In our series looking at the situation analysis aspect of the SOSTAC planning framework, we are today looking at competitor analysis.
Competitor analysis is a crucial part of the SOSTAC planning framework, developed by PR Smith. It is the process by which a business looks at its competitors, strengths and weaknesses, and then makes decisions. It is a step that is often overlooked and sometimes avoided by new managers due to the complexities involved. The truth is, marketers should not avoid competitor analysis as, for most businesses, it can be conducted relatively quickly with some simple desk research.
Why is Competitor Analysis Important for Digital Marketing Planning?
The goal of competitor analysis is to understand the competitive environment. It also helps understand competitors' key strengths and weaknesses and their strategies. This information can improve your products and services and be used for marketing purposes.
A competitive analysis template is an excellent way to organise data about your competitors so that you can easily compare them with your own company. You should complete one template per competitor and populate it with as much information as possible, such as their name, address, phone number, website address, social media accounts, annual revenue etc.
What are the Core Steps of the Competitor Analysis Process?
The first step in the competitor analysis process is to identify your competitors. You should take into consideration both direct and indirect competitors.
It is essential to take into consideration both your direct and indirect competitors. Direct competitors are those other companies in direct competition with your business. Indirect competitors are those companies who may not be in direct competition with your business. Still, they offer a product or service that could serve as a substitute to your offering when it comes to satisfying your customer’s needs.
The second step in the competitor analysis process is to understand their business model, which will help you formulate a plan for your business model.
The third step in the competitor analysis process is to study their marketing strategy, which will help you understand how they reach customers and what channels they use.
The fourth step in the competitor analysis process is to study their sales strategy, which will help you learn about their pricing strategies and target customers
Consider both your direct and indirect competitors. Indirect competitors offer a product or service that could serve as a substitute to your offering when it comes to satisfying your customer.
How to Conduct Competitor Screening Process?
The competitor screening process is an important step in the business plan. It helps to identify the strengths and weaknesses of your competitors.
The following are some of the questions that you need to answer during this process:
1) What are your competitors’ strengths?
2) What are your competitors’ weaknesses?
3) What is your competitor’s market position?
4) How do you compare with your competitors on price, quality, service, etc.?
5) What are their marketing strategies?
6) What is your competitive advantage against them?
How to Conduct Gap Analysis in the Context of Competitor Analysis?
Gap analysis is a technique that can be used for competitor analysis. It is a tool that helps to evaluate the difference between one's own organization and its competitors.
The first step of gap analysis is to identify the gaps between one's own organization and the competitors. There are two types of gaps: strategic and operational gaps. Strategic gaps include things like marketing, branding, and positioning strategies while operational gaps include things like product quality, customer service, and pricing.
The second step is to figure out what should be done in order to close the gap. The third step is to make sure that these actions are executed accordingly in order to close the gap with time.
How to Use the Findings from the Audit Process in Your Own Campaigns
The insights in this audit process can be used to improve your campaigns. You should ask yourself:
- What do I want my audience to feel?
- What is my message?
- Who is my audience?
- What are the benefits of what I am offering?
- How can I make it more relevant and attractive for them?
The competitor analysis is just one of the elements that form the situation analysis section of a digital marketing plan using the SOSTAC planning framework.
Download our Situation Analysis Template to start your digital marketing plans off the right way this year.
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