Using Competitive Analysis to Spot Potential Threats to Your Business

Building a business is hard enough, but staying successful for the long term is the true test of business success. Any company that manages to last beyond the first few years does so because they recognize an important truth: you can never get complacent.

Your industry—no matter what it is—is going to encounter changes. At some point, your company will face a threat you didn’t see coming. New businesses that come onto the scene. Shifting expectations from customers as their needs evolve. New technologies that change consumer behavior or require a new approach to marketing and sales.

Being at the top of your game one year is no guarantee you’ll stay there. You’ll always be better equipped to weather the threats to come if you’ve prepared for them in advance. And you actually can see a lot of threats coming if you make a strategic effort to be more proactive in identifying them.

There are three main phases to developing a good process for proactive threat identification. And incorporating competitive analysis makes all of them stronger.
 

Business Threats-CI-Framework

 

Phase one: identify all main threat areas

Try to think through all the different types of threats your company could face. What forces from without have an influence on your success? Some of the most common threat areas companies deal with are:

Competition
One of the biggest potential threats to your business is having competitors come onto the scene that offer a similar product, possibly for less money, with added features, or simply with a more successful marketing schtick. This can happen with entirely new competitors, or with long-term ones that release a new product or update that more effectively pits them against yours. A successful enough competitor can eat into your customer pool and siphon business away, unless you react to the threat in time. That makes a competitor analysis an important part of any threat identification program.

Industry trends
History is full of companies that went under because of industry changes they couldn’t control and didn’t adapt to. In recent years, companies in web design had to get on board with designing for mobile screens, or risk failure. Companies that sell clothes have to stay on top of consumer style preferences. Video rental companies had to adapt to the rise of streaming media. The same is true in every industry. Paying attention to what the changing norms and expectations are within your industry is important for not falling behind.

Economic conditions
When the people you’re selling to have less to spend, it affects their purchasing decisions. Economic conditions aren’t something you have control over. And even economic experts struggle with accurately predicting what will happen in the economy. But it’s still worth doing your best to follow larger economic trends so you can anticipate the shrinking or expanding budgets that will influence your sales.

Politics and government
Whatever your personal politics may be, government regulations or a changing tide in political sentiment can have an effect on business. While this definitely comes into play more in some industries than others (anything involving healthcare, the environment, or consumer safety, for instance), it’s something every business can benefit from thinking about. You don’t want to be unpleasantly surprised by new regulations that completely upend your business model.

Supply issues
Whether your main business is in selling products or supplying services, you have to have the supply to meet customer demand. If something threatens your supply source—problems with your main vendor, weather conditions, a limited workforce that has the skills you need—you want a head’s up so you can prepare for the disruption.

Consumer trends
Consumer needs and preferences don’t stay consistent. The types of products they seek out, how they make their decisions, and what they value most in a brand are all subject to change with the times. Maybe your audience prioritized price and product quality five years ago, but has increasingly started to give priority to brands that share their ethics or those that promise convenience. Such changes are important to track and recognize.

Technological updates
Consumer needs and preferences don’t stay consistent. The types of products they seek out, how they make their decisions, and what they value most in a brand are all subject to change with the times. Maybe your audience prioritized price and product quality five years ago, but has increasingly started to give priority to brands that share their ethics or those that promise convenience. Such changes are important to track and recognize.

Every industry is influenced by changes in available technology. Whether that’s improvements in the products your company uses day in and day out to do the main part of your job, changes in how customers find and interact with you, or new technologies that come onto the scene cutting into your market. Across the board, you need to pay attention to technology trends relevant to your business, so you can stay up to date and spot potential threats before they hurt you.

Make a list of everything you can think of. The more the better, as being comprehensive decreases your odds of overlooking any significant threats.

 

Phase 2: Create a strategy for actively monitoring each one

Proactive threat identification requires knowledge first and foremost. You have to know what’s happening in real time, and what experts anticipate is coming soon. With all the threat areas you identified, that means following and tracking a lot of information sources.

Clarify who’s responsible.
This kind of ongoing information monitoring takes work and time. If it’s going to get done, someone’s gotta do it. And you need to be clear on who. Clearly assign responsibilities to people in the company for which threat areas they should monitor. And make sure there’s room in their schedule to add it into their workload, or it just won’t get done.

Make a list of information sources to track.
Go through your list of threat categories one-by-one and figure out who you should be following for each. For your competitor category, define who your main competitors are. For industry trends, figure out the top publications covering news in your industry. For economic, government, and political information, follow local and national news sources that cover each. And for consumer and technology trends, lots of business publications regularly report on both categories.

Identify tools that help track and organize data.
Staying on top of the news and trends in all the categories on your list will be work, but you can make sure it’s a lot less work with the right tools. A news aggregator will help you follow all the online news sources, blogs, and business magazines you track to stay on top of trends in various categories.

A good SEO tool will help you stay on top of the common terms people are searching for (and who wins for them now), so you know what people in your audience care about. And a comprehensive competitive intelligence product will make it easy to track your competitors across their website, social feeds, and online ads, so you can catch it in real time if they release a new product or change their marketing approach.

Software can now automate much of the process of tracking this kind of information, and make it easier for you to spot the stories that require further investigation. For whoever’s put in charge of monitoring your various threat categories, access to the right products will be a huge timesaver and help them do a better job of it at the same time.

 

Phase 3: Discuss and react

You have to have the information before you can do anything with it. But for the threat identification process to benefit your business, you have to make a point of putting information to use once you have it.

Set up regular meetings to go over what you’ve learned. Work with your team to determine which threats are serious enough to require a response, and how urgent it is. Sometimes the response may be something relatively simple like a shift in your marketing direction or considering a new pricing structure. Other times it will be something big, like updating your product or branching into new product territories.
 

Learn and Evolve

For all your work proactively tracking threats to pay off and help you stay at the top of your industry, your business needs to be willing to adapt—sometimes fast. But if you commit to doing the work both to identify threats and respond as needed, your business will go further for longer, no matter what changes get thrown at you.

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