Any online business requires a powerful and effective marketing strategy. An effective marketing strategy is critical in order for your business to be successful in the long term. Additionally it is also important that you know and understand your direct as well as indirect competition. Using the internet to research your competition is a very powerful marketing strategy.
A competitive analysis can help differentiate your web site from the millions of others out there on the Internet. It can help clarify your business goals, customize your approach and hone search engine optimizations strategies that will set your site higher in online rankings.
It is also a very good idea to always check out the features of your competitor's products, the quality and price range that they offer. Being aware of the weaknesses and strength of you competition and comparing it with your own will give you the opportunity to put in place strategies that will allow you to effectively compete in your marketplace. You would want to concentrate on your good points and try to take advantage of your competitor's weak points. Remember your competition would be doing the same to you, they would try to point out your weak points to your customers to try to improve there market share.
In addition to your existing competition, you should also consider future competition because it is very possible that new competitors will try to enter your market in a couple of years. You can visit blogs, forums and chatrooms that are related to your particular market to keep up with new trends, technologies and potential threats to your business. Having a very strong strategy and a loyal customer base will enable your online home business to survive all these potential challenges.
So, how to you analyze your competition? According to the U.S. Small Business Administration (SBA), begin your analysis by finding your five closest direct competitors and indirect competitors, and determine whether their businesses are growing, steady or declining. Then, identify their strengths and weaknesses and how their products or services differ from yours. For example, if all or most of your competitors offer free shipping, can you also afford to do so? Can you overcome their weaknesses with faster shipping or more product variety?
Start by checking out 20 to 30 web sites in depth. Try putting yourself in your customers’ shoes. Some general things you should look for when researching online competitors’ web sites include:
 Overall look and feel: This includes the colors, graphics, fonts and use of space. Is it professional? Do the colors work? Is it too busy? Is it easy to read?
Downloading time: Is the site too slow?
Advertisements: Are you bombarded with pop-ups and banner ads? Do they have free link exchange, free classifieds or paid advertising opportunities?
Navigation: Is it easy to move around the site and easy to find information?
Multimedia: Do they have audio or video clips? How does rich media affect the overall performance and presentation of the site?
Customer interaction: Do they have forums, e-newsletters or blogs? Can you find contact information for a real physical location (address, phone)? Do they have maps or driving directions?
Industry knowledge: Do they provide tips, instructions, or industry resources?
Products and pricing: How is their pricing in comparison to yours? Lower? Much higher? About the same? How much products do they offer? Do they have online coupons or specials? What specific brands are other sites selling?
Merchant services: Can you order easily online? How is shipping (quick, expensive, free with purchase)? What payment methods are available?
Search engine optimization: Where are they ranked on search engines? Which keywords do they use to optimize their site?
This research should give you an overall feel for your competitors so that you can create a more unique, branded web site. Identify the competitive strengths of each company in the analysis, including your own. What makes each company unique? Do they own patents or copyrights that give them a competitive edge? Monitor your competitors over time. Sign up for their email lists and analyze their marketing messages and strategy.
When you create your marketing plan or calendar, you will refer back to your competitive analysis for ideas and strategies to help you grow your business. It's a good idea to review pricing and products monthly or quarterly. The key to winning market share is to differentiate your company by providing products, services or solutions that your best prospects will find more desirable than what's offered by your closest competitors.
No business exists in a vacuum online. If you ignore your competition, you will lose the opportunity to discover your own strengths and weaknesses. Effective competitive analysis gives you the information you need to see your company as your customers and investors do, and to tune your marketing and business strategies for success.
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