There's a well known quote that rings true in the business world as well as warfare.
"Keep your friends close, but your enemies closer"
By keeping a close eye on your competitors (enemies) you will get to know all their products and services, strengths and weaknesses, sales strategy and position within the market etc.
With this valuable information you can determine any weaknesses in your defence and concentrate your efforts in those areas. You'll also learn to know what prices the market will bare for your products and services and be able to offer more competitive prices to win new customers. As well as weaknesses in your own product offering you'll discover weaknesses in your competitors which you maybe able to exploit.
What is your USP?
Knowing all your competitors intimately will also help you learn what your unique selling proposition is within your market.
A (Unique Selling Proposition) USP is the thing that makes your product or service stand out from your competitors.
Knowing your competitors products and services will help you learn what's unique in your own business offering, it may even lead you to create a product or service which fills a gap in the market that no other company currently sells.
Value perceived by customers is relative to rivals offerings, so making competitor knowledge an important part of your corporate strategy.
Analysing other company's websites, literature, blogs, advertisements and newsletters will allow you to build up a good profile of what types of customers they are trying to attract, who their clients are and what marketing techniques they are using to attract new business. This is all valuable information that you can put to good use with your own business.
You will discover some competitors are an aspiration of where you want your business to be, some others will be of a similar size and more comparable to your own. So use this exercise to create well defined action points to grow and position your business to where you want it to be.
Go ahead and do some competitor profiling!
Photo used under Creative Commons from petercastleton