The importance of competitor analysis
Whether you're looking to start from scratch or refine your custom furniture store's sales strategy, understanding the concept of competitor analysis is crucial, as well as monitoring your actions to inform effective decisions for your business.
However, it's important to emphasize that this isn't about imitating your competitors. The goal is to understand the industry's main advantages and disadvantages and use them to your advantage.
After completing this reading, you'll be able to analyze the market meaningfully and develop action plans to differentiate your business with added value for your target audience. Ready to get started?
What is competitor analysis?
Competitor analysis is the process of recognizing the strengths and weaknesses of other players in your industry. During this assessment, marketing strategies, pricing, distribution channels, market share, and other relevant details about key businesses are analyzed.
This process begins with collecting market data. In the digital age, this task is even more accessible, as much information is recorded and can be obtained through online tools.
Next, it is essential to analyze the collected material, using graphs and reports to identify patterns and gain valuable insights into competitors' performance. This strategy provides the foundation that will enable better-informed decision-making.
How does this analysis work?
Competitor analysis works by identifying your competitors and understanding the marketing strategies they employ. This model generally consists of four steps:
identifying direct and indirect competitors;
identifying products, prices, locations, and promotional tactics;
developing detailed business profiles;
employing one of the competitor analysis strategies.
What aspects should be observed?
The main points to consider for better detail are:
target audience;
product;
service;
administration;
sales;
marketing.
With the data organized in this manner, examine the specificities of each sector, comparing them with the corresponding areas of your custom furniture store. Seek to identify specific solutions for your business, always exploring internal strengths and the weaknesses of your competitors.
This procedure allows managers to understand the growth potential that the strategy can provide to the company. Therefore, it is advisable to conduct this analysis at least once a year.
Furthermore, it is recommended to conduct a competitor assessment whenever there is a product launch or discontinuation, the opening of branches, or the expansion of the target audience, among other events. After all, this practice offers a more secure approach, ensuring more efficient financial management.
What tools can be used?
Below, check out the main tools for a detailed analysis.
SWOT Analysis
SWOT is actually an acronym for Strengths, Weaknesses, Opportunities, and Threats. Evaluating these four elements allows for a comprehensive assessment of both the internal and external environments of the business, playing a key role in the decision-making process.
Google Alerts
If you want to stay informed about mentions of your competitors on the web, Google Alerts is the ideal tool. It was designed to track content indexed by the search engine, sending email notifications to registered users whenever new results appear.
Social Mention
Social Mention offers practical, real-time competitor analysis. Simply enter the desired term into the tool’s search bar to access all social media mentions related to the brand you’re researching.
That was our article on how to gather crucial information for competitor analysis.
With this strategy, you’ll be able to identify the best areas to invest in your business growth, avoid unnecessary expenses, and optimize your time to improve your store’s profitability.
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