Why Every Start-Up Should Conduct a Competitive Analysis
When you’re launching a low-cost business start-up it’s tough not to be overwhelmed by the number of steps required just to get your product to market. Taking the time to conduct a competitive analysis can seem like a waste of time.
However, you have the advantage of seeing what is working for your competition. Very often you can leverage what they’ve already learned to actually save yourself time. In some cases, studying your competition can help you figure out how to increase the market demand for the product or service.
How To Conduct a Competitive Analysis
Start by identifying the top competitors in your marketspace. Do a simple online search using Google, yellowpages.com, or yelp.com. Pick five who are successful and review their:
- Products and Services
- Physical Location
- Marketing Approach
- Customer Experience
For each of your competitors, develop a strategy for how you’ll co-exist in the marketplace. For example your competition has:
- Both a bricks and mortar location and a huge online presence and you have a small EMAIL list of friends and family. Your mitigation advantage is you don’t have that overhead so you can produce your product less expensively.
- A mature product set and you have one or two products or services. Focus on marketing those products to a niche market they’re not targeting or improving your services using the feedback of your initial customer base.
- Can afford to advertise. Offer your initial customers a discount on their next purchase.
Keep YOUR Competitive Advantage
You’re the “New Kid in Town”. It’s important to remember you’re launching a new business and need a successful launch. Limiting your launch to a manageable set of customers or clients ensures you can successfully deliver your product and have experience with your complete business cycle. It may feel like an extra step, but it mitigates the risk of not being able to deliver your product successfully.
Leah Ward-Lee is a management consultant and business writer based on Amelia Island, Florida and the author $1,000 Start-Ups.