Competitor analysis is an assessment of the strengths and weaknesses of current and potential competitors. The assessment includes but is not limited to: who are your competitors? What customer needs and preferences are you competing to meet? What are the similarities and differences between their products/services and yours? What are the strengths and weaknesses of each of their products and services? How do their prices compare to yours? How are they doing overall? How do you plan to compete? Offer better quality services? Lower prices? More support? Easier access to services? How are you uniquely suited to compete with them?
The role of a Competitor Analysis:
- To help management understand their competitive advantages / disadvantages relative to competitors
- To generate understanding of competitors’ past, present (and most importantly) future strategies
- To provide an informed basis to develop strategies to achieve competitive advantage in the future
- To help forecast the returns that may be made from future investments (e.g. how will competitors respond to a new product or pricing strategy?
Information gathered on competitors is put into a competition grid and a SWOT (Strengths, Weaknesses, Opportunities, Threats) Analysis is completed for each key competitor.
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