{"id":562,"date":"2022-02-15T15:39:00","date_gmt":"2023-10-18T15:39:01","guid":{"rendered":"https:\/\/www.salesforce.com\/?p=562"},"modified":"2023-10-18T17:35:26","modified_gmt":"2023-10-18T17:35:26","slug":"important-parts-of-a-competitive-analysis-that-startups-need-to","status":"publish","type":"post","link":"https:\/\/www.salesforce.com\/ca\/blog\/important-parts-of-a-competitive-analysis-that-startups-need-to\/","title":{"rendered":"Important Parts of a Competitive Analysis that Startups Need to Consider"},"content":{"rendered":"\n

There\u2019s a great history of entrepreneurs who identified a great business idea, quietly launched a startup to pursue it and wound up taking on the world \u2014 although it\u2019s usually a particular part of the world.<\/p>\n

It doesn\u2019t really matter whether you\u2019re developing a startup whose primary target market will be everyday consumers, or a business-to-business (B2B) audience whose buyers include marketing, HR or IT decision-makers. Chances are you\u2019re not the only one trying to woo them. <\/p>\n

Competition can come from anywhere. In broad product categories such as retail in the business-to-consumer (B2C) space, for instance, there might already be other startups who were able to launch earlier, even if their products and services don\u2019t offer the same value as yours. <\/p>\n

Startups aren\u2019t the only potential competitors, either. Large incumbents in spaces like retail are increasingly developing their own innovation teams who are coming up with ideas to deepen customer relationships. The same is true in markets such as financial services, where a fintech startup is as likely to be facing off against a big bank as their fellow emerging firms. <\/p>\n

All this makes doing a competitive analysis<\/a> one of the most vital parts of any business plan<\/a>, especially for startups seeking outside investment to get off the ground. <\/p>\n

You may be able to talk at length about your projected revenues in the first year, how you\u2019ll try to build up a brand reputation and the kinds of resources you\u2019ll require. One of the first questions any venture capitalist will ask, however, is \u201cWho else is working in this area?\u201d <\/p>\n

The answer you provide should demonstrate a comprehensive look at the competition today, as well as rivals who might pop up unexpectedly tomorrow. Naturally, you also need to be able to articulate how you\u2019ll win out against any similar startups. <\/p>\n

If you\u2019re not already aware of your competitors, you can probably find them quickly by entering keywords related to your own product and service categories in platforms like LinkedIn, or by interviewing people who fit your ideal customer profile. <\/p>\n

Once you have your list compiled, here\u2019s what your competitive analysis should include: <\/p>\n

Stage One: The High-Level SWOT<\/b><\/h2>\n

Companies often conduct a strengths, weaknesses, opportunities and threats (SWOT) analysis on themselves, but it works well with competitors too. <\/p>\n

Look at every other startup or incumbent in your space, for instance, and see what your research turns up in terms of their growth to date. This could include any sales or customer numbers they include as part of their marketing materials, as well as rankings from market research firms. These should all paint a picture of their strengths.<\/p>\n

For weaknesses, pair their product and feature set against yours, including what you might have planned later on in your product roadmap. Where are the areas where you might be able to show differentiation or undercut them from a feature or price perspective? <\/p>\n

Next, assess the overall market and any opportunities your competitors might have to build upon their progress. Can they enter a new market before you, or add to their product portfolio? Determine how you\u2019ll counter-attack to these sorts of moves.<\/p>\n

Finally, look ahead to when you\u2019ll be active in the market and how they might threaten your attempts to gain traction. A competitor might sponsor a major industry event to raise their profile, for instance, or simply become more aggressive in prospecting new customers. Again, this research should always include what you\u2019ll do to mitigate these threats. <\/p>\n

Stage Two: The Customer Journey Map<\/b><\/h2>\n

You may develop best-in-class products and services as a startup, but ultimately you\u2019ll be competing on the quality of the customer experience you deliver. So will your competitors. <\/p>\n

Instead of simply focusing on factors like pricing and features, try to map out what your customers will see, think and feel as they take the entire journey with other firms. This includes how the relationship might begin through marketing, for instance, followed by the way your competitors have set up their web site to make finding products easy. <\/p>\n

Next, look at what\u2019s involved in terms of actually making a purchase \u2014 is there friction of any kind, or is buying from them easier than it will be to buy from you? <\/p>\n

Now imagine you need to follow up with the company for some kind of service issue. What range of digital channels are provided besides making a phone call? Part of your competitive strategy could be to offer additional channels such as social media<\/a> and SMS, for example. <\/p>\n

Your customer experience should not only be seamless but offer ways to personalize as many interactions as possible. The idea is to create experiences that are memorable \u2014 in a good way. As you analyze your competitors, pay attention to best practices you can apply as well as weak spots where you can do better. <\/p>\n

Stage Three: The Reputation Report<\/b><\/h2>\n

Finally, what do customers actually say about your competitors? This can arguably offer some of the most valuable insight you include in your analysis.<\/p>\n

If you\u2019re working in the B2C space, check for online reviews. This could include well-known sites such as Yelp in some categories. In others, you\u2019ll want to check the app stores for reviews of their digital offerings. Don\u2019t just look at how many stars they get in a rating. Read what customers say they like (or don\u2019t like) to get a more realistic picture of how tough a competitor they will be.<\/p>\n

B2B startups can do the same thing by looking at any case studies or testimonials their competitors may have produced. Of course, these assets will be positive in nature, but they could still provide insight into where your competitors excel, or point to any opportunities to forge your own path. <\/p>\n

If your competitor\u2019s case studies are largely focused on large enterprises, for instance, you might be able to gain traction more quickly by focusing on the small business segment. Or if they focus on finance and heath customers, you could pursue an underserved vertical market. <\/p>\n

The competitive analysis you do shouldn\u2019t stop once your business plan has been written, of course. Make this an ongoing exercise to give your startup the best chance to grow and thrive. <\/p>\n

<\/span> <\/p>\n","protected":false},"excerpt":{"rendered":"

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