The assessment of the weaknesses and strengths of potential and current competitors done by companies to gain a strategic insight into the mind of competitor is termed as Competitor analysis in the language of marketing. This analysis is used to identify threats and opportunities by in depth understanding of key competencies, strengths, weaknesses and unique selling proposition of the rivals in the business. Such analysis begins with competitor profiling that serves to coalesce all relevant sources of analyzing your competitor into a framework for effective and efficient strategy formulation, implementing strategies, monitoring the progress and making adjustments as needed. Competitor analysis is a strategic element and essential component of a corporate strategy.

The methodology involves many steps, which are presented as follows:

Competitor Matrix

This is the first and the most important step. If done carefully the Competitor Matrix step alone can accelerate your processes in a big way. The matrix consists of following elements:

Definition of  your industry which involves the nature and scope of the industry

Determination of other players or competitors in the area

Determination of your prospective customers are and their expectations

Determination of  the factors of success in  the industry

Approximate rating of the key success factors of all competitors

Competitor profiling

The competitor profiling is the second step and its strategic rationale cannot be ignored as superior knowledge of rivals is a legitimate source of competitive advantage. Profiling provides an objective analysis of a competitor’s projection in the market and separates strong rivals from weak ones. It is generally observed that those firms that practice systematic and advanced competitor profiling have a significant advantage and because of its success comprehensive profiling capability is rapidly becoming a core competence required for successful competition.

Media scanning

A study of competitor’s ads can reveal much more about competitors believe about marketing and his target market than any conventional quantitative or qualitative research tool. Any key change in rival’s advertisement or advertising budget should be carefully noticed as these changes very precisely reflect a change in rival’s strategy. So a tactical study of advertising strategy of rival should be done to extract as much information to gain a business advantage.

New competitors

New competitors enter into the market whenever there is unmet demand or high profits in the existing market. These new competitors should be carefully watched and monitors as they can pose a significant threat to your market segment. The product should always be kept in lines with the existing market demands and customer loyalty should be built so that customers are not weaned away from the company on arrival of new provider.

Internet marketing is a fascinating business to get into and one that can reward you handsomely for your hard work.  Anyone can become an Internet marketer without any previous experience, startup costs, or a college degree.  Now that’s exciting!  Still, not all aspiring Internet marketers make a profit and this is true for a variety of reasons.  But if you are willing to work hard and learn the business, the sky really is the limit when it comes to Internet marketing.

Be Willing to Accept Constructive Criticism

I’ve seen many posts at online marketing forums where a new Internet marketer put up his or her first website and asked members of the community to critique it.  Many of them were willing to oblige and offered their opinions of the site.  It can be invaluable to have others look at your website before you go live.  After all, by this time you probably can’t even see straight anymore and a pair of fresh eyes wouldn’t hurt.  They can view your site through the customer’s eyes and offer you their honest opinions.  Remember, if you ask others to view your websites, blogs, articles, ebooks, or whatever you create, be willing to accept constructive criticism.

Embrace Customer Complaints

Many Internet marketers cringe when they get complaints from customers but if instead of fearing them, you embrace them, you’ll reap the rewards.  When you embrace customer complaints, you reply to them right away instead of procrastinating.  You’re hungry to find out what went wrong so you can fix it right away.  You want to hear from your customers to see what they truly think of your website and your Internet marketing business.  You can then make your business bigger and stronger and you will get repeat business because the customers who complained will know they are dealing with a professional.

Keep up with Ever Changing Markets

Just about the time you think you’ve got this Internet marketing thing all figured out, change will come about.  It’s inevitable.  Savvy Internet marketers anticipate change and keep up with the changing marketplace so they can offer their customers the latest, greatest new products.  Successful Internet marketers aren’t afraid of change; they embrace it and prepare for it.

Be Flexible

You have to have a certain amount of flexibility when you own your own business and especially if you are an Internet marketer.  For example, if you offer a 30 day money back guarantee and a customer asks for a refund on the 31st day, don’t blow the chance to win that customer over for life by restating your policy and refusing the refund.  Remember, this is your business and you make the rules.  Customers have heard about policies and rules from gigantic conglomerates that left customer service in the Stone Age decades ago and they’re tired of it.  Treat your customers right and they’ll be your customers for life.