When you’re running a business – or just thinking about starting one, it’s vital to know who the competition is. However solid your customer research, and however well your products are tuned to the priorities and aesthetics of the segment you’re targeting, the effort is wasted if all those needs are being met by a packed market of other brands.
Starter businesses don’t necessarily know how to do competitor analysis – it’s a very different set of skills from creating a product and the business around it, and learning those skills or making permanent hires may not be a good use of resources – taking on these additional personnel is something businesses do as they grow, with only the largest brands having their own, in house, market research capability. For you, it likely makes more sense to look to consulting agencies to fill this skill gap. You might think of consultants as equally a luxury for big brands but it’s a sector that’s in growth, and there are many smaller agencies catering to businesses in different industries and at different levels of development, so you will likely be able to find someone who meets your needs to provide specialist intelligence.
Who Are the Competition?
The first step is to identify who your competitors are. You need to know the other major brands in your space, as well as the newcomers like you who are going after a chunk of their market share. This is the easiest step in the process to accomplish and you may already know much of this information.
What you then have to do is prioritise them: who are the biggest threats to you? And who are you going after? If you’re selling furniture, another small bespoke furniture maker on the other side of the country isn’t as much a threat to you as IKEA who have an international presence through widespread physical stores and online shopping. Conversely, the recent problems with John Lewis’ brand suggest targeting their dissatisfied audience could be productive!
Applying Your Insights
The most important thing you can do to turn this research into tactics for your business is identify areas where you can stand out: what do you do (or could you do) that these competitors aren’t? Where is the white space that you can occupy to allow customers to see your offer clearly? And how can you use your marketing to differentiate yourself meaningfully and persuasively in a crowded marketplace? The solutions to these problems all flow from that initial research, making it something you really can’t afford to do without.