Competitor research is a strategic management tool used by managers who seek to understand the competitive intelligence of their rivals. Competitive analysis is an evaluation of the strengths and weakness of competitors. This analysis gives both an offensive and defensive tactical context to identify threats and opportunities.
Competitor analysis is frequently used by market structure researchers, market trend setters, marketing managers, and other competitive-based analysts as part of a comprehensive competitive landscape planning approach. It is also a valuable tool for understanding and measuring competitor performance in various industries and business functions. However, there are many challenges inherent in the process of gathering and effectively using competitor information.
Unfortunately, the best way to gather competitive intelligence information is to perform competitive campaigns or to study competitors in real time via a search feature. There are a variety of reasons why this is the case. First, competing companies usually have large and deep catalogs of websites with a wide range of products and services. In fact, they probably have a similar search feature that yields detailed competitor information when a keyword or phrase is entered into the search engine of one company.
Because all companies compete in the same markets, they have a similar business model and a similar business culture. These similarities lead to what is called “cyclical overlap.” When a particular industry or type of service is the most important to a company for a specific period of time (e.g., a sport’s professional league season), it will likely dominate the search results for that period of time. Companies that rely on strong brands will also be prone to strong competition from businesses with similar logos, branding, and product or service offerings. In the end, this means that business rivals and competitors must work closely to exploit and counter competitive advantages.
Competitor research has evolved over the past several decades with the development of new techniques for identifying, evaluating, and monitoring competitive trends and activities. Competition and swot analysis are just two of these methods of competitive research. Another method is to build databases of competitive information from many different sources in order to make an in-depth study of competitor activity and developments. Although this type of competitor research is much more time consuming and costly, it allows companies the opportunity to build detailed competitor archives.
The Internet has also spurred the creation of a number of secondary research and competitor analysis firms that conduct research and reports on specific industries or target markets. For example, Corr Pharmaceuticals, Inc. engages in secondary research to understand how pharmaceutical company customers may interact with its products. At the same time, Corr’s research arm conducts research using social media sites such as Facebook and Twitter to examine consumer perceptions and attitudes toward specific products. Both of these types of secondary research can be used to develop new marketing strategies, determine existing competitor advantage, and implement changes to strengthen a company’s competitive position.
Businesses should also beware when it comes to social media, particularly when conducting competitor and industry research. Many companies, particularly smaller start-ups, fail to appropriately apply the appropriate tools and information needed to accurately identify, analyze, and react to competitors and movements in their target markets. There are no clearly defined rules governing what qualifies as a relevant social media outlet and when it is considered relevant, which leads to the potential for companies to engage in marketing activities that could directly damage their standing with their competitors, drive up their competitors’ share price, or otherwise harm the standing of competitors in a way that can ultimately damage their standing with their target market. It is important for business owners to remember that a company’s reputation can be seriously damaged by actions taken in disregard. Therefore, companies should take care to conduct meaningful competitor analysis and understand the potential impact of their marketing decisions.
In conclusion, if a company wants to compete successfully, it must employ a variety of tools and approaches to gather competitive intelligence. Among those tools and approaches are the six “P” components of swot analysis: identifying, measuring, analyzing, monitoring, and prioritizing. Competitor intelligence is crucial for any business trying to survive the fierce competition that exists today in the global marketplace. The right strategy can mean the difference between staying afloat or going bankrupt.