Know Your Competition
                     Know Your 
Competition
Very few businesses operate without competition. We 
may wish to see all competition disappear, but in fact 
competition forces us to improve our businesses by 
developing better productivity, better products and 
services, and lower costs. Knowing what the 
competition is up to is therefore a vital part of our 
business lives.
If you are already in business, keeping up to date with 
what your competitors are up to or are planning is an 
essential part of sharpening your competitive 
advantage and making sure that you can stay that one 
step ahead.
If you are planning a business start-up, then 
understanding what your competitors offer and what 
share of the market they hold is very important. For 
example, in the course of your research you might 
discover that the competition is stronger, more 
entrenched, or more pervasive that you had imagined. 
This ‘reality jolt’ could save you from costly financial 
commitments or mistakes, or lead you to modify your 
plans to make your concept more competitive and 
practical.
Identifying Competitors
The first task is to identify your key competitors. Most 
existing business owners can probably list immediately 
their main competitors, but such research will help 
them uncover new information and deepen their 
understanding of the market. For a new business the 
task is harder and requires more research. Here are 
some avenues to pursue:
1. Networking
Networking is an important part of keeping alert to 
market developments. Joining industry associations or 
business groups such as the local Chamber of 
Commerce is a good way of discovering more about 
competitors
2. Google
The internet offers a rich mine of information. Type in 
the search terms that you think your prospective 
customers will type to find you, and see what comes 
up. These websites are often very revealing.
3. Competitor Websites
Competitor websites are a rich source of information. 
Examine them for what they reveal about your 
competitors goals and intentions. How user-friendly are 
the websites? What could you do differently or better? 
Sign on for any free newsletters so that your 
competitors keep you up to date with what they are 
doing.
If the website offers online buying, make a purchase or 
two to see how well the system works. Did the 
shopping experience impress you, or was the process 
clunky and time consuming? What changes would you 
make to your own website to do better?
4. Industry Journals and Magazines
Industry-specific magazines and periodicals are a useful 
source of information and competitor adverts.
5. White and Yellow Pages
Although this may sound like a blast from the past, the 
White Pages and Yellow Pages directories for all 
Australian States and Territories are a great way to see 
what businesses are in your industry. You can also do 
your research online through the 
www.whitepages.com.au or www.yellowpages.com.au 
websites.
6. Statistics and Market Research
Two useful websites for more information are 
www.abs.gov.au and www.business.gov.au
Analysing Your Competitors
Once you’ve drawn up a list of your competitors, your 
next step is to deepen your knowledge of their 
operations.
1. Promotions and Adverts
Collect a file of competitor sales material and analyse 
the material for strengths and weaknesses, for 
evidence of what your competitors are doing and what 
they might be planning to do. For example, if you keep 
collecting material, you will come to recognize patterns, 
such as when competitors hold sales or launch special 
promotions.
This is valuable information for your own marketing 
tactics. You could, for instance, launch pre-emptive 
sales or promotions before your competitors launch 
theirs.
2. Catalogues and Newsletters
Let competitors tell you what they’re up to by making 
sure you (or a friend) are on their mailing list for 
catalogues and newsletters.
3. Customer Surveys
Add a question to your customer surveys asking them 
who else they buy from, and why. The information 
could surprise you and could help you to refine or 
adapt your own tactics to make your business more 
attractive. For example, other suppliers might be 
preferred because they keep more convenient shopping 
hours, offer a website with online buying, offer free 
delivery, etc. You can use this information to plan 
appropriate changes.
4. Your Accountant
Your accountant can be a useful source of information 
on your industry. For example, the accountant might 
have worked with similar businesses and be aware of 
industry benchmarks. These might include typical mark-
ups or charge-out rates for products or services in your 
industry, or other information you can use to check if 
your performance needs improving. For instance, if 
your stock turnover rate is much slower than the 
industry average, or your average debt collection time 
is out of line with the competitors, you can set new 
goals to improve your competitive efficiency.
5. Mystery Shop
A variation of this tactic is to arrange for a friend or 
colleague to visit a competitor and report on the 
experience. These visits can be a rich source of 
information on aspects such as how busy the business 
seems, the quality of the layout, décor and signage, the 
friendliness of the staff, the range of products and 
services, and so on.
You can make this exercise more professional by 
contracting a mystery shopping business to mystery 
shop a number of competitors including your own 
business and then submit a report ranking your 
business against others. This exercise can be very useful 
in revealing areas for improvement.
6. Trade Fairs
Competitors’ stalls at trade fairs and exhibitions offer a 
good source of information, since exhibitors usually 
hand out information packs or run videos and/or 
PowerPoint presentations to tell you what they are up 
to or what new products or services they are 
introducing to the market.
Competitor Checklist
Here are some of the main points to consider as you 
research the competition:
• What are the key benefits offered by each 
competitor?
• How well do they communicate their competitive 
advantage to customers?
• What other steps do they take to entice customers?
• How have they positioned their business in the 
market?
• What are their pricing and discount strategies?
• What other strengths and weaknesses does your 
research reveal?
• What can you improve on, or do better in your own 
business?
• Use a SWOT analysis to determine the Strengths, 
Weaknesses, Opportunities and Threats of each 
competitor in relation to your business.
Summary
Competitor analysis can provide you with a wealth of 
information to enable you to keep your business that 
‘one step better’. But always bear two things in mind:
1. Keep all your activities legal. It is quite acceptable to 
research your competition using publicly available 
information or the promotional material put out by the 
competitor. Your competitors will surely be doing the 
same to you (if they ignore you, be worried!). But avoid 
outright industrial or commercial spying or stealing 
secrets or headhunting a rival’s employee to gain 
technology secrets. Not only are you likely to be 
breaking the law, your risk irreparable credibility 
damage to your own business. If a competitor research 
activity seems borderline, then don’t do it (or at least 
check first with your legal advisers).
2. Don’t become too obsessed with what your 
competitors are doing or on constantly looking over 
your shoulder. It is important to keep in tune with the 
marketplace or you might miss out on some important 
trend or development. But keep your primary focus on 
steadily and confidently developing the potential of 
your own business.
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