To identify your competitors it is worth conducting market research. Market research is a process used to gather information. There are two main types of market research: desk research and field research. Desk research uses information gathered from books, articles and the internet, whilst field research focuses on gathering information externally from surveys, phone and post.
It is advised to use different research methods to allow you to get a picture of how your competitors operate. It is imperative to use the information and act on it if you want to be ahead of the game.
A good way of doing this is to conduct a SWOT analysis of your competitors. A SWOT analysis is a strategy used to identify the strengths, weakness, opportunities and threats of a specific area of your business for example, staff, premises, suppliers etc. Consider completing a SWOT analysis on a regular basis as your business is likely to be affected by factors such as political, environmental, social and technological. It can also be affected by a change in government, a change in the market, how people buy and how people engage with technology.
Completing a SWOT analysis on your competitors can help you understand their price, target audience and how they operate. Once you have identified your competitors it is important to compare your business to theirs; understand their advantages, disadvantages and to create a competitive edge over them.
Below are questions to consider when completing a SWOT analysis:
Strengths - This includes factors within your business that you are in control of such as money, skills and your network. You may ask the following questions in your competitor analysis: What are they doing well? How can you replicate this? Why do customers buy from your competitors and not you?
Weakness - What areas of your business can be improved? How does your business compare to your competitors on issues such as staff, location and opening times? What are they not doing well and how can you capitalise on it? What could they improve on?
Opportunities - Determine factors that have a positive impact on your business such as market growth, timing and the market environment.What new products or services does the market offer? What opportunities can you identify?
Threats - Identify factors beyond your control that can pose a risk to your business such as technology, markets and equipment. For example if an item of equipment breaks down do you have a back up, or could you borrow or rent one? What are the potential threats to your competitors business? How can you minimise the risk?
If you follow these basics steps you should be in a position to have a clear picture of how your business can stay competitive.
But Netflix faces increasing competition from online rivals such as Amazon and Hulu, while television networks start to launch their own streaming services and make new shows available in binge-ready box sets.