How to evaluate competitors

Assessment of the competitive environment is the most important stage in the strategic planning of an enterprise. This work is important not only at the start of the business, but also for the constant analysis of the current situation. Without such work, it is difficult to imagine the existence of a stable and successful company.

You will need

• - the Internet;

• - reference books.

Instruction manual

1

Make a list of businesses selling or producing similar goods or services. You can get this data from the Internet, or from thematic directories and databases of your city. Information assistance can also be provided by the Chamber of Commerce and Industry.

2

Break the resulting list into several groups. First of all, highlight the closest competitors who pose the greatest threat to your company. They can produce very similar products and sell them at the same prices, while tracking your actions. The most striking examples are Pepsi and Coca Cola, which over the years have duplicated each other both in manufactured products and in advertising policies. In such a situation, it is advisable to make the most complete assessment of close competitors by examining in detail their strengths and weaknesses, advertising moves and potential prospects.

3

Make an assessment of distant competitors. Make price schedules for each type of product, identify the market share that each of them occupies. Analyze what percentage of sales you lose due to competitors of this type.

4

Rate secondary competitors working in a completely different field. Oddly enough, for many industries it is precisely such competition that poses the greatest threat. For example, a manufacturer of luxury Swiss watches competes with an automobile concern, since the cost of their goods is approximately equal, and the need for them is formed only by the desire of a wealthy client to demonstrate their status.

5

Use competitive intelligence. If you act within the law, this method will allow you to get the most detailed information about this organization. For example, you can introduce an intern to a competing company. However, he does not have to share commercial secrets with you and thus violate the law. Insider data on the internal environment of the company will be quite enough for an accurate assessment.

Useful advice

Use the results of evaluating competitors to your advantage. Try to come up with new products, improve quality and turn your opponent’s shortcomings into advantages.