What does competitive analysis contribute to a business strategy?
Competitive research is vital in developing a business technique for any organization. The administrators of any business must know all about their competitors in the industry that they are managing. It is also vital to have enough knowledge about the competitors’ business and practices, which will definitely help them to set up an ideal strategy for the organization.
By knowing and analyzing the immediate competition, this will enable the company to develop a clear, focused, and ideal strategy that will help them gain the competitive advantage.
Now there are some questions that a referring organization needs to ask the consumers they work with. The list below is not restricted to only these. You may think of other important questions to ask, as well.
a. Identification of the competition
The first element first is that the organization must be well conscious of its industry’s competitors. This will not only help those in the organization figure out the ideal stategies or techniques for the organization but by having an understanding about the firm’s competitors, the organization can figure out the firm’s present location in the market, evaluate its income to the competitor’s income, and make plans to surpass them.
You can learn more about your competitors by one of two ways. First, you can look at your marke from the customer’s point of view and by grouping all competitors of your company by what degree they compete to earn potential customer’s money. Second, group any competitors you have by their competitive strategies which will enable you to learn and understand what their motivation is.
b. The firm’s location in the industry
It is best to know about the present standing/position of the current and future organizations prior to coming up with an ideal strategy. Different organizations need different techniques according to their present opportunities. For example, a different promotion mix or buying mix can be decided for organizations with different opportunities in their specific businesses.
You must learn about their strategies, as well as identify areas where they may be vulnerable before you can move forward with plans to improve your business. Once you know their strengths or weaknesses, based on the presence or absence of sills and assets needed to compete, you’ll have a better idea of how to move forward.
Concentrate your efforts at improving your company by answering the following four questions:
– – What makes a company successful or unsuccessful?
– – What are the prime motivators causing customers to make purchases?
– – What are the major component costs for products being made?
– – What are the mobility barriers for the industry?
Answering these questions, and any questions you may have that pertain to your specific industry, will help you determine what steps you can take.
c. The capability to contend within the industry
There are organizations that have been in the market for a while and which are not simple to defeat. These involve such organizations, which have devoted clients who are not willing to swap to other providers. Therefore, all this is necessary prior to make any necessary technical changes for the organization.
What companies seem to have a very loyal customer base? Coca-Cola, Microsoft, and Apple. Their customers, as a general rule, will stick with the company and purchase any new products they put out. Whether it’s a new flavor of Diet Coke, the newest version of Windows, or the newest Apple iPhone, people tend to continue to buy the things that they like. It is helpful to determine what changes in your own products can be made which will entice customers to leave their favored company and try your products.
Products – Perhaps there are some issues related to a competitors products that current customers aren’t happy with. Make an effort to address those issues in your own products. You may find that customers are willing to give yours a try if they see the product is better.
Distribution – If your product has had limited distribution, can you increase the distribution area so more people can get a product they haven’t been able to?
Pricing – Some people complain about how much a product costs. If a company can make a similar product, for less than the most popular, and get the price down, customers may decide to switch.
Promotion – Consider a new promotion for new products which focus on improvements, pricing, and benefits to using it. A great promotion can help encourage customers to give your products a try.
Advertising – The right advertising campaign can make a world of difference when comparing products from your company with your competitors.
The bottom line is that if an organization wants to obtain very competitive benefits in its market, it will have to have the most appropriate strategies for its business and those strategies can be acquired through properly assessing its competitors and making changes to improve its own standing.