Learn how to do External Analysis of a company (with examples)

Marketing Management Course
AllAssignmentHelp Academy
  • 33 lessons
  • 10 quizzes
  • 10 week duration

8.1 What is competitor and partner analysis?

AllAssignmentHelp Academy

Competitor and partners are two things. I have covered both in the same section.

Through competitor analysis you try to understand the companies that are selling products and services similar to you in the market. Competitors are competitors because they cannot be your friends. If two person is trying to board same bus, it is less likely that they will be friends. 😀

Same is with the competitors. They target the same customers and try to sell the same product at almost similar price.

If you know your competitor, it becomes easier for your take actions that are in line with that of the competitor’s strategy. Suppose your competitor is strong and going for market A, then you can go for market B. Another example, if your competitor is selling a product at $x, you can sell it at $(x-2) to attract customers who are price conscious.

Competitor analysis is very important because if you do not know your competitor, you will never know when they will eat away your market share. In order to stay longer in the market, you have to keep selling your product, and in order to do this, you have to have some market share. You have to have some customers to whom you can sell. How you can do this if all your customers are purchasing products from your competitors.

Therefore, know your competitors, even before getting into the market. You should know with whom you are fighting in the market. You cannot jump in the ring without knowing whose teeth to break!

Also, by knowing your competitors you come to know the strategies they are using. You will also know the resources they use and strategies they implement. You can either mimic those strategies, or you can build a better own.

Partners are just opposite to the competitors. They are your friend. They support what you do and the strategies you make because they gain profit out it. Some of the key partners are your suppliers. They provide you with the resources to build the product and cater to the market demand.

Suppliers can be of various types. They can be someone who provides you with the raw material, human resources, customer leads, or capital. Anybody can be termed as suppliers. But in business terms, suppliers are those who provide you with the raw material.

If you have suppliers who are better than the suppliers of your competitors, there is higher chance that you will create better products than your competitors. Therefore, companies make all effort to keep a good relationship with the suppliers who provide quality raw materials in a timely manner.

Cost is also of utmost importance in the business. Majority of the customers always look for products that are cheaper. If you have partners who provide you resources at low rates, then you may end up with producing goods that are of low cost. This will help you attract more customers than your competitors, assuming your competitors are selling the product at higher cost.