When was the last time you analyzed the competition for your business? If you are like most small businesses, it has been a while or maybe it has never happened at all. Before you can analyze your business’s strengths and weaknesses, you need to understand your competition for comparison. A competitive analysis helps you understand what your competitors are doing from both a business and marketing perspective. Knowing who your competitors are and what they offer can help you determine what you need to do to make your products, services and marketing stand out. Understanding your competition and how you differ from them enables you to develop a plan that takes advantage of their weaknesses and differentiates you in a way that gets you visibility with your target audience.

Who is your competition?

The first thing to do is to understand who you compete with. Your competition is any company that competes for the same dollars that you are trying to acquire. If your business is personal training, you not only compete with other personal trainers, but you also compete with health clubs, marshal arts centers, country clubs, fitness centers, and any other business that is going after the discretionary spending of the consumer in the area of health and fitness.

In addition to established businesses that you directly compete with, also be aware of any new product or service that may enter the market that could take business away from you. Renting a movie from your local store used to be the only way you could get the latest movies on VCR or DVD. Now, there are online services, subscription services, and cable services all offering the latest titles. Knowing this trend is coming allows you to respond quicker and develop a competitive offering or move into another market all together.

Understanding the overall market for the types of competition is a good start. Next you should research a couple of specific, direct competitors, and use the Internet to track down similar products or businesses. Information gleaned from similar businesses can be used to get ideas on how to improve or better market your business. For example, an executive coach may analyze a couple of direct competitors but also may look at what other types of coaches do to market their services and gain expert status.

What do you need to know?

Once you have your list of competitors, then you need to determine what you want to know about them. Learn as much as you can about your competition. Depending on your business, you may want to understand their product and service offerings and how they price, market, sell and service them. Knowing how they speak to the customer through their web site, marketing campaigns, and sales organization can help you determine if you need to make adjustments to your own messages and marketing activities. Try to find out how they treat their customers. Ask people you know who has done business with them what type of experience they have had, both good and bad. Your competitors’ positive qualities may be far more useful than only hearing the negative.

Finding this information has become much easier now that most information is posted somewhere on the Internet. For specific competitors, review their websites, marketing literature, trade journals, local newspapers and your local Chamber of Commerce. Search the Internet for a wealth of objective information about your competition, including the good, bad and the ugly. Negative information can be used to help you identify areas where you have strengths and you may want to exploit more fully. I don’t recommend using negative information against them, but learn from their mistakes to make your company a stronger, more appealing entity to your prospects.

What do you do with all this information?

The value of having all this competitive information is that it gives you insight into what your competition is doing, both in terms of business processes and marketing programs. You can use the information to determine what you need to do to better position yourself away from the strongest competitor, develop a marketing strategy that makes you stand out from the weaker competitors, all while learning to do things better from your most successful competitor. Learn as much as you can from them and use this goldmine of information to determine where you need to improve.

Watching the competitive landscape can give you a lot of information on how you can better reach your prospects, improve your image, update your messages, and gain a competitive advantage. The competitive landscape is always changing. It is important to always keep your ears and eyes open to what has changed, what is working and what is not. Keeping your analysis up, to date ensures you can make adjustments in your business that may gain you the visibility you want.