Talking Cents

The importance of competitor analysis

In order to thrive in a competitive market, you must be able to differentiate yourself. However, it is difficult to differentiate yourself without researching your competitors. Competitor analysis will help you build a competitive strategy and make your business stronger in the long run. Here at M.A.S Partners, the leading small business accountants in Sydney, we understand the importance of competitor analysis, and the impact it has on a business. As such, we have provided some tips on how you can get started, and explain why you need it for your business.

The benefits

It is not enough that you only worry about your business, but you also need to consider what your competitors are doing. They have achieved things that you want- serving a similar market, and it is important that you learn from them. You are able to learn what they do well as well as  what they lack. This research can help you understand your competitors in order to differentiate your business from the competition.

Establish who they are

When analysing who exactly your competitors are, you must understand the different types of competitors. Obviously there will be competitors who sell similar products or services as you- selling to a similar target segment. However, you also have competitors that compete to sell to different types of people, and act as a replacement for your service or product. For example, smart phone companies competing against landline companies.

Identifying strengths and weaknesses

As mentioned previously, you must analyse your competitors’ strengths and weaknesses. You can do so by asking around- reading reviews, or even asking the customers personally. As you learn more about your competitors, you learn more about your customers as well. You will understand which competitors will be the biggest threat.

What differentiates them?

Every successful business should have something that differentiates them. When doing a competitor analysis, think about what others cannot replicate. This could be patents, exclusive supply, premium products, competitive pricing, or even customer service. By finding out how they differentiate themselves, you can establish how your business is unique.

Consider hiring a small business accountant

Here at M.A.S Partners, we help all our clients develop their business through our small business accounting services, as well as advisory. Many business owners are inexperienced, and do not understand the steps they need to take in order to grow. By hiring a small business accountant, you receive expert advice, whilst having your finances effectively handled stress free. Our small business accountants understand what your business needs. We know that every client is unique and provide specialised advice that will help your business develop through our small business accounting services. For more information on our business accounting, click here.