Running a business can be difficult to seafaring. Dangerous cliffs lurk here and there. So that you can master the adventure of entrepreneurship skilfully, you should know the “seas” and dangers well – this gives you security and the necessary calm for planned action. With the help of a competitive analysis, you or your employees collect all the data you need in relation to your competitors. Afterward, many sensible steps can be derived, which will bring you a great deal closer to business success.

The competition analysis can support these decisions

Competition analysis can be carried out in different ways. This is mainly because the goals of the analysis differ from case to case. There are numerous decisions in a company that cannot be made without a specific look at the market or submarket. A competitive analysis then provides the necessary key data. Important decision-making situations include the following:

• Determining your own submarket: It is important to set the right course right from the start. Those who are now entering a market where there are already too many competitors, whose products are not significantly different from their own, could have a hard time.
• Making investment decisions: Entrepreneurs have to be extremely skillful with all resources. On the one hand, you have to keep up with the competition in important areas, on the other hand, it is also important to outdo your competitors. This can be achieved in the production area, for example, by using even higher quality products that are manufactured using expensive special machines. Such an investment must be carefully considered.
• Attracting investors and other forms of financing: Many entrepreneurs need money from third parties right from the start. Whether it is a bank loan, money from the crowd or a promotional loan – the donors must definitely be convinced. The competition analysis is particularly important because it ideally shows the great chances of success of your own company.
• Definition of tonality or your own advertising style: Every company should have a specific style that influences the overall external image. If possible, this should not be chosen too close to the most important competitors. This makes it easier to address target groups in a special way and not to look like an imitation of the competition. This area also includes the graphic design of marketing measures. If you put a new website online that works with the same colors and similar graphics as that of a competitor, you could even feel the legal consequences.

Data collection as part of the competitive analysis

Depending on the purpose for which a competition analysis is to be used, different data must be collected. First, the spectrum of competitors to be examined should be determined. For this purpose, for example, a specific region, a company size, a specific product portfolio, a sales volume or other key data are defined. All companies that fit this grid are examined in a structured manner. In the market analysis, for example, the peculiarities of directly competitive products or competitive services are examined:

• At what price are these offered?
• How are they advertised?
• Which target groups are addressed?
• What are the sales figures if this data can be collected?
• What customer service do the competitors offer?

Once the data for the competition analysis has been compiled, those characteristics can be highlighted from which the company can learn from in the sense of a benchmark. Those who have the advantages of the best on the market in mind, who can offer them themselves and who create additional benefits for customers, will benefit.

Possible data sources

In order to carry out a competitive analysis or competitive observation, a lot of perseverance and research skills are usually necessary. The procedure depends very much on which data should be collected. A good way to get a first overview of the market is often provided by the information provided by the federal government or the states and municipalities. As a rule, a lot of statistical data is collected here, which can be requested from the public authorities. When it comes to obtaining information about individual companies in the competitive analysis, one can consult the publications of these companies, among other things. For example, annual reports or quarterly figures are often available online. Information such as the visual appearance can be documented by screenshots of the competing websites and additional notes.

Display the market graphically – a clear instrument

In many cases, a market and competition analysis is developed by several people and then presented to important decision-makers. Therefore, not only must the content be correct – it is also important to give the document a clear form. Therefore, graphical representations are a welcome stylistic device within a competitive analysis. For example, competitors can be represented in a coordinate system, the axes of which are the price and the quality of the most important products. The business success, the corporate development of competing companies based on sales figures and much more can be graphically prepared.