Completing a competitive analysis is an important part of running any business. Before you can set yourself apart, you must first identify others in the market. There are two primary members of any competitive market: direct vs indirect competition. In order to help you understand the various forms of competition and more, we have compiled a competitive analysis guide below.
Step 1: Conduct Research
The first step to any competitive analysis is to conduct research. This is how you will compile a list of your competitors. To start off, you should look into the top ten companies in your industry. To start a clothing company, make a list of the closest competitors. Additionally, you should locate businesses of similar size and merchandise. Determine the range of products and services each company offers so that you can see where your organization fits in.
Step 2: Direct Vs Indirect
Direct vs indirect competition is an important distinction when it comes to a competitive analysis. Direct competitors are the companies that you need to research the most because they are the primary alternative for consumers are making a purchasing decision. Indirect competitors are the businesses that offer alternative products or services. Although they are not the most immediate threat, it is still important to keep an eye on indirect competitors. Categorizing these different types of businesses will be helpful when you move on to step 3.
Step 3: Analyze Competitors
Once you have listed and categorized your competitors, the next step is to analyze them. This will help to determine how your business stacks up against them in the market. First, consider the features that are most important to the consumer. Cost, quality, service and reputation are all important factors that may play into a purchasing decision. Then, look into the business aspects of each organization to see how your compares. Finally, upgrade your management leadership training to compete with your industry standards.
Step 4: Identify Your Niche
Once you have a strong idea of who your competition is, it is time to identify your niche. Your niche or unique selling proposition will help to set you apart. Whether it is among direct vs indirect competition, you want to stand out. Be honest with what you have to offer. Make sure that it is unique and appealing to your ideal consumer. If you can highlight and promote a major selling point that the competition cannot, you will be ahead of the game.
Step 5: Consider Improvements
Finally, the last step of conducting a competitive analysis is to consider how you can make improvements to your business. The point of looking at these different companies and competitors is to see where your can surpass them. Looking into the direct vs indirect competition also helps to show what products or services you may be missing. Consider how you can provide consumers with a better experience than other companies and begin making those improvements how ClearTrust does.
Understanding direct vs indirect competition is just a small part of completing a competitive analysis. In order to identify your niche and make improvements, you must first look into what companies and businesses you are competing with. By keeping an eye on these different organizations, you can ensure that your business is always working to surpass their success.
Image from http://mobile-cuisine.com/business/direct-and-indirect-competitors-for-your-food-truck/