Competitor Analysis

Competitor Analysis
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All firms compete with each other for business. Competition can be defined as those firms that have products/services that are similar or can be substituted for the business products in the same area.

The extent of competitive rivalry will depend on

The number of competitors and their size.
The rate of growth in the industry.
The levels of product differentiation.
Any entry/exit barriers.

The level of competition will be influenced by the number and types of competitive tools used by competitors. Once a company has analyzed its particular competitive environment and decided which factors in that environment it can or must adapt, it should then be able to strengthen its market position.

We can look at the competitive environment by using some of the marketing mix elements:

PRODUCTS - Build a quality product. Create product guarantees and establish full back up support for consumers.
DISTRIBUTION - Ensure you have an effective distribution network for your products. This will means looking at effective stock control systems, material handling, and transportation methods, reduce the total distribution network as much as possible.
PROMOTION - Develop a sales strategy to promote your products/services.
PRICE - Analyze your competitor prices, and see how they compare to your business, adopt price reductions, offer discounts, etc.

Monitor your competitors, look at the strategies they adopt and apply them to your business. Information will be available from direct observation or external sources such as salespersons, customers, trade publications amongst others.

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