Reasons Why You Should Do A Competitor Analysis For Your Business

Whether you are a solopreneur or a large corporation, understanding your competition is vital, regardless of your business size. Before you tell us why it is essential to understand your competition, we will let you know what a competitor analysis is.

What is a competition analysis? A competitive analysis compares your company to other companies in your industry. Businesses in a similar geographic location may also target similar customers with products, services, and marketing strategies similar to your business. Here, we will give several reasons to analyze your competition.

1. Understanding your competitors helps you better understand your business. Understanding your strengths and weaknesses will help you make better decisions and minimize errors. As a result, you will know the strengths and weaknesses of your own business. 2. Conducting a competitor analysis will help you gain more knowledge about your industry, which you can share. You become an expert and an authority that enables you to build trust with your clients. You can also share the knowledge with your staff; this helps develop learning and appreciation for your business

3. A competitive analysis helps you identify gaps in the market, in a specific geographical location, in product offerings, prices, or sales in a particular target market. For example, one competitor may target youth, while none of its competitors modify the product to target an older demographic. 4. A competitor analysis identifies your unique selling proposition (USP); by analyzing and evaluating your competitors, you can determine the difference between your and your competitors’ offers. Answer the customer’s question: Why should they buy from you and not the competition? 5. Understanding your competition is not only about analyzing companies of the same size as yours; if your goals are to grow, it is also essential to observe larger competitors to emulate their victories and avoid costly mistakes. This allows you to identify growth opportunities and internal and external development areas. In the same way, this works for smaller companies, those that you consider too small to consider a threat. It’s essential to keep an eye out for businesses smaller than yours, as they have similar goals and want the exact results you want. 6. A competitor analysis can help structure your marketing. You know what keywords or marketing channels your competitors use. When you understand where your competition spends, you can understand the marketing cost and how much they spend to acquire new customers. You can identify a gap in the marketing channel, allowing you to target a different market in another way.