To Leverage Competitor Analysis and Gain an Advantage in the Market

In a saturated market, for your company's products and services to continue being chosen by consumers, you must make decisions to help you beat your competitors. Therefore, competitive analysis is essential for effectively advancing marketing and product development.

What is Competitor Analysys?

Competitor analysis is a research process that uncovers information about competitors from various perspectives.
Competitor analysis aims to understand competitors' strengths and weaknesses, marketing strategies, and product and service characteristics. By conducting competitor analysis and identifying competitors' strengths and weaknesses, companies can differentiate themselves and gain a competitive edge in the market.

Differences Between Competitor Analysis and Market Research

Competitor Analysis is often confused with market research, but these two types of research differ in their focus, objectives, and applications. While competito analysis targets specific competitors, market research looks at the broader market landscape, including consumer trends and industry dynamics.

Competitor analysis is essential when a company actively engages with the market, such as launching a new business, introducing new products, or offering new services. The primary objective is to gather information about competitors and develop strategic plans accordingly.

On the other hand, market research focuses on understanding the market landscape through insights such as brand image and customer satisfaction surveys. Its goal is to understand consumer needs and leverage that information to support management with well-informed decision-making.

Advantages and Disadvantages of Competitor Analysis

Advantages

• Identify new competitors that were previously unrecognized.
• Accurately understand the strengths, weaknesses, and distinctive qualities of both your business and its competitors.
• Enable effective differentiation from competitors.

You can proactively increase market share by understanding points of differentiation compared to competitors. 

Disadvantages

• Requires meticulous planning and design, leading to a significant workload from preparation to post-survey analysis.
• Needs to be conducted regularly due to changes in the market, which can incur ongoing costs.

Although competitor analysis demands both time and financial resources, it is essential for staying ahead in the market, and many companies actively invest in it.

How to Conduct Competitor Analysis

Follow the correct steps to ensure the success of your competitor analysis.

1. Clarify Objectives

Clearly define the purpose of conducting competitor analysis, answering questions like “Why are we conducting this?” and “How will we use the findings?”

• Launching a new business
• Developing new products or services
• Improving existing products or services
• Restructuring business models

2. Identify Competitors to Research

Identify the competitors to be analyzed based on the purpose of your research.

• Example: Improving products or services
  • Company selection: Choose companies with a similar price range or market share
  • Research targets: Industry-leading companies/Companies similar to yours in terms of marketing, price, or business models.

3. Formulate Hypotheses and Define Research Items

Research items are determined based on the objectives and hypotheses of the study.

For example, in the case of product improvement, a hypothesis might be: "Adding new features to microwave products will enable differentiation from competitors and increase market share."

4. Validate Hypotheses After Research

There are several methods for conducting competitor analysis, including:

• Researching online.
• Visiting stores or locations where competitors' products or services are sold.
• Hiring a professional research firm.

After completing the research, analyze the results for each research item and validate your hypotheses.

What Research Item Should Be Set?

Maximizing the effectiveness of competitor analysis is crucial to selecting appropriate research items based on your objectives.

For Research Aimed at Restructuring the Business Model

• Business scale
• Management policies
• Product lineup
• Sales and service channels
• Marketing strategies

For Research Aimed at Developing or Improving Products and Services

• Product or service lineup
• Features and quality of products or services
• Price range
• Customer reviews and evaluations

For Research Aimed at Launching or Improving a Website

• Website content
• Overall UI/UX of the site
• Attributes of target users
• Purchase or inquiry pathways

For Research Aimed at Revising or Developing Sales Strategies

• Sales channels and methods
• Sales performance

For Research Aimed at Revising Human Resource Systems

• Number of employees
• Employment types
• Salary structures

For Research Aimed at Improving Distribution Channels

• Order and procurement methods
• Outsourcing partners
• Contract terms and regulations

Analysis Using Frame Works

Once the research items are determined, use relevant data analysis frameworks. 

1. 4C Analysis

It is used for strategy planning to launch new products into the market or expand market share.

• Customer Value – The value provided to the customer.
• Cost – The price or overall cost to the customer.
• Convenience – The ease of accessing or using the product/service.
• Communication – How the product/service communicates with or engages the customer.

4C analysis helps comprehensively understand the market environment and helps craft effective strategies for launching new products or expanding market share.     

2. Value Chain Analysis

The value chain (series of activities) involved in delivering products or services to customers is analyzed to understand competitors' efficiency and differentiation strategies.This analysis identifies the processes where competitors hold a competitive advantage.

Competitors' cost structures and quality improvement measures are also examined to identify your company’s strengths and weaknesses.

3. SWOT Analysis

SWOT analysis evaluates internal and external factors through the following four perspectives:

• Strengths – Internal factors that provide an advantage.
• Weaknesses – Internal factors that hinder success.
• Opportunities – External factors that can be leveraged.
• Threats – External factors that pose challenges.

SWOT analysis is widely used in business and marketing strategies to understand competitors' strengths and weaknesses and to build strategies that enhance your company’s competitive advantage.

These frameworks enable a systematic approach to analyzing competitive data and help craft actionable strategies based on gained insights.

Online Surveys Are Optimal for Competitive Research

Conducting competitor research through online surveys is highly effective, as it allows for quick data collection and easy analysis in numerical terms. Compared to methods like internet-based desk research or on-site investigations, online surveys are significantly more accurate and easier to analyze within a short period.

Competitor research involves multiple stages, including survey design and analysis. For this reason, it is recommended to partner with a research company that offers comprehensive support throughout the process. At  Z.com Engagement Lab, our experienced and dedicated staff work closely with your business as partners, from setting up survey items to post-survey analysis. Feel free to consult with us on any detail regarding your research needs.