Today, where we can see there is competition, the competition starts from very early life.
Competition can be any type like in playing games, in the study, in some characteristics, in body structure, and many more.
Even this article which you read also reaches to you by fighting competition with another such article so first know the meaning of competitors.Competitor means someone who is our opponent who has the same abilities and characteristics as us in the same thing like playing games, in the study, etc.
But here we talk about Competition in the Market or the industry so let's also know the meaning of competitors in the context of the market.A competitor based on the market can be defined as a company, a business, or a particular person who sells similar products or provides similar services to consumers.
the exciting thing is that competitors belong to the same industry because if they belong to a different industry, they can sell their respective products easily in the market at their price.
But if competitors belong to the same industry and provide similar products then they can't sell the products at their price because if they sell products at more price than the competitor's price then consumers switch to the competitors.
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Let us understand this scenario with a simple example:
Example: A company named A sells something for Rs. 100 and the competitor in the same market or industry provides similar products and sells them for only Rs. 90 then from which company do you choose to buy the products? We buy the products from the competitor who provides us the same product in rs. 90 so now we understand about competition with an example. Now let us go in deep about competitors and understand things from close.
Example: A company named A sells something for Rs. 100 and the competitor in the same market or industry provides similar products and sells them for only Rs. 90 then from which company do you choose to buy the products? We buy the products from the competitor who provides us the same product in rs. 90 so now we understand about competition with an example. Now let us go in deep about competitors and understand things from close.
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Reasons Behind Competition
Now we understand the meaning of competition but what are the main reasons behind this competition, let us talk about them one by one.- Overpopulation: The first reason for increased competition is population as the population of a country increases, its resources become scarce because every person needs resources, and competition between them to secure resources increases.
- Innovation and improvements: As a new technology or idea comes into the market, the competition for existing businesses or organizations increases as customers always want up-to-date products so it becomes difficult for them to sell their products.
- Survival in the market: Today many businesses and companies compete with each other to survive in the market if they do not compete with their opponent and analyze their technique they remain backward from their opponents.
- Economic Growth: Today competition has also increased because every company today wants to earn profit and acquire a large market share so they compete with other similar companies and try to overcome them.
Read more: Competitive Analysis for Digital Marketing
Tools for analysis
- SWOT Analysis: SWOT stands for Strengths, Weaknesses, Opportunities, and Threats. To analyze the competitor closely we must know their strength in which things they work well and their innovation. We should learn about their weakness in which field they can't work properly and try to improve ourselves in that field to defeat the competitors. We also got an opportunity through some signals, so you should also get benefits from that opportunity. Some threats can hinder your progress.
- PEST Analysis: PEST here stands for Political, Economical, Social, and Technological. We must analyze the political, economic, social, and technological conditions of our country or the region that belongs to a market or industry and make rules and regulations, selling the products according to them.
- Porter's Five Forces: Competitor's strengths and numbers, supplier power to drive up the price, customer power to drop the prices, the substitution of our products, and the threat of new entry which impact us negatively are the five Porter's five forces a business must analyze to get success.
- Benchmarking: Comparing our products, financial growth, and operating efficiency with the market leader is an effective tool for analysis with the help of which we can find the areas in which we need improvement.
- Competitor Profiling: Get all the information about the opponent company, their background, their products, their strategy, their working environment, strengths, and weaknesses to analyze the competition.
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Types of Competition
- Perfect Competition: Perfect Competition refers to that type of competition in which a large number of firms compete with each other for similar products and only a single price prevails in the market and not a single firm influences that price. for example Agricultural products etc.
- Monopoly: In a monopoly, there is only a single firm in the industry and no other firm can take entry into the industry and that single firm has full control over prices.
- Direct Competition: In direct competition, the firm belongs to the same industry deals in similar products, and is present in the same market also. For example: Coca-Cola vs Thumbs up.
- Indirect Competition: In indirect competition, the firm belongs to a different industry but provides the same services to the customer and satisfies their needs in the same way.
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Data Collection Techniques
- Primary techniques: The primary techniques are very effective in knowing competitors' insights with the help of interviews, gaining consumer experience with the competitors, and gaining insights from stakeholders.
- Secondary Techniques: The secondary techniques and mediums for collective data are Magazines, and newspapers, monitoring their products, services, and strategic moves and getting news about them.
- Social Media and Web Analysis: Monitoring every aspect of their new products, services, and strategic moves on their social media handles and research about them with their analytics and stats also helps in data collection.
Now we learned how the competition begins, what competition is, how to do the competition, how to analyze it, and what the tools are to analyze it. Now there are some precautions while doing competition we sometimes acquire the wrong way competitors to compete with them and earn much profit but it is wrong because we should acquire only the good and right way for competitors to compete and we should also not promote black marketing, defective services and goods and adulteration to earn profit. We should keep customers first and our priority and then we should keep competition in our mind.
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What is competition?
Competition simply is a term used in market which means to compete with other opponents in the market in the similar industry or different industry ( but satisfy same needs of customers) and always try to make good products then competitors.
What is demand?
Demand is that quantity which is demanded by the consumers at a particular point of time and at prevailing price.
What is supply?
Supply refers to that particular quantity which is supplied by supplier at a particular point of time and at given prices.
What are the tools for Competition Analysis?
Demand and supply theory, SWOT analysis, PEST analysis, and social media are some tools for competition analysis with the help of which we can learn competitor insights.
How many times should I do the competition analysis?
You can conduct a competition analysis every 3 months or quarterly.
