Competitor analysis forms part of the toolbox of actions available to any business, generally in the context of preparing its growth strategy and to anticipate its short and medium term risks and opportunities more effectively. Proper identification of your competition and its characteristics is a pre-requisite in delivering objective monitoring, which in turn is needed to generate up-to-date and relevant data. How can you implement this competitive benchmarking / monitoring? Which sources should you use? Here are a few answers to these questions.
What is competitive monitoring / benchmarking and what is the value to a businesses, even on a small scale?
As a marketing technique, competitive monitoring involves gathering as much relevant data as possible about your business’s area of activity and the other players in the market. Competitor analysis, and the examination and use of the information that is collected in this way is often primarily intended to result in an improvement in the competitiveness of your own business and to serve as a benchmark of its productivity. Because it also helps in the development of a strategy, or setting a strategic direction, competitor analysis also allows you to approach your market from a position of strength.
Analysis of your competition and your sector in general is also a reliable tool for improving your sales strategies and the effectiveness of your business at introducing new products or services, converting prospective customers or tracking changes to the business’s hardware, software and industrial equipment. A competitor benchmarking exercise ahead of the launch of a product or service allows you to take the measure your competitors and gain an insight into their strengths and weaknesses.
What information should you seek out when performing competitive monitoring?
Competitive benchmarking / monitoring must provide a snapshot of the current competitive landscape, but it is up to the business to determine the depth of analysis that is required. Typically, worthwhile information about competitors includes: commercial information and financial information.
- lines of business
- core products and services and, if possible, their prices
- key sales and distribution channels
- major customers.
- revenue and profitability
- levels of capex investment and return on capital employed.
Information can also be collected relating to competitor staff, their recruitment methods, staff turnover, and pay policies.
Finally, depending on your objectives, it may also be worthwhile to analyse your competitors’ growth strategies:
- acquisitions and partnerships
- countries targeted for future growth
- opening of overseas offices
- future products and new technologies
How can you implement an active competitive monitoring process?
To prevent the information you seek from being diluted in a mass of irrelevant data, you need to set clear objectives for your competitor monitoring and rigorously select the sources that you will use.
Apart from the obvious press releases and news articles and searches of specific (and often chargeable) databases, it may be worthwhile to implement an information gathering process to be followed by the sales team when taking part in events and trade shows where customers, competitors and suppliers come together, as well as using professional contact networks such as LinkedIn.
There is a plethora of different sources to choose from, both in searching for information and optimising your reporting. These range from RSS feeds issued by the specialist media for the relevant business sector, through to commercial monitoring software, business directories such as Kompass and Infogreffe, INPI (the French National Institute of Industrial Property) through to forums, newsletters – and even competitors’ own blogs.
A wide selection of tools also make it possible to automate your online monitoring, starting with Google Alerts, which you can try before deciding whether to invest in more specialised monitoring software packages, such as those offered by Digimind, Website Watcher, Sindup and Corporama, which allow you to build custom automated monitoring solutions that are both consistent and effective.
The frequency with which you undertake competitor analysis will inherently vary depending on the nature of your business and the goals that you set. It is therefore up to each business to determine this frequency, whether it is monthly or several times daily. Nonetheless, competitor analysis should never be undertaken on a one-off basis, but needs to be a continuous activity that constitutes a business process in its own right, just like recruiting or sales.
Who should you select to provide your competitive benchmarking ?
Competitive benchmarking can be performed by the company itself...
If the business has sufficient internal resources and has developed the processes set out above, competitor analysis can be performed by the business itself, with the benefit that acute domain knowledge can make it possible to focus immediately on the areas of information that are of interest to the business.
Or can be performed by a strategy consultancy firm
The other option is to outsource the implementation of this competitive benchmarking by making use of the services of a strategy consultancy. This has the advantage of enabling you to benefit from the technical, focused expertise that is acquired from repeatedly delivering this form of competitor analysis.
As such, competitive monitoring is part of the set of strategic tools that are indispensable if your business is to grow and develop. By giving in-depth consideration to the statistics, sources and objectives involved, you will be able to define a clear and frictionless monitoring strategy, allowing you to go on to work on a number of different scenarios to position and differentiate your offering, improving its competitiveness with respect to its key competitors.