The competitive analysis is a statement of the business strategy and how it relates to the competition. The purpose of the competitive analysis is to determine the strengths and weaknesses of the competitors within your market, strategies that will provide you with a distinct advantage, the barriers that can be developed in order to prevent competition from entering your market, and any weaknesses that can be exploited within the product development cycle.
The first step in a competitor analysis is to identify the current and potential competition. As mentioned in the "Market Strategies" chapter, there are essentially two ways you can identify competitors. The first is to look at the market from the customer's viewpoint and group all your competitors by the degree to which they contend for the buyer's dollar. The second method is to group competitors according to their various competitive strategies so you understand what motivates them.
Once you have grouped your competitors, you can start to analyze their strategies and identify the areas where they are most vulnerable. This can be done through an examination of your competitors' weaknesses and strengths. A competitor's strengths and weaknesses are usually based on the presence and absence of ke
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Understanding your customers cannot be done without considering the strengths and weaknesses of your competition and how they satisfy the needs of their customers. This process includes understanding the market niches they are pursuing and why their customers make a decision to buy product from them. In the free market, people are provided alternate choices, and the companies that evaluate the products or services without considering those differences will find themselves falling behind in the race.