By Puja Parekh, Enabler, Espark-Viridian, India
“By failing to prepare, you are preparing to fail.” — Benjamin Franklin
Every business model canvas needs to have information on direct and indirect competition. A competitive analysis is your tool to gain insight into the market and competition,i.e, to learn what the others are doing and why? It is equally important, for successfully running startups to do a timely competitive analysis in order to track changing trends in the marketplace.
Key questions to be answered in any business are: How different is the product from what is available in the market and who are the competitors? A market is just not about customers, it is a combination of three broad factors; Customers, Competitors and Suppliers. Your competition shares the same end customer, shedding the same amount and has access to the same opportunities, for the same mind share. Hence, competition is a remarkable driving force.
Entrepreneurs must do the SWOT (Strength, Weakness, Opportunity and Threat) analysis along with their direct or indirect competitors.
A comprehensive competitive analysis does take time and chances are that you might get lost in the trees before you see the forest at the product concept phase. Create a list of the top players in the market, do your research and try to figure out a framework based on which the industry/overall market competes. Start with analyzing each company’s primary positioning, target customer, and core value proposition. Here are a few things you can easily do to gather such information:
– Use your competitor’s product/service
– Talk to their customers and try to understand the reasons behind their choice of product/service
– Research their website and follow them on all digital mediums and social media channels
– Read news/press releases about them and subscribe to their newsletters and blogs
– Study their branding, marketing and advertising strategies
– Visit their physical outlets (if any)
Put this information on black and white visuals that display all the competitors, so that they can be easily compared with one another. Then, along with your team, try and position where your company would compete or fall within the entire competitive landscape. The most interesting bit is finding any glaring holes(an opportunity) in the existing marketplace to make a swift entry.
Conclude with an action plan and always remember in this state of competition, Charles Darwin’s theory “Survival of the fittest” stands true, even in businesses!