In the escalating competitive business world, companies are always eager to outpace their rivals to acquire greater market share and competitive advantage. The example of Apple vs. Samsung is one that sparks particular interest. Firms have been locked in battle over the release of superior smartphones, tablets, and other devices and mantle of which brand is better is frequently found switching between the two brands.
This intense competitive rivalry show the importance of why firms must conduct a competitive analysis as part of their strategic plans to craft strategies that can help them achieve goals without neglecting the threat of its rivals or of potential entrants.
In this article, we will look at the benefits of competitive analysis for an organization.
What is a competitive analysis?
This refers to an assessment of key details regarding the marketplace which informs your organization of the opportunities and risks and whether it is in a position to meet them. This also allows business decision makers to integrate possible ways of combating the threats of the competition and how it can emerge as a market leader in the industry.
A competitive analysis helps in the following ways:
Identifies your internal strengths and weaknesses
First and foremost, a firm can learn the condition of its internal strengths and weaknesses pertaining to business opportunities upon conducting a competitive analysis. It can help identify what resources and capabilities it can utilize in response to the market trends and opportunities.
For instance, it can reveal how technologically-savvy the marketing department is in conducting digital marketing campaigns or know how agile its supple chain is to meet new unscheduled orders.
Identifies customer needs and preferences
A competitive analysis can also identify the changing needs and preferences of its target market. This can be extremely crucial in the fashion or clothing industry where new design preferences and clothing needs can quickly change. Also, the growth of technological applications and systems can also affect the speed at which customers demand new products and services.
Assess competitor strengths and weaknesses
One of the most important aspects of a competitive analysis, if not the most important, is the level of detail it can offer organizations to closely monitor and study the activities of its organizations. Firms which are planning country-wide marketing campaigns for instance usually pay a close watch on their competitors to find ways of differentiating their brand as well as promote superior product and service features.
Conducting a competitive analysis can allow organizations to make marketing decisions far more effectively. Considerations relating to product materials, packaging, pricing and promotion tactics will depend largely on how much threat it perceives by the competition.
In sum, a competitive analysis is immensely crucial tool that helps organization in planning strategically for their projects and marketing campaigns. It provides useful insights pertaining to their internal and external aspects of their business landscape and helps to stay informed of current events.
Rothschild Corporation offers clients professional strategic planning advice and business consulting in Houston area. To get started, please dial 713-992-8410 now.
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