Why should companies invest time in researching and analyzin

Why should companies invest time in researching and analyzing their competitors?

What are the pros and cons of competitive analysis?

Solution

Answer:

Importance of companies to invest time in researching and analysing their competitors:

-The companies should spend more time in researching about their competitors as it helps to analyse and know the strengths and weakness of the competitors within your market

-It helps to identify the current and potential competition by which you can comeup with a new strategy to attract the customers and gain the market share

-It helps to know about the distinctive advantage and the strategies followed by the competitors to overcome them and sustain in the market

-Companies should invest time in researching and analyzzing inorder to know the increasing market participation,cost management benefits,advancements in marketing technologies and trends in the market

-Investing time in researching helps to gain knowledge to develop,design and enhance the company\'s products,services ,technologies or processes and differentiating it from other competitors

-Analysing about the competitors can lead to creative thoughts and launch innovative products in the market and be unique from competitors

Pros and cons of competitive analysis:

Pros:

-Helps to identify gaps in the market for products,services etc

-Assists to price goods and services both competitively and strategically

-New innovative and creative ideas for technology and methodology could be created and implemented within organization

Cons:

-Wrong analysis about the competitors may result in making poor decisons inorder to compete

-Too much focus on the competitors may lead to loss of concentration on own business and may lead to lack of innovation and lack of unique identity in the market

-Competitive analysis may cost high to analyse about the competitors and it will consume more time for research

-The analysis may lead to a false sense of security and may create a fear about sustaining in the market with heavy competition