There is always competition, no matter what you do in business. However, competition is no bad thing. Acknowledging and learning from your rivals is the best way to grow in your niche market.
As a small business owner, it is in your interest to know what your competitors are doing. When you do, you can learn from their mistakes and emulate their successes. Competition is healthy in business. It keeps you from becoming complacent and gives you a yardstick with which to measure your success.
However, simply acknowledging your competition is not enough. If you want to be better than your rivals, you need to assess and evaluate them regularly.
So who are your competitors and where can you find them?
How to Identify Your Competitors
Identifying your competitors is a vital part of your marketing campaign. As well as providing insight into what your rivals are up to, it also allows you to benchmark your performance and even gain inspiration from their ideas.
In business, there are three main types of competitors:
- Direct competitors
- Indirect competitors
- Future competitors
Let’s break them down and discuss the risks – and opportunities – they present.
Direct competitors are the most obvious rivals in your field. These companies may offer similar products or services to you, or even the same. These companies may operate locally or online in the same space as you. Examples include Microsoft and Apple, or McDonald’s and Burger King.
As you can see from the examples above, having direct competitors is no bad thing. You can still thrive in your market, even if your business model is incredibly similar to that of another company. It’s not about the competition; it’s about how you approach it.
Any business with a similar model that operates in other areas as well as yours is an indirect competitor.
Another way of looking at indirect competition is searching for any business that satisfies the same consumer need as yours. For example, a burger restaurant is an indirect competitor to a takeaway pizza place because they both address the same need – in this case, hunger – even though the products are entirely different.
Future competitors are the hardest to identify because no one has a time machine. Identifying and overcoming future competition relies on market analysis rather than looking into a crystal ball. It’s a way of pre-empting what your customers are thinking as a way to inform what their needs will be in the future.
Finding Your Competitors
Identifying whether or not another business poses a threat to yours is only half of the battle. Before you can correctly identify your competition, you need to know where to find them.
Thanks to the Internet, it’s easier than ever to track down your competitors. Your research methods will depend on whether you’re looking globally for online businesses or locally for companies in the same physical area.
Trade associations can also be an excellent source for identifying your competitors. For example, if you were going to start an e-commerce site dedicated to selling auto parts, you could visit a trade association site to find a list of automotive product vendors.
When performing any kind of market research online, you will need to try a variety of key search terms that are similar to yours. That way, you can check to see if other companies are funneling valuable search traffic that could be coming to you.
Social listening tools like Hootsuite and Social Studio are also useful for finding your competitors, as are Google Consumer Surveys and Google Analytics affinity groups.
How Much Competition is Healthy?
There will always be competition, no matter what you do in business. This is OK if you’re Apple or McDonald’s, but competition can be a real cause for concern if you run a small business.
Competition in business is a good thing, however. It shows that there is demand in your market for what you’re selling.
How to Evaluate Your Competition
It’s not enough to acknowledge your competition. You need to be able to monitor and evaluate them effectively.
This means acknowledging your competitors’:
- Points of difference
Once you understand the competitive landscape, you need to evaluate the data you have gathered to assess your competition’s strengths and weakness. Understanding these points will allow you to capitalize on your rivals’ weaknesses and learn from their strengths.
Thankfully, the Internet has made competitor analysis quick and easy. Now, you can find out everything you want to know about a business by looking at their website.
When you find a competitor’s website, you should ask yourself questions such as:
- What is your first impression of the website? Is it user-friendly, can you find what you’re looking for easily?
- Does the site respond quickly, or were you left waiting for the page to load?
- Is the layout easy to navigate? How well-organized is the information in front of you?
- What services or products does the company offer? Are there points of similarity or difference?
- What are the prices, shipping options, and return policies, and how do they differ from your business?
Reviewing all of these elements will allow you to determine how you can stand out in the marketplace, especially if you run an e-commerce business. This information is also vital for your business plan, whatever field you work in.
Once you find a competitor, you’ll want to continue your analysis and keep on top of the movements they make. You can do this by setting up a Google Alert for their name, tracking “trends” on Google, and by following them on social media.
All businesses face some form of competition, and this is no bad thing. By considering all the possible ways your customers’ needs can be satisfied by either you or your competitors, you can create a future-proof strategy that helps you stand out in your market.