One of the growth strategies in business is competitive market analysis. In simple words it is defined as the capability of a company to flagging the competitors in the market and devising ways to compete successfully. It plays a significant role at each step of the business development. You are trying to adopt a business, thinking to expand your business or drawing a business plan, market competitors’ analysis will play a key role in formulating the informed decisions.
Following points need to be taken in to consideration during competitive market analysis:
- Recognize the companies that are your direct competitors.
- Describe the concentration of the market such as small number of large players or vice versa
- Measurement of the prevalence of the market’s competitive intensity
- See if the ease of the market entry brings the prices down in the market.
- Illustrate the competitive strategies of clients against the competitors as well as their products
When it is about business growth strategy under the banner of competitor analysis. It is assessment of the strengths and the weaknesses of the current as well as potential customers. Analysis of an industry provides you with information on potential sources of competition. Competitor analysis enables any organization to keep attention towards its direct competition. It becomes helpful and valuable when you face competitors. Main objectives of this activity are as follows:
- Study of the market patterns and trends
- Formulation of strategy to increase the market share
- Understanding of the current strategy of the competitors; their strengths and weaknesses both
- Strategy formulation for the growth of organization whenever it is planning for expansion or diversification
- Comprehending the strategies of the competitors facilitate in dealing with threats and opportunities
It is a process where standard operating systems along with the performance metrics of an organization are weighed against the best practices of the other organizations. This may take in to account the whole range of business activities including finance, technology, personnel policies, research and development, products and services etc. This allows the firm to pin point the best practices in the industry and compare the procedures and outcomes with your own processes and results. This process answers the following questions:
- Why the benchmarking company is better?
- What practices they are using?
- How those best practices can be incorporated in your company?
This brings the key improvements in several areas to perform better and come up to be the best organization.
Competitive advantage facilitates the company to identify the competitors in the market and to formulate the strategies to compete against them. The successful growth of a company is highly dependent upon its strong competitive edge building gradual database of loyal customers that can be expanded over the time. The competitive advantage focuses on cherishing and retaining the loyal customers.
In short the competitive market analysis enables the company to get strong hold of the way competitors carry out their business in the industry.