Competitor Analysis for Businesses
In order to be the best at what you do, it’s important to understand what your competitors are doing – and how your business can do it better. Competitor analysis for businesses allows you to look at the current financial landscape to understand how (or even if) others are succeeding in the same field as you. This is accomplished by three primary channels of examination. To successfully compete in business, you need to understand: your market, your competitor and your customers. These three key areas are the cornerstones of the competitor analysis you will put together – and, as a result, are the keys to your business’ success.
The Pro-actions business coaches are experts at consulting with SME owner-managers like you to create competitor analysis reports that will inform your business decisions now and in the future, helping you to drive success for many years to come. With professional and focused marketing segmentation, you will better understand your customer segments, as well as how your competitors are engaging with them. A vital part of competing in business, and doing so successfully, is to understand how the market and your customers function, and how you function within those processes.
To get an immediate understanding of how your business is performing and how you could be competing in business even more effectively, you can take our Business Health Assessment. It’s quick, free and easy. With this, you’ll receive advice and recommendations about your own business, so you will be able to much better understand how you sit within any competitor analyses you carry out.
What is Market Segmentation and Why is it Important?
To define market segmentation is straightforward, even if understanding what it means may not be so straightforward for you – at least, not right away. By definition market segmentation is the first way to start identifying your target market within the wider audience. You can break down customer segments based on a variety of factors, depending on what is most relevant to you, such as demographics, behaviours, life events, purchase situations and the benefits individuals are looking for from your products or services. Identifying these characteristics is a huge part of marketing segmentation, and once you recognise what your customer segments are looking for, you can tailor your approach accordingly.
By defining market segmentation, it’s clear why it is so important. Hopefully, you can recognise that by understanding your customer segments’ needs and wants, you have the knowledge to be able to offer that. This makes your business much more desirable, as you’ll appear to your recognised audience segmentation as a valuable asset since you can provide something they want or even need. This will, in turn, help with your competitor analysis. Since you have a defined customer segment to draw upon, you can more easily recognise the other businesses that this audience segmentation will be drawn to. By understanding this, you will have the information to compete in business more informed and more effectively.
This is an important part of your marketing plan and competitor analysis overall, which needs to demonstrate both your expertise in your particular market and the attractiveness of the market financially. You need to know your target market, its needs, where it is and how you will reach it.
The first step is to define your target market. You need to know what the people and/or businesses who would be interested in buying your products or services are like. And how many of them there are. You need to demonstrate the market needs. Or in simple terms, you need to know why they buy! You can carry out target market segmentation to break this down based on key behaviours or interests, and use these potential customer segments to inform your plan for competing in business.
Then you can make projections about your target market size and how much of your products or services they might buy. Also what is the likelihood of your market being affected by future demographic shifts, economic events, government policies or regulatory changes? By researching and understanding clearly defined customer segments, you are protecting yourself against change by ensuring you will be aware of any fluctuations in your target market. This means you’ll have increased preparedness compared to your competitors, allowing you to compete in business more reliably and consistently.
You should strive to be better than your competitors, and that means you need to know what they offer and how they work. Competitor analysis is, therefore, a key part of your marketing plan if you want to succeed. To beat the competition, you have to understand them and get inside their heads. Get obsessed with your competitors and anticipate what they will do almost before they know themselves. With a thorough understanding of marketing segmentation that takes into account not only audiences but also the other businesses targeting them, you’ll have a surefire way to stay on top and ahead of the game.
Look at your customer segments, identify competitors in each, and work out which areas you should be measuring against yourself. This will give you the knowledge as to how to improve your services. Once you understand what your potential customers are looking for within your audience segmentation, you need to understand if your competitors are providing that effectively or not. If they are, how can you do it? Why should those people in your target market segmentation choose your business over someone else’s?
You should build a competitive strength grid as part of your business competitor analysis. Define the key assets and skills necessary to succeed in your sector. Then list your major competitors, their assets and skills, and how your own company fits on this scale. This will help you to determine where you stand in relation to the other businesses competing in your industry. Taking a comprehensive look at the market segmentation from all sides will mean you can compete in business – and win.
A market segment is a subgroup of people or organisations, sharing one or more characteristics. Generally, they will have similar product and/or service needs. The purpose of creating segmenting your customers is to ensure you gain a better understanding of who they are and what motivates them to purchase your products or services.
You should identify groups of current and potential customers to:
- Prioritise the groups to address
- Understand their behaviour
- Identify the appropriate marketing strategy
With this information in mind, you can make more effective decisions. With clear customer segments in mind and driving the direction of your business, you can be sure that you’re heading towards success. Carrying out a comprehensive market segmentation allows you to understand the people you’re trying to target, as well as gain insight into how your competitors may or may not already be doing this. Now you know the needs of your target market segmentation, are they being met already? Could this be achieved more effectively? You’ll have the information you need to answer these questions and respond accordingly so you can compete in business to your full potential.
Compete in Business with Pro-actions’ Support
If you’re looking for guidance and coaching to help you compete in business more effectively, whether through competitor analysis, understanding customer segments or any other areas you need support in, why not contact the Pro-actions team?
We’ll offer your and your business the friendly and professional support you need complete market segmentation, competitor analysis and enable your company to compete in business with the very best.