Carrying out thorough analysis of your business competition is not just a good idea, it’s a necessity to discover a profitable business niche. It’s vital that you uncover your competitors’ behaviour and what makes them attractive to consumers in order to find unexplored niches that are ripe for domination.
Put simply, competitor intelligence gives you the tools to differentiate the way you do business from the rest; with a set of unique selling points (USPs) that turn potential customers into regular customers and regular customers into brand advocates.
It’s a fact of business life that all businesses face competition in some form or another. And it’s no longer just local, offline competition either – with more products and services being purchased or researched online you face a battle to dominate your niche on multiple fronts.
Why should I check out the business competition?
It’s not just the competitors themselves that you need to watch out for – other newly developed products and services can be your undoing if they are being sold by or licensed to competitors. The end goal when finding a business niche to ‘own’ is to always stay ahead of the game.
By understanding your competitors’ positioning strategy (how they are perceived in the eyes of the consumer) it’s easier to get a handle on the demands and expectations of your target niche as a whole.
Why are customers choosing them? Are they opting for the cheapest option or do they prefer a premium-quality product? How do they differentiate themselves from the competition within their marketing collateral? Is there one company that’s managing to keep pace with trends and issues quicker than the rest? If so, how?
It’s also a good idea to uncover the financial strength of your business competition before you delve too deeply in a particular niche. The last thing you want is to discover that you’re up against a company that’s got considerably more cash flow and budget to blow your brand and marketing presence out of the water.
What are the best sources of competitor intelligence?
At the Business & IP Centre Northamptonshire, you can gain instant access to more than £5m worth of financial data and information on companies located in more than 200 countries using systems such as FAME, Kompass, Statista and Mintel. Whether it’s accounts and director details, news analysis, company accounts or emerging markets and technologies, we can give you the essential information you need to find opportunities to start, run and grow a niche business.
Davidson, J. H. (1997) ‘Even More Offensive Marketing’ suggests that the sources of information for competitor analysis can be grouped into the three following categories:
Recorded data Information that’s most easily available, either via internal or external published form. The best examples of these would be a competitor’s annual reports, live press releases, product brochures, presentations and speeches.
Observable data Information that has to be actively collated, often via multiple sources. The best examples of these would be competitor pricing, promotions and competitor tenders that help to build an overall picture of what your competitors are getting up to.
Opportunistic data This type of information is often the hardest to obtain, as it requires considerable planning and organisation. It is labelled opportunistic because it relies on coming from one-to-one discussions with suppliers, ex-employees of competitors, distributors that provide anecdotal snippets of information that can often be the missing pieces in the competitor jigsaw puzzle.
However, an individual piece of recorded, observable or opportunistic data has little value in isolation. The real skill is to gather as many pieces of the jigsaw to understand competitor objectives and their strengths and weaknesses.
Identifying competitor strengths and weaknesses
Using the competitor intelligence sources discussed above it’s much easier to ascertain what your competitors are doing well and, equally, where they aren’t quite so strong.
For instance, you may have gleaned some opportunistic data that suggests a competitor may have a fantastic reputation for customer service and aftersales care, but their pricing structure is higher than it should be; giving you an opportunity to nip into the marketplace and offer a cheaper but equally effective alternative.
Similarly, your competitor analysis of recorded and observable data might uncover that your rivals are yet to secure registered design rights or patent rights to their products, which may give you a chance to steal a march. Nevertheless, it’s important to keep abreast of the latest rules on patent protection, copyright law and design rights.
At the Business & IP Centre Northamptonshire we’re here to give business owners, entrepreneurs and inventors the tools to make better informed decisions when developing new business ideas. With access to a comprehensive collection of business and intellectual property information sources, get in touch with us to learn more about how our data can be applied to develop a profitable business niche.
This article first appeared on the British Library’s Business & IP Centre website.