Small Business Pam Watson Korbel

Small Business Pam Watson Korbel
Picture of Pam Watson KorbelPam Watson Korbel is an expert on small business and revenue growth. She personally managed exponential growth in two companies: a software firm that grew by 500% in four years and a health care firm that grew by 1800% in eight years. In addition, she has been advising fast growth companies as a coach and consultant since 1996.

Competitive Analysis for Small Business

Competitive Analysis for Small Business

When it comes to effective competitive analysis, big businesses benefit from large staff resources and budgets for market research. That doesn’t mean small businesses should feel cheated. Several strategies and tactics are available to them to better understand their competitors.

Why do you want to know more about your competitors? Together with your competitors you define the marketplace for your prospects and clients because, as a group, you create messages that educate, inform and persuade your target market.

You want to monitor your competitors’ messages as well as strategies for product, pricing, market segments and distribution. For example, when a competitor launches a new product, it is best to identify that change from within rather than hearing it from a prospect.

The four steps to prepare a competitive analysis are:

1. Create a list of competitors.

Start a data base with client information so you can keep it all in one place. Include contact information, names of staff, products, locations, demographic data, etc. The additional information you want to gather should include:

  • Market share
  • Strengths and weaknesses
  • Target market
  • Barriers to entry into their target markets
  • Windows of opportunity to enter into their target markets

2. Identify the strengths and weaknesses for each

3. Analyze their opportunities and threats

4. Size them up – how do you compare? What competitive position can you take on?

5. Monitor – markets change quickly so a process to monitor your competitors is essential to remain viable and dynamic.

The techniques to monitor your competitors can be simple and highly informative. Here are some thoughts:

  • Set up a “Google Alert” for each competitor. This will inform you each time some content about them changes on the Internet. You will get notices about updates to their websites, customer reviews, etc.
  • Study the websites for each competitor and mine them for information. You can likely identify some of their customers or a customer list, news announcements, customer statistics, etc.
  • Monitor client reviews about the company.
  • Monitor employee reviews about the company.
  • Customer Surveys and Focus group – These tools can be inexpensive and helpful to find out about how your company is doing and about your customers’ experience with competitors. Find out why clients switched brands to you.
  • Look at databases at the library and/or run credit reports – Many resources exist that identify the size of your competitors – such as total revenues, profit and their credit rating. One company felt like a prospect was “bullying” them for lower prices and then through research the sales representative saw the competitor’s financial standing was not good and pointed that out to the prospect.
  • Hire a mystery shopper or engage colleagues in this process. Ask them to directly approach competitors about purchasing their products and services and then debrief them on the process.
  • If your sales process requires a proposal, ask your prospects/clients to share proposals from competitors or allow you to interview them about the other companies’ proposals.
  • Attend trade industry events and study the opposition plus talk to their prospects and clients.
  • Read trade journals and websites for information on trends.
  • Stay on the lookout for copies of sales brochures, marketing plans, annual reports, etc.
  • Monitor advertising.
  • Encourage your sales people to engage with sales staff from your competitors.

In this open-information culture, gathering competitive information is less and less difficult. Rather, securing competitive information has become a necessary and time-consuming task. Use technology as your ally. Remember, the bottom-line is all companies, large and small, are expected to understand their competition fully.

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