When you launch a product or service on the global market, getting an edge over the competition is key to your ultimate survival. Researching your competition or conducting a competitive analysis is one of the most crucial aspects of product development that should not be overlooked.
What is a Competitive Analysis
People usually think that once they know what their competition is offering, they know all they need to know about their competitors, but it goes much deeper than that. Conducting a competitive analysis is about truly getting to know your competitors; their offerings, strategies, strengths and weaknesses. Once you research the competition, you will know what they do, how they do it and why they do it in that particular way.
3 Reasons Why to Perform a Competitive Analysis
As mentioned earlier, the main reason for conducting a competitive analysis is to get a competitive edge over your competition. This means that you can use the information you have gained from the research to make your own product or service outshine the competition.
1. You Get to Know Your Target Consumers
Researching your competition is a great way to learn about your target niche. In fact, it can actually enhance your very own market research, which is another important aspect of product development. Based on what you have uncovered about your competitors, you might find that some of the information can actually be of use to you as well. For example, your competition might use a specific supplier that provides high-quality and affordable standard components, and you can also benefit a lot from using that same supplier.
2. You Learn From Your Competitors Mistakes
The internet has a lot of information about your competitors that you can use to learn what mistakes they have made and how to avoid them. Not only will you be able to avoid their mistakes, but you can also leverage them to push your product ahead of theirs. For example, if customers keep complaining that your competitor’s product does not perform a particular crucial function they need, all you have to do to get ahead is provide them with that functionality and they will prefer your offering instead.
3. You Know What Works
When you know what works for your competition, you can try to do something similar. This does not mean copying what your competition is doing step by step, as this would be plagiarising their approach, which is wrong. Just copy the idea behind what they are doing and give it your own spin. For example, if your competitor is offering a free ebook with their purchase that will help customers make the most of their product, perhaps you can try offering free video tutorials on the same.
Now that you know the importance of carrying out a competitive analysis, you will not skip this important step when developing a new product or service. Doing this will give you insights that will help you make a product or service that has the potential to outsell and outlast the competition. In fact, after the competitive analysis is complete, there is a high chance that the competition will not frighten you anymore.