“My experience is that to make this exercise more meaningful and valuable for small to medium size businesses, you need to be very specific about the kind of information you are looking for. Here is my checklist of the top 10 things you need to find out about your competitors,” he writes in a story for Entrepreneur magazine.
- Customer perceptions
What do customers think of competitors relative to what they think of you? Customers are the most important source of marketing for any business – there is nothing more powerful than word of mouth. If customers are raving about what your competitors are doing, there is good reason for you to find out why.
- Product launches
New products and services are potential sources of competitive advantage for competitor firms. To respond to new competitive advantages you need to first be aware of them and then assess how great a threat they are.
- New distribution channels
What new distribution channels are your competitors using to get their product or service to customers? Will these new channels open new markets? Or will they steal your customers?
- Recent investments
The acquisition of large-scale assets is often a sign of things to come. By monitoring what competitors are buying, you can pick up signals that they are expanding capacity, changing processes or potentially going to launch a new product or service.
- Promotional efforts
Promotional efforts are one of the easiest competitor elements to observe because they are usually in the public eye. How are your competitors promoting their offering? Has it changed? How are potential customers responding?
- Price adjustments
Price is both an important and a tricky component of the competitive equation. It is therefore vital to always be aware when your key competitors change their price. Ask what signal this is sending to customers and carefully interrogate what effect price has in your sector of the market.
- Acquisitions and partnerships
Have your competitors acquired a stake in another company or entered into a partnership with another enterprise? What might come of this acquisition or partnership?
- Financial performance
Are your competitors experiencing improving or declining revenue and profitability? In the case of private companies, specific information on financial performance can be difficult to obtain. Although you often can’t obtain specific revenue and profitability numbers, you can infer enough from public sources of data to keep adequate tabs on your competition.
- People movements
People equal advantage and, therefore, being aware of people movements is critical. Have your competitors recently hired or lost talented people? What roles do these people perform? What is this likely to mean for their business?
- Process improvements
How have your competitors changed their key processes? What effect is this having on their customers’ experience and their profitability? Process improvements can change a customer’s experience.
Source: www.entrepreneur.com. To read the full story,