Competitor analysis
Wondering what the competition is like in your industry? By conducting a competitor analysis, you can get the answer to exactly that!
What is a competitor analysis?
A competitor analysis is a method where the main focus is to analyze competitors in the industry. The analysis identifies the company's main competitors and evaluates strategies, market position, strengths and weaknesses in the industry. Porter's five forces analysis is an example of a competitor analysis. This method of analysis focuses on 5 factors that provide insight into the competitive strength of the industry. In addition to competitor analysis, it will be essential for the company to conduct a situation analysis to obtain comprehensive insights on both micro- and macro level.
Why should companies conduct a competitor analysis?
- A competitor analysis is essential for companies for several reasons:- The analysis can help show the profitability of the market. For example, it can reveal whether the market is saturated (a "red sea") with high competition, where it is difficult to stand out among competitors.
- Results from the analysis will provide guidance for developing a competitive strategy that exploits market gaps and creates competitive advantage. Market gaps can be unmet customer needs or unsatisfactory products.
- The competitor analysis also helps identify potential threats that competitors may pose to your business. This can include, for example, threats of price wars.
In summary
A competitor analysis can be a valuable part of strategic planning for your business to succeed in the market.
