Currently, in almost every business sector, besides your enterprise, there will be individuals or other businesses providing the same product or service, or serving the same customer segment with equivalent prices. By analyzing competitors, you will obtain important information to identify and address your sales campaign and leverage advantages to compete effectively with rivals. Why is competitor analysis important? What are the competitor analysis tool? Let’s analyze and find answers to the questions in the article below together with Optimal Agency.
Why is analyzing competitors important?
Analyzing competitors is the process of identifying and evaluating businesses operating in the same industry, providing similar products or services as your company. By comparing and evaluating competitors based on predefined criteria, businesses can “know the enemy, know yourself,” thereby proposing appropriate strategies for improvement and development. An effective competitor analysis strategy will help businesses clearly define direction and decide to invest in the most important areas to enhance performance and competitiveness in specific markets as follows:
Analyze competitors to capture the market: If your competitors are ahead, they may have achieved success and have a loyal customer base. By analyzing business strategies and marketing campaigns, you will have an understanding of the consumer behavior of the target audience. Additionally, competitor analysis helps you accurately capture the ideas and trends happening in the market. If you conduct a thorough analysis, you can predict and stay ahead of new trends.
Understand competitive rivals: When analyzing a competitor’s website and the social media channels they are using, you will gather information about their strengths and weaknesses and identify their strategic objectives and deployment methods through each stage of development. From this information, you can make assessments of opportunities, and challenges for your brand, thereby building the most suitable strategy to compete effectively in the market.
Predict and prevent risks: Analyzing competitors helps identify their strengths and weaknesses and provides an opportunity to understand the threats and challenges they pose to your brand. Understanding these factors, businesses can prepare and implement preventive measures to deal with unforeseen situations, increasing the chances of success and minimizing risks in a fiercely competitive environment.
Seize the opportunity to “grab” the excess: Thorough analysis and identification of segments that competitors have not fully exploited are an opportunity for your brand. By seizing these areas and quickly “filling” those gaps, you can create new business opportunities. This can help your brand reach a new customer base, expand the market, and increase the chances of success in a competitive environment.
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Types of competitors
Direct competitors are those that each offer similar or equivalent products and services and target the same customer group. This means they often operate in the same market segment and compete directly with each other to attract and retain customers. Direct competitors often view each other as direct risks to their businesses and often apply direct competitive strategies to capture market share.
Indirect competitors are those that offer similar products or services but target a different target customer group. Even though they don’t directly offer products or services to the same audience as you, they can still influence your business by attracting a portion of your potential customers. Indirect competitors often create a more complex competitive environment, making it more difficult to identify and implement competitive strategies than direct competitors.
Potential competitors are businesses or products that have the potential to impact your business even though they don’t sell the same product or directly compete with you. Frequently, these competitors operate in other market segments but still can attract a portion of your potential customers or cause negative impacts on your market share without having to compete directly with you. Potential competitors can also be businesses operating in other industries but still can expand or innovate to become a direct competitor in the future.
Competitors as partners are an important concept in the business field, especially in competitive analysis and corporate strategy. A competitor is not simply an opponent but is also seen as a partner that provides opportunities to learn and grow. By capturing and analyzing competitors’ behavior and strategies, businesses can gather valuable information to improve their strategies and increase competitiveness in the market. At the same time, viewing competitors as partners also helps promote creativity and innovation in businesses. Thereby, creating better products and services to meet customer needs and dominate the market effectively.
Competitor analysis tool 2024
To make it easier to analyze competitors, people have now developed tools to support detailed and effective competitor analysis to help save time and effort for businesses, specifically as follows:
Rival IQ
Rival IQ gives the ability to research the performance of their social media channels and those of their competitors. This tool allows you to track and evaluate the content and engagement of posts from competing companies, and see how they attract the attention of new followers. You can also increase your social media activity by recognizing and using trends and hashtags that your competitors are using successfully. As for cost, Rival IQ offers a 7-day free trial with no credit card information required. After the trial period, the service costs $199 per month.
Kompyte
Kompyte is a useful tool that helps you track and analyze changes your competitors make to their websites, products, and digital marketing campaigns. With Kompyte, you can easily track changes on your competitors’ websites in real-time, receive alerts as soon as they launch new ads, update rankings on multiple search engines, and provide detailed analytical information about your competitors’ content strategies and blogs. In terms of cost, you can use the service for a 14-day free trial without having to provide credit card information.
In the article on Optimal, we shared detailed information, hoping that this can help you learn about the importance of analyzing competitors and choosing the right tools to support the analysis of successful competitors.
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Frequently asked questions
Step 1: Identify competitors: Identify the business’s direct and indirect competitors in the market.
Step 2: Collect information: Collect information about competitors’ products, services, marketing strategies, and business performance.
Step 3: Analyze strengths and weaknesses: Analyze your competitors’ strengths and weaknesses to understand their competitive basis.
Step 4: Assess the level of competition: Assess the level of competition of each competitor based on the information collected.
Step 5: Devise a strategy: Based on the analysis results, devise an appropriate strategy to improve the competitive position of the business.
Competitor analysis on Google is the process of researching and evaluating the activities of competitors in the business field on the Google search platform. This includes analyzing the keywords they use, the ads they run, and their position in search results. This way, you can better understand your competitors’ marketing strategies and find ways to improve yours to compete effectively on Google.
