Business competition situation

Competition in business environment is inevitable. There are many companies produce the relatively similar product or service and distribute It at the same market.

I illustrate how tight is business competition in the market, and show you with the real world condition. You can see at supermarkets near you, they are in very tough competition with each other just to deliver the best value and the best offer for their customer in their same area.

Consequently, they compete strictly to entice more customers. There are several strategies they run, such as: offer larger range of product, offer the best price by running competitive pricing strategy , build more convenient place for consumer, perform personal marketing approach, develop customization of product or service, try to give the most quality post-sales service, and so on.

Every firm must meet and deal with very tough competition in business. However, there will always be opportunities behind this condition.

How to win the competition? First of all, you have to understand one of the subject in marketing theory, namely competitor analysis or competitive analysis study. Then you can implement the theory in your business activities.

Survive against competitor by performing competition analysis

By performing competitor research, you can identify better strategies for winning the competition in this turbulent time.

These strategies can be developed based on what type of product or service you deliver, the location, who your competitor are, etc.

You have to possess positive thinking. Just put in your mind that tight competition keeps you hungry for innovation. It forces you find new method, new tactics, new product or service, and gain the newest competitive intelligence and related knowledge.

To survive from this situation, all you need is comparative research and analysis knowledge and skill. After that, you must implement the theory in your real business ecosystem.

For the purpose of that, therefore I am writing this article.

Why conducting competitor analysis and study is important?

You have to perform competitor review and evaluation because:

1. You must know who are the main player in your target segment.

2. You must be prepared for the environment and business ecosystem’s changes.

3. To understand more comprehensively what the is the exact competition and how to compete with them.

4. To define life-cycle product or service ( business ) stage, like: emerging, growth, mature, saturated, declining.

5. To gather the correct information, so that you can decide which value added ( competitive advantages ) you can deliver to your target market.

How to conduct competitive analysis?

Before getting more detail, I show you the general ideas. First of all you have to be able to identify the exact competition in the market, then gather the correct information that you need, afterwards run competitive assessment based on data you gather, final step is drawing a conclusion.

In competitive assessment step, you need to answer several questions, they are:

1. Where do the consumer purchase the similar product?

This includes distribution channel, online store or offline store, outlet location, local or global ( international ) delivery, etc.

2. Is there opportunity for my product in this segment market?

The object that you must assess here are: product quality, product distribution, price, product differentiation, brand recognition, new product development, financial capability, quality of management, quality of service, market share, and so on.

3. What competitive advantages do my product deliver?

You must do a benchmarking your value with your competitor in competitive advantages exploration stage.

Once you found there is a gap between customer need and your competitor’s delivery ( or treatment ), you can serve this thing to the customer to make you set apart from the tight competition.

4. How should I be positioned in the segment market?

You can read my previous article that is related to market positioning basic theory for more understanding.

Above are sample questions in the competitive assessment phases. You can read more detail here: conducting a competitive analysis – is there room for your business?


After overview above, I show you more action to conduct competitive study and evaluation below:

1. Define your key competitor.

Focus on three up to five competitors.

2. Perform business intelligence and analytics to gather detail data especially your key competitor’s data.

The data which should be collected are: financial data ( you can see this at their financial statement or financial report ), product or service ( function, feature, usability, pricing, distribution type, etc.), marketing scope or marketing mix, their strategy, their core competence and value added.

3. Do a benchmarking.

You have to make comparison with them apple to apple ( apple to apple comparison method ).

You can do this by utilizing business intelligence software. The things that are compared:

a. Pricing

b. Revenue

c. Market share

d. Type of product or service

e. Success factor and strategy

f. Marketing and promotion activity

g. Brand recognition and reputation

h. Technology that they use

i. Manufacturing and distribution channel

j. Resources ( human resources, building, asset, budget, etc. )

And many things you can compare based on your goal of analysis.

Competitor analysis examples

In this section, I will show you SWOT analysis example.

What is SWOT analysis? SWOT analysis is the assessment of the internal factors and external factors to pursue an opportunities.

The internal factors are strengths and weaknesses, whereas external factors are opportunities and threats.

Internal factor objects are staff / human resources, culture, finance, production ability, pricing strategy, and so forth.

External factor substances are micro environment, macro ecosystem, political things, regulation, social and cultural nature, customer behavior, customer buying process, competitors, supplier, reseller, distributor, and so on.

Please observe the picture below, below are SWOT analysis examples for Nestle ( Consumer good sector ). Source data from wikiswot.com

Summary

By adapting and facing the business competition, you can grow your business. But strong competition analysis and competitive strategies are needed.

Through comparative research and analysis you can provide a product or service that is different from others.

You can develop competitive advantages and distinguished value added that will be delivered to your target customer. It means you can provide a solution better than your competitor.