Knowing who your competitors are can be decisive in determining whether your business succeeds or not. Those who act rashly and are not aware of what’s going on around them are likely to fail. But how do you find this information and what should you do with it? How do you stay one step ahead of your competitors?
Research your competitors
That knowledge is not just there for the taking. You must be prepared to invest some time into doing research. It’s best to do this before you draw up your business plan, because a competition analysis is also an essential part of it.
In order to know your competitors, you need to analyse the market, i.e conduct market research. There are several ways you go about this. If you have the finances to pay for it, you can hire a specialised agency to research the market for you. However, you can also do it perfectly well yourself.
For instance, you can find out on the Internet who exactly your competitors are by googling keywords related to your planned activities or by going through the online version of the Yellow Pages.
Research what your competitors are doing
Knowing exactly who your competitors are is a good start, but certainly not enough in itself. You also need to know what they do, how they market themselves and preferably how well they are doing, too.
- You can use VAT numbers to learn a lot about your competitors’ turnover, balance sheet and results. Make good use of this information. If you identify competitors that are not faring so well, it might be interesting to focus on them first and drive them out of the market. It also ensures you avoid taking the decisions that have led to the situation they are now in.
- You can pick up a lot of sector-specific data and statistics from the FPS Economy that will give you more insight into the sector and the local economy in general. That can be useful in assessing how to position yourself and which prices to set.
- Lastly, try to gather as much peripheral information as possible about your competitors from websites, leaflets, advertisements, catalogues, etc.
Research now what you should do
Basically, it comes down to this: if you know what and how your competitors are doing, you also know what you should do or best avoid doing.
For instance, your competitors may well provide very poor quality goods, but still have many customers and benefit from wide margins through economies of scale. You then know that, in your sector, people don't mind buying lower quality goods. If you also notice that competitors selling high-quality goods are not doing well at all, you know it’s definitely worth looking into providing less quality at a lower price. You’ll still have to try to stand out from those competitors that have already adopted this approach. This can be done, for example, by charging slightly higher prices for a higher quality product or by being a little bit more expensive but providing a superior service.
Last published on: 03-11-2016