In the business world, a commonly repeated but often misguided motto is, "Do your own thing, don't look at others." While this may be a valuable principle in personal life, in a dynamic market environment, this approach can lead to serious strategic errors that do more harm than good.
A common and harmful belief is that competitive analysis is a redundant activity that only serves to duplicate solutions. It's time to dispel this myth and demonstrate that competitive analysis is an essential strategic tool, and that information has become modern gold in the digital age.
This article aims to explain why properly conducted analysis is not the same as copying, how to build a market advantage on its foundation, and how a professional approach to this process can be a key asset in the fight for the customer.
Why is competitive analysis not copying?
Competitive analysis shouldn't be treated as a manual to be mindlessly followed. It's a complex strategic process whose primary goal is to thoroughly understand the market environment and competitors' activities (including their advantages, plans, strengths, and weaknesses).
Many people perceive these activities as a "lack of creativity" – which is a false assumption. True analysis isn't about transferring ideas one-to-one, but rather about providing valuable insights and inspiration for developing your own unique strategies that differentiate your brand in the market. The idea is to understand what others are doing and then translate these observations into original concepts and solutions that build competitive advantage.
Analysis allows for more effective and targeted action. Thanks to it, we can, among other things, identify market gaps untapped by our competitors. This allows us to position ourselves in new areas and effectively compete for new customers and market share.
5 pillars of market advantage built on data
Competitive analysis, viewed as a strategic process, provides information that can be confidently translated into new actions or the optimization of existing ones. Below, you'll find five key pillars on which to build a long-term advantage.
Understanding the market and customers
Analysis provides a more complete picture of the market and helps answer key business questions, such as "why the competition sells more." These activities enable validation of market standards and adaptation of offerings to changing customer needs and expectations.
Full knowledge requires combining quantitative data (e.g., estimated traffic, number of phrases) with qualitative data (customer reviews, social media sentiment), which allows for understanding the context of rivals' actions.
Learning from other people's mistakes
Analysis allows us to identify strategies that haven't yielded the expected results for our competitors. This saves time and resources. Findings from examining rivals' weaknesses can be turned into our own advantages. For example, a company can capitalize on competitors' delivery difficulties by incorporating this aspect into its communications.
Identifying your own advantages and market gaps
Based on the collected data, you can assess your strengths and weaknesses against your competitors. The analysis also allows you to identify market gaps and trends that can be leveraged to create a unique selling proposition (USP). This is precisely how InPost found its niche, focusing on automated deliveries via parcel lockers instead of competing with traditional courier companies.
Making informed strategic decisions
Competitive analysis is the foundation of all marketing and business activities. It allows for decision-making based on reliable data rather than intuition or assumptions, minimizing the risk of failure and error.
Building a Long-Term Competitive Advantage
Knowledge of competitors increases the chances of success. It's key to implementing innovations that form the foundation of growth. The digital market is changing rapidly, requiring constant strategic adaptation.
Analyzing market trends like those in 2023-2024 reveals how crucial strategic thinking is. In today's volatile and chaotic environment, the battle for customers becomes even more fierce. In these conditions, competitive analysis is no longer merely a tool for accelerating growth, but a fundamental mechanism for defending position, maintaining profitability, and developing an advantage in a more challenging macroeconomic climate.
The most common mistakes and how to avoid them
Competitive analysis, if conducted incorrectly or inaccurately, can yield misleading results that lead to incorrect decisions of strategic importance to the company's future operations. To avoid this, it's important to avoid common mistakes.
- Superficial analysis and cognitive biases. Avoid relying on gut feelings or intuition. Instead, rely on data. It's also a mistake to ignore indirect competition, which often competes for the same customer time, attention, and budget.
- Lack of regularity and updating of data. Analysis isn't a one-time project, but an ongoing process. Data should be updated to continually adapt strategies to dynamically changing market conditions.
- Subjectivity and prejudice. Analysis can be prone to subjective judgments, especially when conducted by a team with strong emotional ties to the company. A sound process requires objectivity and a foundation based on facts, not assumptions.
Why is it worth entrusting competitive analysis to an agency?
Professional competitive analysis conducted by an external agency ensures the necessary objectivity and comprehensiveness. A team of experts can combine quantitative and qualitative data, avoiding the pitfalls of subjectivity that can easily occur within an in-house team. Expert analysis allows for optimal business decision-making while minimizing the risk of failure.
In an era where a company's image and visibility determine its competitive advantage, professional analysis is essential to standing out. An agency can help you develop a better offer, operate more effectively and with greater focus, and protect your company from the losses that could result from ignoring market signals.
Competitive analysis isn't pointless copying, but rather strategic thinking about development and innovation. It's an investment that provides a deep understanding of the market environment, developing a unique approach, and building a sustainable advantage.
Companies that ignore this tool condemn themselves to stagnation and falling behind more informed competitors. In a dynamic and changing environment, it's crucial to make informed, data-driven decisions that will secure the company's position and enable its stable growth. Investing in professional analysis is an investment in the future.
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