At Snipply, we’ve been producing guides on how to build your startup as a brand. This is important as users will always compare you to something else more familiar to them. “Oh, so you are Seamless for Office Products.”
Every business has competitors even if they are indirect, or it is just the status quo of existing operations. Whether or not you believe you have direct competition, the market itself will decide whether or not your solution has alternatives.
How your brand is positioned against competitors is massively important in terms of building and growing your company. As a startup, you not only need to know who else is providing competing solutions but how your brand compares to theirs — favorably and not.
By understanding the competitive landscape you’ll be able to:
- Understand where your value prop fits or needs to be refined
- Understand correct pricing
- Predict competitor reactions to your entry or changes in offering
- Understand competitor weaknesses
- Better understand user or customer acquisition channels
- See what worked for them and use it for own benefit
- Refine messaging and customer segmentation
It’s critical for your business to know as much as possible about your competition. Your potential investors will pit you against them, and your potential customers will as well. Not only that but understanding the competitive landscape is crucial for customer retention.
You’ll need to understand these three things:
- You’re not alone in the market — From this BizzBee post — “…the first thing you should do is recognizing who they are. What sorts of products or services do they offer and in which segments of the market they sell these services? In addition, as a startup, you must be aware of the hurdles that can obstruct your market entry. Each of your competitors has its share in the market. And your target market allows few competitors at a time.”
- Competitor’s strengths and weaknesses — From the same post — “The next thing that a startup must do is recognizing competitors’ strengths and weaknesses… if you’re entering a relatively new market that doesn’t have any competition, then you’re in pole position in front of your potential competitors.”
- Understand your competition’s value proposition and branding and where you fit — This is part of a series where we’ve walked through user personas, value and brand propositions so if you need to catch up check out the Snipply blog.
Now for the exercise, we’re going to write down answers for the following areas.
Identifying & Understanding Your Competition
- Who are your business’s key competitors?
- Who are your business’s key competitors?
- Has this competitive set changed in the last three years?
- Who do you consider a benchmark organization?
- What are the market dynamics in your region?(what keeps you awake at night)
Social Trends In The Market:
- What are the key social trends currently affecting the market?
- What are the social attitudes users exhibit towards current products and services?
- How do these factors impact consumer buying habits?
Technology Trends:
- Are there any key technology trends currently affecting how you provide IT consultancy?
Size & Growth Of The Market:
- How developed is this market?
- How quickly do you expect the market to grow in the next three years? What is underpinning this growth?
- What barriers to entry are there in the market, such as technology, distribution, regulatory, economies of scale?
- What developments do you expect in the next three years?
- What risks are there to the future growth of the market?
Political & Economic Factors:
- How stable is the political environment?
- How is this affecting the market?
- What is the current economic situation e.g. GDP, interest rates, inflation, disposable income?
- How is this affecting the market?
- What are the economic risks going forwards?
- Will government policy influence laws that regulate or tax your business?
- As an industry, are there any changes you would like to see to existing policy?
If you understand your users — demographics, psychographic profile, professional characteristics, goals, challenges, etc. — And you understand your competition, then you are on the right path to understanding exactly where your company and its products or services fit.
Answering these questions is a great way to start building your brand positioning as a startup. Your user personas, purchase behavior, brand drivers, and competitive analysis will end up being invaluable in scaling your company from early adopters to majority users.
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