Researching your competitors give you some of the greatest data that you can analyze to improve your company. Always remember that you need to continue re-investing your revenue back into the company for further development. Free market and the invisible hand works because of competitions, and with it you can guarantee that there will be someone out there getting better and better; so you should step up and do the same before you get squashed. Companies routinely monitor their competitions to observe the areas that they can improve on (or areas they can tell the government on to get them in trouble, if someone does something immoral).
One of the best way to develop your company is to look at other people around you and see what they’re doing. The phrase “your enemies are your best teacher” holds true, especially in the business world. Chinese people love investing their time researching other company’s data. They like to copy what others are doing and make it cheaper. Honestly, Chinese could have went with copy and make it better method, but they knew they can make more profit with the first method.
Remember that the world is constantly changing. With change comes proper law that regulates how companies function (The online world may have lack of regulation now, but there will more regulations that will be soon developed). Ensure that you don’t copy methods and practices that seem to fall under the dark side (doing this will be bad for your company in the long run, but if you are in it for the short run then it is fine. However, when you decide to sell the company, remember that the buyer will look into stuff like this).
The basic items you should research about your competition are company’s age, number of employees, and sales. One should use the local library or small business reference library to ensure they cover as much competitions as they can. These includes not only the company that offers same product and service as you, but similar, compliments, and supplements as well. Don’t forget to gather data on collaborators, customers, and other necessary facilitators when you do your research.
Analyzing your competitor’s data tells you magnitude of information. For example, you can see how effective their advertising is. But the main thing it will tell you is the current and future trends that you may research down the road yourself. Questions like are there opportunities in this niche, is social media important for your business, are there technological advance in the current niche, is there a new product or service being developed that may threaten your old product and service. These and other trends that should be researched by monitoring not only your competitions but using proper resources in your local library or business reference library.
Knowing your competitors and your target market allows you to decide if you should jump into the market to operate your own business. After pondering, you may either decide that competition is either too strong for you to jump in or you can squeeze in and possibly grow. Go over the essential costs and revenues to operate the business, to include research that you should be doing on a routine basis. It’s essential that you identify not only your problem, but other companies in the same niche as you.
Best way to assess your company or your potential company is by doing SWOT analysis. This tool helps you assess where you stand in your market in relation to your competitors (it basically provides a giant picture when looking at a product and brand). It’s very useful to use before making a decision to change something about your website. Especially if the change is something that is made to fight against your competitors.
SWOT analysis is a very common and easily used business tool. (S stands for strengths, W for weakness, O for opportunities, and T for threats). This analytical framework help your company face potential challenges and find its most promising markets. It looks at both internal and external influences and helps develop awareness of all factors involved in decision making.
Most amateurs see SWOT analysis in one dimensional view (product only). Professional can typically focus and make it two dimensional and look at it from both a product and brand point of view (awesome marketing skills). If you are an expert, you can have a 3D view, making a well-rounded exhibition of your entire business (I may go over SWOT analysis later in the blog).
After completely analyzing your competitors, you now have a broad idea of how the business is conducted. You should have a list of items that work and doesn’t work, items that could be improved or not, and much more useful data that you can apply in your business.