With competition stiffening in almost every industry, analysing your competitors carefully is a key part of creating a unique offering. Here are the three components that a solid competitor analysis should have.
These days, there are very few cases of anything you might call a monopoly. It doesn’t matter which country or industry you work in, there will almost always be a suite of major competitors playing in the space.
But just because there are some large-scale competitors who have taken on the industry, doesn’t mean that they’re doing it right.
More often than not, existing products have different weaknesses that their users aren’t entirely happy with, leaving plenty of room for new offerings to surface and fill those gaps.
At the early stages of developing a business offering, one of the top priorities for founders needs to be a very careful analysis of all existing competitors – putting each and every element of the competition’s offering under a microscope.
With a solid competitor analysis, the new business can learn all it needs to know in order to arrive at the scene ready for action.
When discussing this topic with Victor Vicario, Director of Arc Hardware Incubator, he too believed that conducting such an analysis needs to be a priority for all early stage businesses.
“Early stage startups should place a strong focus on competitor analysis,” Vicario told The Pulse.
According to Vicario, there are three key factors that need to be considered when conducting such an analysis, which are: “timing of market entry, market penetration and uniqueness of product.”
If an early stage business founder can manage to analyse those three areas thoroughly, their new product should be able to compete easily against any existing offering within that industry.
Let’s break down these three areas further and explain what each one actually means.
Everything comes down to timing. Sometimes, an early stage business founder can have dotted all of their i’s and crossed all of their t’s, but because they didn’t time their entry to market well enough – they can still miss their real window of opportunity.
Identifying the optimal time to launch a product is difficult. With things changing by the minute – there are always going to be surprises which impact a business’ go to market strategy.
Since timing is very much out of (most people’s) control, it’s hard to say exactly what works and what doesn’t. But, based on Vicario’s experience in assisting very early stage ventures in their journey to market and beyond, he explained that one of most important things to avoid is rushing through product development in order to be the first to market.
“It is critical that corners are not cut purely to get to the market first.
“While being the first to market might seem like it could benefit the business in the short term, such a move could turn out to be fatal in the medium to long run.”
Vicario also explained that allowing others to launch their products first can often be “seen as an advantage” as it allows the founder to learn from the timing errors of the “market pioneers” and address them in their own offering.
Broadly speaking, market penetration refers to how successfully the product is sold once it hits the market.
After carefully analysing a competitor’s go-to-market strategy in order to learn from their timing mistakes and address them effectively, the next step of analysis is to observe how the market reacts to the product itself.
When analysing a competitor’s market penetration strategy in order to perfect your own, there are a number of key focal points that need to be emphasised. Areas like commercial and pricing model, product- market-fit and the competitor’s ongoing marketing strategy all play an important role in ensuring that a new offering is as robust as possible.
While the first two areas of focus were more about things that were external to the product or offering itself, Vicario’s third suggestion was far more product-centric – identifying the offering’s uniqueness in comparison to its competitors.
The only way to make a new product or service stand out from what’s already out there, is to find a true point of difference.
This point of difference doesn’t have to be earth-shattering, but it does need to be something that truly set the offering apart from its competitors.
While running the competitor analysis, the founder needs to dissect every element of its competitors’ businesses and find the gaps.
This can be done through reading all the available online literature, looking into their social media reviews, or simply running surveys that directly ask these question to existing customers.
If you can manage to find a niche in the market that hasn’t been previously addressed – you should be very well placed to set your own offering apart.