In any business domain, there are various others who are also trying to engage the same audience as you are while paving their way to the top in the market.
In order to hold a strong business position in the market, the first step would be to identify who your competitors are and then execute a brief analysis of them.
The whole process of identifying and analyzing the competitors in a business domain is known as competitive analysis.
Purpose of competitive analysis
Competitive analysis is the process for the sole purpose of determining the competitor’s strengths and weaknesses within the market articulate strategies with definite advantages.
This also helps in developing Wall for preventing the competition from entering your market and also determining any weaknesses that need to be taken care of, for enhancing the product or service.
The first step of competitive analysis would be determining the potential competitor in the market.
How to determine your potential competitor?
To identify the potential competitor there are two simple ways.
- Think from the customer’s viewpoint
Suppose you are a customer and you need a particular product or service. So before buying you will consider two parameters in the product, quality, and value for the money.
Now, find the companies that provide quality and value for money in the domain the same as yours, they are your potential competitors.
- Find what motivates your competitors
Group the competitors together and then identify which strategies are likely to motivate them for excelling in their enterprise business profits.
Now as you have the list of competitors ready, let’s proceed further.
Identify the points where your competitors are most vulnerable
After grouping the competitors, the next step would be analyzing and understanding their strategy, also its implementation in the market.
This will help you in identifying their strengths and weaknesses. Strength and weaknesses of an enterprise will help you to find out what they’re lacking in their strategies and areas where they are most vulnerable.
Mostly, every business lacks a key asset or skill which is very crucial to compete in the market.
According to David Allen Aaker,
(As mentioned in his book “Developing Business Strategies”)
To find out the key asset or skill lacked by an enterprise, we need to concentrate our focus and efforts on the following areas.
- The reason behind successful and unsuccessful enterprises.
- Major customer motivators
- Major components costs
- Industry mobility barriers
The way an enterprise or organization performs in the market is directly dependent on the key assets and skills it possesses.
Thus analyzing both the success and failure of an enterprise can provide us with ample knowledge of dos and don’ts that needs to be followed for growing in the market.
We get to learn important guidelines from both the successful dominant performers and weak nonperformer enterprises in the market.
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The dominant successful enterprises in the market reveal many crucial things about the market, needed to excel in the domain. Similarly, weak non-performing enterprises also teach us the steps we need not take and implement the things which they lack.
This analysis helps you in making intact and compelling strategies for performing smoothly in the market. As we know the competition among the organizations is based on the key assets and skills, constructing a framework for the competitive market.
Create a Framework for the competitive market
After completing the analysis part it is suggested that you should jot down the key points that emerged from the competitive analysis. Once you have a list of dos and don’ts it’s easy to relate your business with it and find out where it stands in the success chart.
Channelizing the information from the listed Dos and Don’ts is very important and strategize things accordingly. All the crucial strategies have to be implemented around the following departments.
- Product enhancement
- Price annulment
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Implementation of the strategic planning will have a progressive effect on the enterprise’s growth chart and thus will make you a distinct place in the competitive environment.
This process needs to be handled very carefully with intense planning with the required information and thus it will consume much time for the processing workflow.
Thus the other management issues of the organization need to be handled dynamically with complete efficiency.
ChiefEx understands the business requirements and has designed an automated Cloud ERP system for eliminating complexities.
This saves the enterprise crucial time for planning out important business strategies such as analyzing the competition, while the workflow is managed smoothly.
We hope this was a helpful piece of information.
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