Tips to gain a competitive edge using competitive intelligence services
Companies that are planning to start a new business or even those that are on the lookout for a competitive edge for their already prevailing business can make use of the competitive intelligence agenda or structure which would be of great help in all their efforts. The competitive analysis differs from SWOT analysis that a company engages in the study of a business scenario and the market research that it undertakes.
A company can make the best use of How Competitive Intelligence Helps in Devising Better Marketing Strategy to set up a competitive edge over its rivals in the following ways:
As a warning to study the risk arising from the entry of new players in the field
The entry of new players in the market can pose a danger to an existing company if the new entrants start grabbing the market share. This is where competitive intelligence service provides an edge through analysis of certain factors such as the following:
- The amount of capital investment needed by the rival to make its presence in the market.
- Government regulations that might affect the new players.
- The feasibility to use the distribution network for the new entrant.
- With the help of competitive intelligence, an organization can gauge the level of threat posed by the new entrant and if it is high, needed action can be taken on the same.
To find the supplier’s bargaining power and understand how it is likely to impact revenue of the company
If the market is well-organized and comprises of fewer suppliers who have good control over the prices and the conditions of selling, then it means the organization is likely to face a threat from them. On the contrary, markets having many players may end up posing a lesser threat and prove more attractive for the business.
Study of substitute products
Substitute products are typically those products that come from other industry but offer the same benefits that your products offer. The reason to consider the substitute product as a threat is due to the advantage it offers consumers as they can easily shun your product and go for the substitute product. Competitive intelligence study based on prices, quality and other factors enables a firm to understand how consumers are likely to switch from using your product to the substitute products and the steps taken to prevent the same.
Analysis of the purchasing power of the consumers
A market with very few buyers gives an edge to consumers to switch to competitor’s product offering low prices. In such a scenario, the consumers end up controlling the prices as well as lay down the purchasing terms .Thus, the buyers pose a threat in such conditions. In situations where the pricing of your product is way high above your competitors then even if the consumers ends up buying your products in less quantity, you stand to gain an attractive share of the market.
Last but certainly an important factor is to study the power of competition between different companies. If an intense rivalry prevails among the already existing growing industries then it might prove to be in attractive for the new entrant.