segment. For instance, some companies after gaining national market penetration in a given country, they move forward to reach out to consumers in other countries where they’ve not been established. You can actualize this in a local business by moving your product which has gained market penetration in a state/province to other states. However, it’s advisable not to take up this strategy until your products have penetrated at least one market.

  4. Diversification:

    When companies adopt this Ansoff matrix strategy they introduce new products to a new market. Because the company is investing in both a new market and a new product this causes a two quadrant move in the Ansoff matrix. So, this makes this strategy the riskiest. Diversification strategy could be related or unrelated. In related diversification there is relationship and hence potential synergy between the firms. In un-related there is no relationship between the firms. So, un-related diversification can also be called conglomerate growth.

Hence, you can select any of these strategies depending on your position in the market.

READ ALSO: 7 STRATEGIES TO POSITIONING YOUR BUSINESS IN 2020 [WITH CASE STUDY]

Some Ansoff Matrix examples in reality

We are going to list the different Ansoff Matrix examples in reality based on the component of the quadrant they best fit in.

Market penetration

Android is a good example of this. Apple and blackberry dominated the U.S smartphone industry about 12 years ago. But today Android shares almost equal amount of the market with Apple and we can’t find blackberry nowhere.

Product development

Smartphone companies like Apple and Samsung putting out new phone models every few years is an example of product development in the Ansoff Matrix.

Market development

A good example of market development strategy is PayPal. They initially started their service in the US and expanded to other countries. Another example is Apple, after releasing iPod which is an expensive device for music lovers. They released iPod shuffle which is cheaper and targets a market segment of consumers who love music but are less willing to pay a premium price for it.

Diversification

Alphabet incorporation exemplifies this. They started on the internet with google search but gradually moved into different markets, including the oil sector.

READ ALSO: FAST FOLLOWER STRATEGY: [DETAILED CASE STUDY]

Finally, the Ansoff matrix is good for startups, small business owners and big business owners. So, you need to know you position in the market and select the strategy that will work best for you.

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Mistakes you Should Avoid as a Start-up Entrepreneur.

Building a successful business─ whether it be online business or an offline investment─ demands so much discipline, extreme caution and proper risk management analysis.

You must have this at the back of your mind: every business is a risky venture, and to maximize profit, you must control your risk probabilities and minimize every possible cost.

In this article, I will be sharing what I may tag my life experience in business and how you can leverage on them when building your own business, and mistakes you should avoid as a start-up entrepreneur.

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Building a successful business whether online business or offline demands discipline, caution and risk management analysis.

You must have this at the back of your mind: every business is a risky venture, and to maximize profit, you must control your risk probabilities and minimize every possible cost.

In this article, I will be sharing what I may tag my life experience in business and how you can leverage on them when building your own business, and mistakes you should avoid as a start-up entrepreneur.

Being new to the business, you may be tempted to believe everything: from what you heard from your supplier to what your friends/families must have assured you about the business.

But in the business world, there is nothing like promise or trust, instead what you have is terms and conditions, and profit and loss.

When you carry out your business on trust, you stand a higher risk of losing both your money and whatever relationship you share with your client.

For every Cheque, transaction, and monetary expenses, please have a written agreement of your terms, conditions, and legal implications of such transactions. It is always safer to protect and preserve your business with a written agreement than to exchange words and curse your client for a trust-based business gone wrong.

This is the first entrepreneur start-up mistake to avoid.

  • 2. Never Run your Business without Proper Documentation.

This is the second entrepreneur start-up mistake on our list.

You will always have brilliant business ideas, and wonderful business inspiration, but the very moment you want to turn such ideas into a business where people can patronize your services or products, please, by all means, have a well-documented business portfolio for your business.

This document shall contain every legal validation that makes your business legitimate in your region; the services that you provide; and the privacy policy of your business.

If you do not want the government to pull down your sweat or for you to lose your millions in a legal lawsuit with your client, then you must by all means have all the necessary documents and approval before starting your business.

  • 3. Never Run your Business on Credit.

Every start-up business will always face the challenge of trying to win customers and make a profit. Sometimes some business owners will sell their products to friends, relatives, and families hoping that they will pay later or that they will win their patronage.

The reality is that it takes more to recover money than it will take you to put the right policy in your business. We all need customers/clients but nobody needs debtors in their business, so if any of your clients can’t pay for your product or service, then do not sell to the individual.

Tons of businesses have shut down as a result of debtors who never paid for the service or product they got or used. You may wish to take this point seriously.

This is another entrepreneur start-up mistake to avoid.

  • 4. Never pump-in all your capital at the start of your business.

Apparently you heard that business A is profitable and boom you invested everything in the business so that you can make maximum profit. Well, I have some bad news for you; this is exactly how many investors became bankrupt for life. Don’t become a victim of this entrepreneur’s start-up mistake.

Every business has stages─ spudding phase, consolidation phase, and the expansion phase ─ and you must monitor your growth indices and take adequate risk measures before determining whether to invest more or to maintain what is currently in existence.

Why do I suggest that you do not invest all your funds in a particular business? The answer is simple, every business is dynamic, and your predictions today may be right for one month but may fail after two months of operation.

The best alternative would be to invest 25% of your capital, then increase the capital only when you have strong and positive profit indicators.

  • 5. Never run your business with incompetent hands.

Business is a fierce battle, battle against loss, failure, competitors, government policies, and forces of demand and supply. And no matter how wonderful your business ideas might be, there is someone somewhere plotting something better to take your clients or improve on your services at a reduced rate.

Anyone who entrusts their business to someone who is not competent; someone who is not committed to the business; or someone who has a poor customer relationship, is most definitely joking with his or her business.

Business doesn’t respect any degree or faith but principles of wealth creation. If you joke with your business, you will lose your clients, funds, and your integrity as an individual.

Read Also: 500+ Business Plans

Conclusion

This topic entrepreneur start-up mistake is vast, but I shall continue to share tips that I believe will guide you as you navigate through the rough path of setting up your own business.

I must congratulate you for your bravery and courage to tow through this path, and I can guarantee to you that you will smile someday in the future.

Always remember, the economy belongs to entrepreneurs; and the world awaits your business ideas.

Till I write to you again, keep checking this space for business tips.

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Business strategies

product launch Strategy [10 best strategies with guide]

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product launch strategy

Every company deserves a launch, a great launch indeed. Irrespective of the size of the company. In fact the smaller the company, the greater and stronger the product launch strategy you should apply. This article will show you how to have a great product launch by applying the following product launch strategy.

Launching is not the same as product release, though when launching, you definitely would have a release date. Launching isn’t that 2 hours event you organize to create awareness for your product, then post on various social media and get people to come around and celebrate it. It can be better than that. A product launch strategy can be activated months, weeks or days before the product release. It doesn’t matter if its a book you want to launch, an app or services, you need to organize a great launch.

Read more: Why every brand or product needs a launch

According to Jeff Whatcott (@bcjeffw) Chief Marketing officer of Brightcove, a leading online video platform for publishing and distributing video across PCs, smartphones, tablets and connected TVs, a product Launch strategy can be implemented from two perspectives.
1. Externally
2. Internally.

Externally, it’s a public announcement that secures widespread coverage in the press and social media and builds your brand leadership position and drives a surge in demand for your products

Internally, it’s a massive rallying force that promotes alignment across the company and prepares the go-to-market machine to execute well.

This cannot happen in a day. Let’s get it started on how to have a great product launch that your market cannot resist. The following are the 10 launch strategies you can use

1. Take care of every registration:

Most people have created awareness for a brand or product without registering the brand, have not secured the domain name, no registered business name and other legal registration required. You could be running someone’s product name or brand name without knowing which can lead you to legal issues or your new names can be stolen and you’ll be made to pay thousands of dollars for a domain name from re-sellers which ordinarily would have cost less than 20 dollars. Secure your business names and put all registrations in place before launching

2. Create awareness:

Most people do this the wrong way. You first would have to define your target audience or market. Who is your product meant to serve? Where are they? Not necessarily a location. Can be a platform, groups and forums these audiences dominate. What type of information do they consume and from what source? Use those channels to bring awareness to them. You wouldn’t create awareness on Disney programs when your target market isn’t kids. You wouldn’t run Facebook ads targeting the whole country when your target is just citizens living only in the cold regions or business cities of that country. Creating awareness must be deliberate and calculated. With good awareness, you can create loyal customers.

Read more: 7 vital steps to creating loyal customers.

3. Educate the in house.

Before launching Externally, launch internally first. Prepare the in-house to be able to face whatever question that comes to them. Let the in-house understand every process and be carried along in every decision making especially those concerned with the go-to-market plan. In simple terms, get everyone on the same page.

4. Stir interest:

If launching doesn’t gain widespread coverage then, it’s not good enough, the purpose is to bring about a surge in demand for your product. Therefore the awareness should be able to stir interest and keep people waiting for the product release day. If this is done well, you can get people to pay ahead of the release date with a little subsidy in price as an “early bird” incentive.

Read more: Hidden sales secrets that increase profit

Be it a book you want to launch, a training service or a product, it works. Towards the release of apple’s iPhone 11 pro Max, the awareness was so strong that people were so interested to see for themselves. The goal is to create an expectation in people so much that they can’t wait to get the product. For Apple, this resulted in long queues in their sales shops that people had to put their footwears in the queue and went home for more than 3 days.

5. Timing is key:

This can work for your benefit or disadvantage. As a small company, you wouldn’t want to launch your product when another big fish in the market is launching theirs. However, one can leverage on big events like mother’s day to launch a great product for women or children’s day to launch a product for kids. Choose wisely. Missing timing can kill your product launch strategy

Build enough expectation and try not to be swallowed up by a bigger event, choose release dates that would favour your market.

6. Engage.

Create various platforms that engage your markets, they want to know the product features, how the services would operate and other various answers to their questions. Social media outlets can help engage the large audience.

7. Don’t Tell, Show It!.

Imagine doing a video on how your product solves security issue. An example is ring.com, apple exhibited by deeming their phone in water to prove how resistant it is to water. Have a demo if it’s an app people can play around and see for themselves. A picture is worth more than a thousand words, what then would you say about a demo or video. Creating a wonderful experience is the best storytelling.

8. Give chance for trial.

This might not apply for all products. It might go more for services than products. However, if you have an app and you’re confident about the value you’re offering you can give out some features for free or time-bound trial periods. It could be 3 days free trial period. Do this only if you’re confident have irresistible value! This can help you earn trust. This is called a freemium strategy, it’s a key to developing a good product launch strategy

read more: 4 Essential pillars to earning trust in business

9. Create urgency.

When people feel like they have an opportunity forever, they might never take action on it. So, create urgency. A simple way to do that might be asking them to pay earlier and have a 35% discount. Pay now and get an added value product. Whatever thing that would create urgency, use it to close the sales. Always remember that the purpose of implementing the product launch strategy is to create a surge in demand and enforce your brand to the market.

10. Start the next launch.

Be it an added feature to the previous release or an entirely new product. Keep launching.

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