The UAE is fast becoming a hub for business and innovation growth. Its world-class infrastructure and strategic location contribute to its favorable business environment. The country offers a lot of opportunities to new business owners as well as existing entrepreneurs making it one of the most competitive marketplaces in the world.

However, this article explores how you can milk the numerous opportunities available to business owners without having to worry about the fierce competition.

What is Competitive Analysis?

Competitive analysis deals with evaluating the strengths, weaknesses, strategies, and overall market positioning of your competitor in the global market. Conducting a comprehensive competitive business analysis will provide companies with insights that drive growth and encourage expansion.   

How competitive market analysis impacts decision-making

Let me explain this using an analogy. Imagine the market share of a competitor in the UAE increasing rapidly due to aggressive pricing, another business can counter this by introducing new features to their product or offering a better value.

That is how competitive market analysis works.

It pushes companies to go band for band, quality for quality, and feature for feature until saturation is achieved.

A comprehensive competitive market analysis serves as the bedrock for making informed strategic decisions. It is useful when entering a new market, adjusting pricing strategies, launching a new product, or trying to stay on top of the game. The insights gained from a competitive analysis guide companies to make choices that make a market achieve its objectives.

Image 1: The image above shows how different competitors are positioned in the market. The competitor positioning map further shows each competitor’s standing based on price and quality.

Components of a Competitive Business Analysis

These are the steps involved in setting up a competitive business analysis.

Identifying your competitors

 This is the first step in conducting a competitive business analysis. You need to know who your competitors are. As UAE is a global market, the range of competitors is wide. Your competitors may be local businesses as well as international businesses offering the same service. Identifying your competitors ensures not all potential threats are rounded and observed.

Evaluating your Competitors’ Strengths and Weaknesses

There is no need to put businesses you have nothing in common with under your radar. Hence, why you need to evaluate your potential competitor’s strengths and weaknesses. Doing this deals with looking at all their four Ps of marketing; their pricing strategies – do they charge higher or less than you do? the products and services they offer, are they strategically located, their mode of customer service, and so on.

To maximize this step, you identify the weakness of your competitor, capitalize on it, make sure not to slack on their strength, and then tweak all these to stay competitive.

Evaluating their Market Positioning

This deals with assessing how competitors position themselves and how they are perceived by the audience. Are they perceived as premium brands? Do they offer cost-effective solutions? Etc. This assessment can also help businesses position themselves strategically and stand out in the market.

Observing Your Competitors’ Marketing Strategies

Digital marketing has revolutionized the way companies project their businesses not only in the UAE but across the globe. Carrying out an analysis of your competitor’s marketing strategies will provide you with beneficial insights to scale up. This includes surveying their online presence, marketing content, social media activities, and so on.

Observing your competitor’s marketing strategies also ensures putting your money where your mouth is. Companies are spending big on ads these days and you shouldn’t be left out. According to Statista, money spent on ads in the digital advertising market is projected to cross One million US dollars this year.

Understanding these digital strategies sets you on a pedestal to optimize your marketing plans.

Assessing Competitors’ Financial Performance

How strong or weak a company is can be determined by their financial performance. It is a pointer to a competitor’s success. Through analyzing metrics like revenue, market share, profit margins, and so on businesses can determine the financial strength of their competitors.

Effective Competitor Analysis Strategies

Below are some proven strategies to conduct an effective competitive business analysis.

SWOT Analysis

SWOT simply stands for Strengths, Weaknesses, Opportunities, and Threats. It is a time-tested analysis method used to assess competitors. By measuring a company’s strengths, weaknesses, opportunities, and threats, you can develop strategies to leverage their strengths, prey on their weaknesses, seize opportunities, and defend or mitigate threats.

Benchmarking

This involves weighing your business process and mode of operation against some of your top competitors. This comparison helps to identify key areas of focus.

Trend Analysis

Trend analysis can help businesses track operational changes in the market. Some of the changes could be technological advancement, regulatory shifts, new policies, etc. It also helps to predict changes in consumer behaviour helping businesses make informed decisions to save their brand. 

Image 2: The graph above illustrates a market trend analysis for the UAE market between 2018 – 2023 using some randomly generated data on market share over time.

Market Segmentation Analysis

In a market as wide and diverse as that of the UAE’s, understanding different market segments is important. The segmentation can be based on demographics, consumer behaviour, and other needs. This helps businesses to streamline their services to a specific audience and have an edge over competitors.

Continuous Monitoring

Conducting a competitive analysis is not a one-time task. It needs to be constantly monitored as changes happen daily, every second. Regularly monitoring these changes will help businesses adapt quickly to changes and maintain a competitive edge.

Customer Feedback

Collecting feedback from customers can help you view the dynamics of your business in a new light. Reviews, surveys, social media interactions, and interviews can be used to understand customer preferences and improve.

Frequently Asked Questions

Can small businesses benefit from competitive analysis?

Conducting a competitive market analysis does not only favour big brands and businesses. It is also valuable for small businesses to identify opportunities and identify threats at the early stage of their business.

What is the main purpose of competitive analysis?

The main purpose of a competitive analysis is to know how positioned a business is against its competitors to draw insights and improve your business model.

How often should it be conducted?

While there may not be specific timelines, it is recommended that companies conduct a competitive market analysis regularly. It could be quarterly, annually, or even bi-annually. It should be done to stay updated on market trends and also track competitor activities.

Conclusion

Having a full grasp of Competitive Analysis is important for any business to stay afloat in the competitive market. By adopting the strategies highlighted in this article, your business is sure to stand the test of time. At Researchers, we are committed to helping businesses find their way around the complexities of the UAE market without compromising on their values.

Competition is on the high and lots of businesses that do the same thing as you do spring up daily. Hence, to remain in the game, at the top level of the game, you need to be updated with the latest trends in marketing insights, business analysis, and competitor analysis.

Read this article to discover how effective competitive analysis will help your business thrive in the UAE market and other markets in all parts of the world.