Keep Your Business Ahead of the Competition

We all know that we live in a competitive business environment. A simple internet search will reveal a multitude of possible companies locally, nationally and internationally, all offering the same or similar products/services.

The recent recession also changed several industry landscapes, with closures, mergers and acquisitions; so how confident are you about your industry landscape and where you are positioned within it? And, how can you use competitor research to stand out from the crowd, ensure you stay at least one step ahead of the competition and help protect the future of your business?

Why Conduct Competitor Research?

Competitor research involves finding out information to enable a clearer understanding of the market in which your business operates. This in turn can help to inform business decisions regarding the future direction of your business and how you communicate with your customers.

There are many reasons why businesses conduct competitor research for example:

• To understand who they are competing against (this could be locally, nationally or internationally)
• To understand how other businesses are positioning themselves in the market
• To determine how they will position themselves in the market going forwards
• To highlight any gaps in the market
• To understand the potential of launching new products/services

·    

Who are your Competitors?

The first step in competitor research is to define and understand who your main competitors really are. Whilst the most obvious competitors are those providing an equivalent product/service within a set radius of your business, there are a number of factors to consider such as:

• Geographical Area – This will be influenced by the type of business and the products/services provided. If the product can be packaged and distributed easily and cost-effectively the geographical area to consider will be wider.
• Size of Company – The size of a company may influence their ability or willingness to meet customer requirements efficiently and effectively. For example, it may not be cost-effective for a large manufacturer to produce a bespoke one-off product for a customer and therefore would not be considered a main competitor to a smaller manufacturer that focuses more on these bespoke products.
• Products/Services – Whilst there will be companies who offer an almost identical product/service to your business there are also likely to be companies who offer a small element of the same products/services as part of a wider or differentiated offering. This may not form a major part of their business at the current time but it is still important to understand where they fit into the market.
• Substitute Products/Services – Consider what your customers might buy instead if they don’t purchase your product/service. All forms of sporting activities could be classed as competition to each other but then so could watching television, arts and crafts, listening to music or simply relaxing at home as consumers will choose between these activities to fill their spare time.

How can you conduct Competitor Research?

Having determined the criteria for defining your key competitors, it is important to have a clear objective to ensure you are collecting the most relevant information through your competitor research. There are a number of factors to consider, dependent on what you are looking to achieve from your research, these include:

Factor	Rationale
Products/Services Offered	Is there a gap in the market? Is there an overload in certain sectors of the market?
Accreditations	Are there any accreditations that would benefit your business & help you stand out from your competitors?
Positioning	Is the company focused on price / product / the customer or is it customer-centric?
Guarantees	Offering a guarantee provides reassurance to customers that they are choosing a company that values customer satisfaction & quality
Machinery	What capabilities do they have? Will their machinery need to be updated in the near future?
History	Credibility & trust from customers prospective or new, dynamic and fast moving
Industries Covered	Are there any particular industries or types of work that the company focuses on?
Types of Work
Turnover/Financial Stability	To gain an understanding of where your company fits into the current market and if your competitors are in a position to invest in machinery/infrastructure if required.

There is also a wide range of information sources, each able to provide a slightly different perspective of your competitors. The selection of information sources to use for your research will depend, in part, on the customer type and how they are most likely to search for information.   

• Website - For many customers, both Business-to-Business and Business-to-Consumer, the internet provides the initial source of information and therefore company websites provide the opportunity to view your competitors and your own business through the eyes of a potential customer. The information available from websites varies dramatically between companies but will often prove to be a good initial source of information.
• Company reports – If you are making business decisions regarding significant investment in machinery, infrastructure etc. company reports can provide a good indication of how your competitors would be able to react to this.
• Social media – How are your customers/prospects interacting with your competitors? Social media is often used as a tool for sharing experiences with others, both positive and negative, and can therefore provide valuable insights into how your customers/prospects view your competitors.
• Trade publications – How is the industry portraying different companies? Trade publications often feature case studies highlighting how companies have approached a particular issue.
• Mystery shopping – Sample your competitors levels of customer service, product knowledge and processes by acting as a potential customer.

What do you do with the results?

The analysis of the results will depend in part on the nature of your competitor research, the quantity of information and the initial objectives of the research. For example, the presentation of the results may take the form of a matrix through which it is possible to identify a gap in the market or areas that your business is not currently capitalising on, such as company accreditations.

Following analysis of the results of our research, a number of questions can then be assessed to help form the basis of future business and marketing strategies. For example:

• How are we positioned (customer perception) in the market? E.g. Are we Lidl or Waitrose?
• Are we offering the correct mix of products/services?
• Is there another product/service we could offer?
• How do we compare with our competitors with regards to pricing?
• Do we communicate with our customers effectively?
• Are our customers (and competitors) using the same social media channels as us?
• Are we offering our customers something different to our competitors?

Having conducted competitor research and acted upon it accordingly, it is also important to reassess your competitors on a regular basis to ensure you stay aware of any changes they make which could impact on your business.

If you would like to discuss how competitor research can help your business, give us a call today.  

Karen Munson is Strategic Officer at Enterprise Marketing Solutions and contactable on 01296 695635 or Karen.munson@enterprisemarekting.co.uk.