One of the primary activities when creating a brand is researching your competition. In this lesson, I talk about the exact steps you need to follow to effectively research your competitors and then leverage your brand strategy to beat them and dominate the marketplace.
Researching your competition should immediately follow your market research activity.
Essentially you are looking at the following steps:
- Determine your direct competitors
- Determine your indirect competitors
- Determine your future potential competitors
- Rate your competitors and your own brand
- Perform a SWOT analysis
- Create a competitive positioning strategy
By understanding and figuring out the strengths and weaknesses of your competitors, you will be able to understand the entire competitive landscape and channel your resources and strategy to leverage the opportunities to gain market share instead of playing the guessing game or a catchup game.
Your competitor list would depend on whether you are targeting the local, national or global marketplace and would determine the amount of time you need to spend on this activity. This is no time to skimp on time invested!
Determine your direct competitors
A direct competitor is one who offers exact same products or services or at the very least similar offerings. These brands would be operating directly in the market segment you are targeting and most likely have the same target audience and buyer personas.
Create a list of the 5 main direct competitors and create company info cards for each of them. This should include the following details:
- Description of the company and business
- Their annual revenue (it may be worth using a service like Owler)
- Year founded
- Buyer personas
- Sales trends and market share
Determine your indirect competitors
Companies and brands that do not directly operate in your market segment or offer the exact same products or services but could result as a conflict between vendors whose products or services that could satisfy the same consumer needs.
A simple example is a pizza shop that competes indirectly with a fried chicken shop and directly with another pizza shop. Or you can take the example of a positive-wear apparel company competing with other apparel brands.
In some cases, an indirect competitor may have nothing to with your market segment but may be fighting for wallet share of your primary target market. For example, if you are a iPhone game developer targeting 10-12 year olds, an indirect competitor could be a restaurant that launches a free app that your core players may choose to play instead of spending money on your paid game.
Again as in the case of direct competitors, you will have to create a company info card for each of the indirect competitors.
Determine future potential competitors
In any given market there will always be future potential competitors. These are usually the larger brands who may enter a space after it has been proven to be lucrative and use their superior distribution and pricing power can completely reshape the market in a short period of time.
A great example is how Amazon is entering the clothing and apparel market segments or even the fresh produce and grocery segment. Because of its reach and logistical efficiency, Amazon can wreak havoc on independent retails.
Being aware of potential competitors like that would enable you to plan for contingencies and also ensure you do not place all your eggs in one basket.
Rate your competitors and your own brand
Once you have compiled a final list of your direct, indirect and future competitors, it is time to rate them along with your own brand on a set of criteria to gain an objective view of the market place. By rating your competitors and your own brand you can establish benchmarks and understand your brand’s true position in the market.
Different industries would require different kind of criteria but here are a few examples you can use:
- Product/Service Quality
- Product/Service Uniqueness
- Product/Service Features
- Product/Service Effectiveness
- Customer Service
- Market Share
- Distribution Channels/Power
- Brand Awareness/Name Recognition
- Sales Ability
Once that is completed conduct an analysis to understand on which criteria you rank the highest and on which you rank the lowest. This would be an opportunity for you to come up with unique ideas to bump your ratings.
Perform a SWOT analysis
After analyzing your competition and yourself, distill all the information into a SWOT analysis. This creates a powerful visual aid to use creating your competitive strategy.
SWOT stands for Strengths, Weaknesses, Opportunities and Threats. Strengths and weaknesses are internal, which can be controlled by you. Threats and opportunities are external, controlled by the marketplace.
Creative a competitive positioning strategy
Once you have completed the above steps, you can start working on your competitive positioning strategy. This goes hand in hand with your brand basics and brand architecture and your SWOT analysis above will go a long way in enabling you to figure a major differentiation factor for your brand.
I will not go into the exact steps you need to take to create a kick ass brand positioning strategy in this article. That is reserved for another lesson as part of the Ultimate Brand Builder Course. However in the interim you can find more information on this page and this page.
Hopefully by following the steps this lesson you get a grip on your competition and figure your differentiation factor that will set you apart from your competition and enable you to dominate a market segment. In the premium lesson I also include more detailed explanation of the steps, more real life examples and the actual work sheets that we at SpellBrand agency use when we work on competitive analysis for our clients. You can use the worksheets to make the process easier and streamlined.
This article is one of the lessons from my Ultimate Brand Builder Course. By completing the course you will have built a robust and stunning brand that will be poised to attract your target audience and dominate your market space.