Business Competitors: What You Need To Know

Business Competitors: What You Need To Know

Reading Time: 10 minutes

The word “Business competitors” often evokes a sense of unease. We picture rivals vying for the same customers, a battle for dominance in which only one can truly succeed.

Instead of viewing competitors as threats, consider them an untapped source of knowledge and inspiration that propel your business forward.

At Akaunting, we believe understanding your competition isn’t just about keeping tabs on the “enemy.” It’s about uncovering the hidden gems for a successful business.

Analyzing what makes your competitors tick can help refine your services, identify gaps in the market, and ultimately carve out a unique niche that sets you apart.

In this post, we’ll guide you through a step-by-step process to make competitor analysis a strategic advantage for your business growth.

Table of Contents

• – Why Business Competitors Analysis Matters
• – Identifying Your Competitors
• – Competitor Research: Gathering Information on Business Competitors
• – Analyzing Business Competitors
• – Turning Analysis into Action
• – Ethical Considerations in Business Competitors Analysis
• – Conclusion

Why Business Competitors Analysis Matters

Ignoring your competitors is like going through a maze blindfolded.

Competitor analysis isn’t just about knowing who’s out there; it’s about sharpening your business know-how and gaining a strategic edge.

Here’s why it matters:

Know Thyself: Understanding Your Own Strengths and Weaknesses

Competitor analysis is not just about understanding others; it’s a reflective process.

Comparing your performance, products, and services with your competitors can better help you understand your strengths and areas for improvement.

This comparative view is essential for developing a realistic self-assessment, the first step toward strategic planning and effective decision-making.

For instance, if a competitor excels in customer service while your company lags, recognizing this discrepancy highlights potential growth and investment areas.

Market Intelligence: Learning What’s Working (and What’s Not)

Competitors provide a wealth of information about market trends and consumer preferences. Analyzing their strategies can reveal what resonates with the target audience and what falls flat.

This market intelligence is invaluable for guiding your own business strategies.

For example, if a competitor’s new product launch is met with enthusiasm, understanding the reasons behind its success can inform your product development processes. Conversely, observing their failures can help you avoid them, saving time and resources.

Differentiation: Identifying Unique Selling Points (USPs)

One of the primary goals of competitor analysis is to identify what sets your business apart.

Examining what your competitors offer and how they position themselves helps pinpoint your unique selling points (USPs)—the distinctive features or benefits that make your product or service the better choice.

This differentiation is crucial for effective marketing and brand positioning. Knowing your USPs allows you to craft compelling value propositions that resonate with your audience and stand out in a crowded market.

Innovation Inspiration: Learning and Adapting Smart Moves

While copying competitors is not advisable, studying their successful strategies can spark innovative ideas. Observing how competitors solve problems, engage with customers, or implement new technologies can inspire your own innovation.

Brands like Apple and Samsung do this all the time. For example, Blackberry was once a smartphone powerhouse before Apple disrupted the market with touchscreen phones focused on user experience.

Apple didn’t ditch all that Blackberry already offered; it only brought more functionalities that rendered Blackberry phones somewhat outdated. They developed a touchscreen interface with intuitive gestures, a focus on apps for diverse functionality, and a sleek design that appealed to a broader consumer base.

If a competitor has adopted a novel approach to customer engagement that has proven effective, adapting a similar strategy (while adding your unique twist) can enhance your customer relations. This process of learning and adaptation fosters continuous improvement and keeps your business agile and responsive to market changes.

Pricing Strategy: Finding the Sweet Spot

Understanding your competitors’ pricing strategies is essential for setting your own prices competitively.

Knowing how you compare to competitors in terms of value and cost, you can find the sweet spot for your pricing—one that maximizes profitability while remaining attractive to customers.

For example, when Google launched the Pixel phones, it strategically priced them lower than the market leaders Samsung and Apple while offering comparable features and functionality. Google priced the Pixels significantly lower than Samsung’s and Apple’s flagship models at a time when $1,000 flagships had become the norm.

Google’s smartphone market share has grown from less than 1 percent when it first launched the Pixel phones in 2016 to about 5 percent in 2024.

Identifying Your Competitors

Accurately identifying your competitors is crucial for strategic planning and maintaining a competitive edge.

You can categorize competitors into several types depending on how they relate to your business. Understanding these categories helps you tailor your strategies to compete effectively and innovate.

Direct Competitors	Indirect Competitors
These competitors offer a product or service that is nearly identical to yours and target the same customer base. In the accounting software space, examples of direct competitors to Akaunting might include established brands like QuickBooks or Xero. These competitors target the same market share and often compete on features, pricing, and customer service.	Indirect competitors may not offer the same product or service, but they solve the same underlying need for the customer. For instance, some small businesses might use spreadsheets or basic financial management tools instead of specialized accounting software for bookkeeping needs. These alternatives can sway potential customers who might find these solutions sufficient for their current requirements.
Unexpected competitors are new entrants or existing companies that introduce disruptive technologies or business models that can quickly change the competitive landscape. The car industry has seen significant disruption from unexpected competitors, primarily driven by technological advancements and shifts in consumer preferences. For example, Uber and Lyft revolutionized urban transportation by introducing ride-hailing services, fundamentally changing how people think about car ownership and transportation.	Indirect competitors may not offer the same product or service, but they solve the same underlying need for the customer. For instance, some small businesses might use spreadsheets or basic financial management tools instead of specialized accounting software for bookkeeping needs. These alternatives can sway potential customers who might find these solutions sufficient for their current requirements.
Aspirational Competitors	Unexpected Competitors

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Competitor Research: Gathering Information on Business Competitors:

Competitor research is a critical component of strategic business planning. But how do you get the inside scoop on your business competitors? Here’s your toolkit for effective competitor research:

• – Online Tools: Utilize platforms like SEMrush, Ahrefs, and SimilarWeb to gain insights into competitors’ online presence, SEO strategies, and traffic sources. These tools can provide valuable data on keyword rankings, backlink profiles, and audience overlap.
• – Social Media Monitoring: Monitor competitors’ social media channels. Tools like Hootsuite or Sprout Social can help track mentions, engagement rates, and content strategies. This can reveal how competitors interact with their audience and position their brands online.
• – Customer Reviews and Testimonials: Analyze customer feedback on platforms like G2, Trustpilot, Google Reviews, or industry-specific forums. This can highlight what customers appreciate or dislike about competitors’ products, giving you an edge in addressing those areas.
• – Competitor Websites and Blogs: Regularly review competitors’ websites and blogs. Look for updates on product features, company news, and content marketing efforts. This can provide insights into their current focus areas and future direction.

Key Data Points to Collect

When conducting competitor research, aim to collect the following key data points:

• – Product Offerings and Pricing: Document the range of products or services offered by competitors and their pricing structures. This will help you understand how your offerings compare, and if there’s a gap in the market, you can fill.
• – Marketing and Sales Strategies: Observe how competitors market their products. Note their advertising channels, messaging, and sales tactics. This can inform your own marketing strategy and help you identify best practices.
• – Customer Demographics and Targeting: Determine who competitors are targeting by analyzing their marketing materials and customer interactions. Understanding their target demographics can help you refine your own customer personas.
• – Strengths and Weaknesses: Assess competitors’ strengths and weaknesses. This includes product features, customer service, market reputation, and operational efficiency. Knowing these can guide your strategy to capitalize on their weaknesses and counter their strengths.

Analyzing Business Competitors

Gathering data on your competitors is just the first step. Now it’s time to analyze that information and turn it into actionable insights. Here are three powerful techniques to help you do just that:

• – SWOT Analysis
• – Benchmarking
• – Trend Analysis

SWOT Analysis

A SWOT analysis is a strategic planning tool used to evaluate the strengths, weaknesses, opportunities, and threats involved in a project or business venture. It aids in gaining a comprehensive understanding of the company’s market position and strategic direction.

Here’s how to conduct a SWOT analysis of your business competitors:

• – Strengths: What are your competitors doing well? Do they have a strong brand reputation, a wide range of features, or a loyal customer base?
• – Weaknesses: Determine areas where your competitor is lacking. Consider questions like: Where are they falling short? Do they have a clunky interface, poor customer service, or a high price point?
• – Opportunities: Look for external factors your competitor could exploit. Are there gaps in the market they’re not addressing? Emerging trends they haven’t caught onto? These could be your chance to make an impactful entrance into the market.
• – Threats: Recognize external challenges that could pose a risk to your competitors, such as new market entrants, regulatory changes, or shifts in customer preferences.

Example of SWOT Analysis for a Hypothetical Competitor:

Let’s say a competitor of Burger Prince, “Burger Queen,” has a strong brand reputation and a wide variety of menu items (Strengths), but their service is often slow, and their menu hasn’t changed in years (Weaknesses).

This presents an opportunity for Burger Prince, a fast-food chain, to differentiate itself with fast, friendly service and innovative menu options.

However, the threat of Burger Queen launching a new marketing campaign or expanding its menu should be considered.

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Benchmarking

Benchmarking involves comparing your business performance with that of your competitors to identify areas where you can improve. Here’s how to approach it:

• – Performance Metrics: Compare key performance metrics such as sales revenue, customer retention rates, and market share.
• – Process Evaluation: Look at how your competitors’ processes might be more efficient or effective than yours.
• – Strategic Positioning: Assess how your competitors position themselves in the market and how you compare in terms of branding and customer perception.

Identifying Areas for Improvement:

• – Analyze the gaps between your performance and that of your competitors.
• – Prioritize areas where improvements can have the most significant impact.
• – Develop strategies to enhance your competitive edge, such as improving product quality, customer service, or marketing efforts. You could also choose to rethink value propositions.

Trend Analysis

Trends help you examine new developments in your industry and how competitors adapt to them. Here’s how to conduct trend analysis:

• – Market Research: Stay updated with industry reports, news articles, and market studies to spot emerging trends.
• – Competitor Moves: Observe how business competitors respond to trends, such as adopting new technologies or changing their marketing strategies.
• – Predictive Analysis: Based on your analysis, what strategic moves might your competitors make next? How can you prepare for and potentially capitalize on these changes?

Turning Analysis into Action

Once you’ve gathered and analyzed data on your competitors, the next crucial step is to translate these insights into actionable strategies. This involves refining your messaging, improving your product offerings, adjusting pricing, and leveraging content marketing to position your business at an advantage in the market.

Emphasize Your Unique Selling Points (USPs)

• – Identify Key Differentiators: Use the data from your competitor analysis to identify what sets your product apart. Highlight features, benefits, or services that are unique to your offering.
• – Clear and Compelling Messaging: Craft marketing messages that clearly communicate why your product is superior. Use direct comparisons where appropriate, focusing on areas where you outperform competitors.
• – Customer Testimonials and Case Studies: Leverage positive customer feedback and success stories to reinforce your USPs. Real-world examples can be very persuasive.

Craft Marketing Materials

• – Tailored Content: Develop marketing materials that address specific customer needs and pain points that competitors may overlook. This could include brochures, landing pages, email campaigns, and advertisements.
• – Consistent Branding: Ensure your messaging is consistent across all channels, reinforcing your brand identity and values.
• – Emotional Appeal: Incorporate emotional triggers into your marketing materials that resonate with your target audience. Highlight how your product meets their needs, enhances their experience, or solves significant problems.

Improve Your Offering

To stay competitive, consider enhancing your product based on the competitor analysis:

• – Adding Missing Features: If there are features or services that competitors offer that you lack, and they align with customer needs, it might be worth incorporating them.
• – Enhancing Your Strengths: Identify what you do exceptionally well and invest in making these even better. This could mean more customization options, advanced reporting tools, or seamless customer services.

Adjust Pricing

• – Compare to the Market: Is your pricing aligned with industry standards? Are you underselling your value or overpricing your software? Competitor analysis can help you determine the optimal pricing strategy.
• – Offer Flexible Options: Consider offering different pricing tiers or packages to cater to different customer needs and budgets. This will allow you to capture a wider range of potential customers.

Content Marketing

Leverage content marketing to establish your brand as a thought leader or go-to for quick, in-depth answers.

Address Customer Pain Points

• – In-Depth Content: Create blog posts, guides, whitepapers, and social media content that directly address the pain points your customers experience. Use insights from competitor analysis to cover areas they might have missed.
• – Educational Resources: Develop educational content that helps customers understand complex issues and how your product provides solutions.
• – SEO Optimization: Ensure your content is optimized for search engines. Use keywords your target audience is searching for, to help you outrank business competitors in search results.
• – Guest Blogging and Interviews: Contribute to industry blogs, participate in webinars, and seek interview opportunities to expand your reach and authority.
• – Case Studies and Success Stories: Share detailed case studies and success stories highlighting how your product has helped other businesses. This not only establishes credibility but also provides social proof.

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Ethical Considerations in Business Competitors Analysis

While understanding your business competitors is crucial, doing so ethically and responsibly is equally important. Your reputation as a trustworthy brand is always at stake.

Legal and Ethical Boundaries:

Respecting intellectual property rights is crucial to understanding the importance of ethical business conduct. This entails avoiding the theft of trade secrets or copyrighted material and focusing efforts on utilizing publicly available resources such as websites, marketing content, and social media platforms.

Employing deceptive techniques or misrepresenting oneself to access proprietary information is strictly off-limits. Also, maintaining respect for privacy is paramount; refrain from trying to access competitors’ private data or engaging in actions that could be perceived as harassment, ensuring that the privacy of their employees and clients is also respected.

It’s vital to distance oneself from any activities that could be considered unethical, like corporate espionage or illegal data gathering. Successful strategies should be built on legitimate efforts and ethical practices rather than undermining competitors through questionable means. This ethical approach extends to always maintaining professionalism in all business endeavors.

Maintaining Professionalism

The focus should be on leveraging open-source intelligence, capitalizing on the abundance of public information available. Utilizing online tools, monitoring social media, and reviewing industry reports are effective ways to gather insights.

Engaging in fair competition is essential for a healthy business ecosystem. The primary goal should be improving one’s products and services rather than resorting to unethical tactics against competitors.

Transparency is key; proper attribution is necessary when referencing competitors’ work or ideas. Moreover, it’s important to avoid disseminating false or misleading information about competitors’ offerings, emphasizing the importance of honesty and integrity in all business practices.

Conclusion

Competitor analysis isn’t just a one-time task; it’s an integral part of long-term strategic planning. Markets and competitors are constantly evolving, making it essential for businesses to regularly conduct analysis to stay updated with market trends, adapt strategies, and benchmark performance.

You can maintain a competitive edge, make informed decisions, and strategically position yourself for sustained success in the dynamic service or product space.