Assessing your competitors serves four useful purposes:

1. It requires you to assess your existing market share and current business methods. We all operate in a competitive environment, and it’s most likely that your competitors are planning to take customers and market share away from you.  How will they do it?  What strategies will they adopt?  Who will they target?  All these questions will be considered when you begin a serious competitor analysis review.  Your prime objective is, of course, to secure “home base” before you seek new markets.
2. It can identify new market opportunities. Most mature markets tend to be static in size and opportunity.  Market share can only be won by attracting customers away from your competitors.  How can you do it?  Where are your competitors vulnerable?  Do you have a competitive advantage you are not exploiting?
3. You can learn from the strengths and weaknesses of your competitors. “Respect your competitor’s strengths and capitalise on their frailties” was an adage used in the Middle Ages, and it still makes good sense today.  By studying your competitor you can avoid potential pitfalls and save valuable time by not having to re-invent the wheel.
4. It allows for an early review of potential changes in the market place. Through competitive analysis, nasty surprises can be avoided or at least, minimised.  Changes can come from many directions, new technology, personnel changes, production processes, etc.

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