Competitor research is a very important part of your business plan, if you do not conduct it correctly you could be wasting your time and money. Read on to discover why, and learn what to avoid when conducting competitor research.
What is competitor research? Competitor research can be described as the process of determining how effective or efficient a particular organization is, by assessing their products or services against their competitors. When a company provides goods or services that are offered in a highly competitive market, they will obviously compete with other firms, who are also competing with the same product or service. The way to measure the efficiency of a company is to compare their products or services against their competitors, and find out which ones are actually more effective than the others.
Why is it so important to conduct this type of research? There are many benefits to conducting competitor research, but perhaps the biggest benefit is that it enables a company to identify where they need to improve, and how they can do this. It also helps identify the weaknesses in their products or services, and then how they can better meet the needs of the public. This makes rival analysis an extremely important element in any business plan.
One reason it is so important to conduct this type of research is that certain organisations rely heavily on product sales. If the competition for these customers is fierce, then it is unlikely the company will be able to offer the best product or service, and that could have serious consequences.
Competitor research also helps to identify the strengths and weaknesses of an organisation. If the organisation is able to show that they have developed key areas of weakness, then they will be much more likely to receive bids from other companies for new business.
Furthermore, a company’s ability to compete will depend on a number of factors, including the level of competition in the market, the level of quality in the products or services they offer, the level of support received by the customer, and other various market conditions. It is essential that a company is able to identify and avoid these factors in order to achieve success. A company will also be able to develop their product or service to become more competitive in the market, and so become successful in their own right.
The first thing to consider when conducting competitor research is a good level of cooperation between all parties involved. There is no point in having to pay for the research if the other organisations involved are unwilling to contribute.
The next thing to consider is the cost involved, and this will vary according to the level of research required, but it should be reasonably low if the company has undertaken a similar investigation in the past. Also consider whether the market is competitive enough, and what level of competition a company is currently facing. If the market is a very competitive one then you will need to conduct a greater amount of research.
Research should also consider what the goals are behind the research, and what the objectives are for each phase of the competitor analysis. It may be necessary to collect financial or other supporting evidence in order to determine what these goals are.
When performing competitor analysis it is important to look at the company’s market share, and the volume of sales they generate. If the company is well established and has a large market share, then it is likely that they will be well positioned to attract new business. However, if the market is extremely competitive then it may be more difficult for the company to make profits and to keep up with the competition.
Therefore it is vitally important to understand what the competitive marketplace is like before embarking on any competitor analysis. It will be of utmost importance to make sure that the research conducted is thorough, and that the company takes the time to understand the market before entering into any contracts with suppliers or competitors. It is also important to remember that not all competitors are the same, and there may be some that are less profitable than others.
Finally, research the competitors carefully before entering into any contracts with them. It will be of critical importance to the success of the company if the company were to be forced to sue competitors for breach of contract after having conducted competitive research, because the research was carried out based on false information, and wrong assumptions.