What Nobody Tells You About Competitor Analysis
Aping competitors can be quite tempting, who wants to reinvent the wheel?
Start-ups and enterprises often need to keep an eye on their competitors before and after the launch of products. However, in the process, they sometimes tend to lose sight of what’s good for their own product.
Let’s talk about the uncomfortable, the less talked about. First up, let us define what competitor analysis is really about.
Competitor analysis is a process of studying similar players in the market who are offering either similar services or catering to a similar demographic. It involves studying others’ products with the purpose of identifying gaps that exist in the same market to be filled by your own products/services. It may also involve identifying specific features that are working for your competitors and those that are not. The purpose of competitor analysis is to validate USPs of your own product/service and to find innovative ways to cater to the same demographic.
This should ideally be a fruitful exercise that opens eyes about where your product or service truly stands and how the USPs are going to work. It is like a critical evaluation of your own offering. So far, this is what you know. Here’s a list of things you may not know:
#1 World’s Best Companies Didn’t Replicate
Remember the companies that come to your mind in each of these sectors: consumer goods, automobile, mobile phones, electronics and food. Most of these companies have taken the path of innovation not replication. This is not to say that replication is all bad. But before you replicate, know that you still need to bring something new to the table. You cannot make the same mistakes your competitors did, you cannot win the long-term war through replication.
# 2 Price-war is an Instant Hit and a Long-term flop
Customers today are more aware than ever. Gone are the days of INR 99/- where just by offering a Re 1 difference, companies used to get attention. Now, attention has become a pricey commodity and I urge to not lower your price unless you have deep pockets. Pricing creates a certain impression of your brand, it’s important to be confident of such a branding. Many e-commerce companies who play the price war today were the ones who began with selling quality first and/or value first. or convenience first, They captured market share and they are funded today. The same model may not apply for every startup or enterprise. For long-term profitability and valuation, it’s important to create value for money instead of mindless price wars.
# Choose Exclusivity or Pricing, Not Both
If you are selling affordability, you cannot call your product exclusive and vice versa. When you try to sell both, it confuses your customers. Exclusivity usually comes with a price and you should be willing to sell it boldly. One of the best ways to stand out in a competition is to choose one solid USP and stick to it.
# 3 People Still Expect the Same Things
Regardless of what your competitors are doing, there are some things that will always be in demand. People always want value for money, ease of use and fast deliveries. The business should be founded on things that won’t ever change.
Creativity, communication, collaboration – this combination will always be a winning combination. For example, you put one chimpanzee and one human on an isolated island, the chimpanzee stands a better chance to survive. However, when you put a group of humans and a group of chimpanzees on an island, the group of humans will survive because of collaboration.
Apple not just created iPhone but kept its API open so other people built products around it, as a result, when you are buying an iPhone, you are buying other things as well. That way a whole ecosystem is built. You cannot work with a competitor mentality always – it’s important to think from the ecosystem point of view.
# 4 If Stand-alone Doesn’t Fit, Try Overall Service
In competitor analysis, when you find out that your product may be able to stand alone, you can work your way through creating an overall experience or service. For instance, if you are launching accounting software, you can find an overall service (like book-keeping) or advantage (like an expense management or payroll management software) along with it, that other accounting software might not be offering.
Competitor analysis should be a benchmark not a strong influence. Let your product or service breathe in the market on its own and not become a mere shadow of your competitor.
This article was originally published on entrepreneur.com.