What is the Importance of Competitor Best Practices?
The competition across industries has exponentially risen due to significant surges in demand, the rise of prices, new emerging markets, leading to an increasing need for competitor analysis and competitor best practices. As companies enter markets or aim to expand within their market, they face the challenge of understanding their market, identifying their competitors, and ensuring their offerings match or surpass industry benchmarks. To maintain an in-depth understanding of their market, companies must evaluate their competitors’ strategies, understand their position and market share, and improve their competitors’ offerings. A well-researched and data-driven competitor analysis can help companies preemptively identify new trends, improve their strategies, stay a step ahead of the industry curve, and maintain a strategic advantage in a challenging market. By leveraging competitor best practices, these organizations can also reduce costs, improve profitability, ensure their strategies are at par with competitors, increase customer satisfaction, and champion their industry.
Developing a robust category management plan is essential to build an edge over competitors. With the help of these competitor best practices, you can seamlessly create growth strategies for your business that align with procurement excellence. Request a FREE proposal to learn more about how solutions of offered by SpendEdge can carve a bright future for your business and sourcing goals.
What are Five Competitor Best Practices Organizations Should Use?
Determine Objective: A clear objective can help a company determine its plan, approach, tools, and ultimate targets with impeccable clarity and efficiency. Having a clear, predetermined target can enable streamlined processes, targeted research, acquisition of relevant data, and reduced time consumed by this task. Therefore, companies must know their objective, their reason for conducting a competitor analysis, the targets they wish to meet, the improvements they sought to incorporate, and the competitors they want to overtake in their growing market. With this competitor best practice, professionals ensure they identify the right competitors, study the relevant factors, and procure data that is necessary and helpful, rather than collect irrelevant data that consumes more time and effort and delivers no results.
Conduct Comprehensive Analysis: An imperative rule when conducting a competitor analysis is ensuring all necessary metrics, parameters, and potential contributors to success are thoroughly analyzed to meet the targets and objective determined by the company. When studying a competitor’s market share and success, it is also necessary to assess their costs, profitability, and savings if publicly available. Additionally, reviewing competitors’ technology strategies and marketing initiatives can help identify new technological developments and differentiate between successful and ineffective marketing initiatives with clear data and a proven example. Closely analyzing these factors can provide unparalleled insights and is a necessary competitor best practice.
Assess Customer Satisfaction and Service: In any industry, a company is as strong as its customer base, and companies must evaluate their competitors’ customer ratings, reviews, and satisfaction levels when conducting a competitor analysis. This practice helps to provide insights into successful and unsuccessful customer service or experience initiatives and helps companies identify unmet needs in their market to target. Additionally, evaluating the customer service approach adopted by the competitor can help companies avoid previously conducted errors and create a data-driven strategy to improve customer satisfaction, customer service, and overall retention rates. Further, by targeting competitors’ shortcomings, the business can attract more target audiences and reduce attrition chances.
Continuously Review and Track: A competitor analysis is a necessary regular process to track the impact and changes of their key competitors in the market and their performance. This process also helps keep pace with trends, identify new technologies, introduce preemptive initiatives before competitors, and make constant improvements to their business plans. With in-depth insights into their competitors’ strategies, performance, market share, and customer satisfaction, the company can further improve its systems, stay ahead of competitors, and surpass industry benchmarks. Additionally, this ensures routine change, growth, and evolution within the company and helps teams improve their approaches with data-driven strategies and unexpected changes.
Avoid Narrow Vision: A common error while conducting a competitor analysis is limiting the number of key competitors, metrics for comparison, tools and approaches, and strategies are chosen to gain proper insights successfully. In wide, rapidly growing industries, companies will often face many competitors, including growing small businesses, new market entries, small subsidies of major companies, and industry giants. Usually, the firm’s size does not determine success, and companies must ensure they identify and choose competitors as per their level of success rather than size. Failing to account for all relevant competitors, can lead to uninformed strategic decisions, absence of crucial data, falling behind the curve and competitors, and losing ground to unexpected contributors. This competitor best practice can help companies avoid major unexpected challenges, stay a step ahead of their competitors, and meet their predetermined objectives with ease.
A thoroughly researched and data-driven competitor analysis can transform businesses and help companies achieve their ultimate business goals. Recently, SpendEdge helped a growing surgical equipment manufacturer to conduct a comprehensive competitor analysis, identify their shortcomings, adopt new and improved strategies, and overcome the impact of the sudden upsurge in demand. The manufacturer had witnessed a decline in sales, while competitors continued to grow and acquire large partnerships during the sudden rise of demand for surgical equipment globally. As time passed, the company struggled to meet targets, maintain profitability, and customer attrition rates rose steadily. Therefore, the client worked with SpendEdge experts to leverage competitor best practices to determine the challenges impacting their business and evaluate their competitors’ strategies, business models, new initiatives, and customer satisfaction rates. With this information, the client successfully adopted efficient strategies, devised initiatives to target unmet needs in the market, increased customer attraction and retention, and made a significant recovery in profitability, market share, and growth trajectory.