Six Ways To Effectively Analyze Your Competition

Let's be honest, creating and managing your small business is tough work.

A Word of Caution:

I see a lot of entrepreneurs getting into the trap of focusing too much on their competition that they lose focus on their own business goals and aims.

Don't put too much pressure on yourself.

Step back and understand your competition.

Your competition can give you amazing details about your target market as well as what works and what is trending.

Why Understanding Your Competition is Key

Your competition will tell you critical things about your chosen market, customers, and the best strategic marketing methods to use.

I am not saying copy everything that your competitors are doing. Rather, I am emphasizing the fact that through proper research of your competitor, you will be able to know what has worked for them and what strategies they are implementing.

Whether you would do the same or not depends on you as an entrepreneur.

The key is to research, observe and pave your own path to success from what you learn from your competitors.

The questions below have helped me to understand and analyze my competition and I hope they will help you in this process.

I will use my own answers at the end of each question to help you understand how to approach the question.

1. Who are your worst competitors? Name 3–5 of them

Perform rough research of your competitors. A quick google search will allow you to find at least 3 of your competitors. Follow their social media accounts, observe the design and content of their website and get a close look at their customers and followers.

My answer: Flow Kosmetikka, Pukka, and Foodin.

2. What are their strong points?

• What are their strong elements as a company? Observe their design, content, and wording.
• How are they presenting their information to the customers?
• Is it visual or more text-based content?

Try to think whether you are taking a similar approach and if not, what you need to change to stay in the game.

My answer: All their marketing and content is in Finnish. It makes it a little difficult for us since we will be starting off with minimal Finnish content and overall English.

This can be fixed by either hiring a VA who handles the communication aspect or translating the content into Finnish. Preferably, it would be wiser to learn the language whilst in the process of building the business.

Their consumer base is already established and they have been a few years in skincare markets.

Great packaging and branding

3. What are their weak points?

• What flaws do you see, if any?

Take a closer look at their prices, claims, and ingredients (if it's a product-based competitor).

My answer: some of my competitors offer lower quality products, as I have tried some myself. For example, one shampoo bar claims it is great for all hair types but when I tried it completely dried my hair and caused terrible frizz.

When I looked into the ingredients they were drying oils that are not suitable for dry frizzy hair. I would have appreciated them, to be honest, and be clear that it was intended for oily hair. The reason is that it has more antiseptic oils like tea tree compared to moisturizing oils like coconut, for example.

I believe the formula wasn’t balanced enough to be considered for all types of hair like what was indicated in the front packaging.

4. What are their products and services?

• What do they offer and how different is it from yours?
• Do they have a collection based on flavors or desired effects?

My answer: most of my competitors offer shampoo bars, serums, face creams, and teas. I have similar products and a series of collections too.

5. How do their products/services differ from yours?

• Are they targeted to the same group of customers you are targeting?
• Is there a difference in the design and style of your packaging or content?

My answer: In the case of one competitor, our products are targeted especially for people with dry sensitive skin whilst their products were for all skin types.

6. What sales promotion actions and advertising media do your competitors use?

• Do they make good use of their social media accounts?
• Are they using Google Adwords to create advertising campaigns?

My answer: Facebook, Instagram, and online stores promote their products.

A Few Last Words

The most important thing when you are analyzing your competition is to follow the simple principle of researching, observing, and reflecting on how you can stand out, rather than copy and paste.

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About The Author

Noor is a second-year business student at Tredu. She is also studying for a Diploma in International Smart Industry at Tampere University. She is passionate about marketing and content creation.