Why You Need Competition Analysis
Updated: Sep 28, 2020
It’s More than Just Side-Eyeing the Competition
Competition analyses are commonly overlooked at first view. We promise - they’re important! That’s part of why they’re a noted part of our service packages. Knowing your competition is more than being the candy company stalking the Willy Wonka Chocolate Factory gates. Rather, the modern version of competition analysis is 100% ethical, and it can be a tool for both parties! In the context of a medical practice, you may be thinking “but aren’t a dentist and a dentist the same?” Yes...and no! Let’s dive in!
Getting to Know the Competition
A competition analysis may include some or all of these factors. Depending on the size of the industry, location, and distribution channels, some competitors may be more direct or indirect.
The 4 Ps
If you’re familiar with marketing lingo, you may know the 4 Ps stand for Product, Place, Price, and Promotion. Here are some questions you can ask about your competition.
Product (/ Service)
What are they selling?
How is the product used?
What does the product look like?
What is the product name?
What features does the product have differently from yours?
What market is the product for?
How can consumers access the product?
What distribution channels are used to deliver the product?
What supply channels are used to distribute the product?
Where are your competitors located? Is this relevant to your types of product?
How does your pricing model compare to theirs?
What value does their product bring compared to yours for the price?
Are there industry-established price points for this product?
Do competitors offer discounts, loyalty programs, or other opportunities to offer lower prices?
What channels are used to market the product?
Who is the product marketed to?
When is the best time to promote the product? Is this a seasonal product?
Every business has something that is their big #1. It’s your core competency. Think about how many brands of toothpaste there are - Crest has found a way to use their core competencies to sell more toothpaste than any other toothpaste company in the U.S. Your core competency provides an understanding of how you and your competitors can compete most effectively. Here’s an example:
You’re a cancer specialist, and Dr. Competitor the next street over is a cancer specialist, too. You both offer essentially the same services and treatments, and you’re practically equidistant from your patients because your offices are so close. What makes you special versus what makes them special? Perhaps you partner with the local florist next door, and you always have fresh flowers in the waiting room to brighten the mood. You love the way it makes your patients feel, so you also incorporate free coffee and magazines in the waiting room, too. You then train your receptionists to use the friendliest greetings and provide elite service. Suddenly, even though you offer the same treatments, your patient experience is lightyears better than Dr. Competitor’s. You’ve found your core competency!
Another marketing tool, perception charts are two aspects placed on an X and Y axis that compare you to your competitor. For example, you might want to compare the price and services offered. Perception charts are a great tool to understand where you are currently, versus where you would like to be in relation to your competitors. Here’s an example below from GroupMap:
Market share is a great tool if you’re seeking to scale your business in a particular area. To calculate market share:
Market Share = Sales / Total Sales of the Industry
You can do this with your business and your competitors to see how you compare. After calculating market share, ask yourself what factors contributed to that calculation.
Their Resources vs Yours
Every business has different resources. Perhaps you come from a family of medical practitioners, so you grew up learning how to manage an office. Or, perhaps you have a great relationship with your suppliers, so they often give you early access to special products. No matter what your situation is, every company has different resources. Take an inventory of your competitors’, and see how they differ from yours.
Company Brand, Mission, and Vision
Your brand is the heartbeat of your business. Your brand is, and should be, different from your competitors. Working with a brand developer can help you create a unique essence of your company to effectively differentiate from competitors in all areas of your marketing. For example, your company may have a different target market than a competitors, so you’ll want to use different marketing channels to reach your market.
Why You Need to Analyze Competitors
You may be thinking “but I have great patients! Why do I care what Dr. Competitor is doing?” Here are a few reasons:
Awareness of Your Surroundings is Always a Good Thing - It Keeps You Up to Date on New Happenings of Your Industry
It Can Help You Establish an Effective Brand
It Can Help You Establish an Effective Niche
You Can Target the Right Market
Where to Find Competitor Info
Here are a few places you can find information on your competitors (without sneaking around their gates!)
Talking with Your Competitors (Yes, you read that right!)
Visit Competitor Location (No trench coat and sunglasses, please!)
Look at their Advertisements
Talk with Your Employees
Talk with Your Customers
Understanding your competition will help you gain insight into improving your own systems internally. Sounds like a lot of work? Adam Kae & Associates can help! Book your complimentary 1-on-1 today HERE.
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Disclaimer: This article contains information and opinions from Adam Kae & Associates, and the information and opinions should not necessarily be seen as the best possible solutions for your business. Please contact us at email@example.com to help you find the best solutions for your business.