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Executing Competitive Analysis to Edge out the Competition
Jim Cory / REMODELING / September 19, 2013
It’s hard to differentiate your company from others if you’re not aware of what they’re doing in the market
The owner of a Canadian pizza chain made a practice of climbing in his car on garbage day to survey stacks of discarded pizza boxes. He wanted to find out what was going on in the pizza market.
Toronto management guru Sam Geist uses that story to make the point that assessing competitors “should be like turning on the lights every day.” Most businesses, he says, were built around a niche or advantage that the founder perceived as missing from the marketplace. A mistake many make, he says, is to assume that their competitive advantages will be there forever.
The truth is that competitors have an interest in taking that advantage away. And they can easily do so if you don’t pay attention to what they’re doing. “You have to know who your competitor is,” Geist says. “His strengths and weaknesses. Your business depends on that point of difference and what you’re doing.” By analyzing and evaluating competition, “a business owner is sharpening that point of difference by looking at and understanding the choices consumers have to make when they’re thinking about buying your product or service,” Geist adds. Ignore competitors, he points out, and the smart ones will take business away by knowing what you do and copying it or going one better.
Tool to Manage
Competitive analysis—a management report—provides a comprehensive, ongoing way to assess competitors and your own company’s standing in the market. To prepare a competitive analysis report:
- Find out who you compete with. Make a complete list of companies you go head-to-head with every day. Start by asking salespeople and customers. “When salespeople are in the house, they’re going to find out who else was there,” says St. Louis sales and marketing consultant Rick Menendez. Another way to know is to launch a Google search of your product or service plus location. If you’re an ABC Seamless or a Hardie dealer in Mankato, say, type in “Siding Central Minnesota” and see who comes up. “Look at who’s advertising heavily on television and radio,” Menendez suggests. Also, ask subcontractors who they consider as players in your market. And check listings in your local business journal. Every competitor may not have a website, but that doesn’t mean they’re not taking your business. You can push your competitive analysis deeper by hiring a marketing firm to do a double-blind marketing intelligence survey of area consumers. That kind of survey will give you solid information about competitors and how your company is perceived in the market.