The Ultimate Guide to Competitive Analysis

competitive analysis

A aggressive analysis is a powerful tool for understanding how you compare to competitors and generating smart strategies to get noticed simply by consumers. Most companies are doing this on a monthly, quarterly, or annual basis.

If you feel like it’s been awhile since your company has performed a competitive evaluation, not to worry — the current technology (thanks, internet) makes it easier than ever to get started and rapidly get informed. In this article, we’re going to walk you through the basics of a competitive analysis, the benefit of doing one, and 7 steps to conducting one particular for your company.

Quick Takeaways

  • Three-quarters of businesses perform a competitive analysis annually, and a third do it each month.
  • A aggressive analysis keeps you knowledgeable about your market placement and helps you better distinguish your brand.
  • Your competitor list ought to include direct, indirect, and distant competitors.
  • Automating the data gathering process is key to making the competitive evaluation process efficient and manageable.
  • It’s crucial to report on your results in order to drive further motion steps and keep stakeholders advised.

Just what competitive analysis?

A competitive analysis will be the process of researching competitors to understand how your brand stacks up against them on the market. It is a strategy companies use to understand their market position, differentiate their brand , and improve their value proposition .

Today, it’s an even more powerful strategy than ever thanks to the ease of finding information on the internet. In fact , research demonstrates 74% of companies are conducting a competitive analysis at least one time per year (and more than a third are doing it every month).

Nearly two-thirds of companies conduct a competitive analysis once per year, and more than a third do it every month.

Image Supply: Conductor

This tells us two important things: first, your competitors are more than likely researching what you do plus tracking your performance. Second, should you be not doing the same to them, you’re probably falling behind.

A aggressive analysis is indeed a competitive imperative if you want to control your own positioning and get customers to pick you over other brand names.

Let’s have a look at some of the specific benefits to performing a regular competitive evaluation for your company.

Benefits of performing a aggressive analysis

Know your market position

A competitive evaluation will help you understand how you compare to your competitors on the market. You’ll get a grasp on our abilities and failings and those of your competitors, enabling you to create more informed methods, improve where needed, and capitalize on the areas where you are ahead of the crowd.

Monitor the competitive panorama

Your competing landscape is constantly changing. Immediate competitors may pivot their own approach, new market traders come onto the picture, consumer behavior and preferences evolve, and new technologies emerge (there are just some examples). The competitive landscape you found in an analysis performed even one year ago is likely not accurate.

When you perform regular competitive analyses, you can monitor the competitive landscape to remain informed in an ongoing method.

Track marketplace trends

Carrying out a competitive analysis provides you with a wider perspective on market tendencies and activities that impact you and your competition. When you know what’s occurring in your industry, you’re much better able to prepare for unavoidable issues, identify and pursue possibilities, and understand how external factors are affecting your (and your own competitors’) performance.

Identify new opportunities

New opportunities occur all the time for companies, but you might not know about them if you’re not doing the right research. A competitive analysis will help you spot gaps between you and your competitors — some where you are at an advantage, and others exactly where your competitors have the upper hand.

Either way, identifying these competitive gaps creates possibilities. You can either improve within areas where you need to catch up with your competitors, or double down within places where you’re ahead.

Research new competitors

Online companies and other new market entrants (like established companies growing into your market) can affect the status quo you may have been easily operating under. When you execute regular competitive analyses, you could be confident you’ll never be surprised by these brand new competitors and you can adjust your own strategy as needed instantly.

Differentiate your own brand

Last but definitely not least, executing a competitive analysis can help you optimize your differentiation strategy . You can not make your value proposition stand out from your competitors’ if you don’t know what theirs look like to begin with. Competitive research helps you create unique offerings and market them in ways that fixed them apart from your competitors in the minds of consumers.

How to Perform a Competitive Evaluation

Now that we know why a competitive analysis is so important, it’s time to walk through the best practices with regard to actually performing one. I suggest the following 7 steps:

Define your objective

Why are a person performing your competitive evaluation? What are your goals? The answer to people questions may change over time. Sure, the larger purpose will stay constant — you’re learning about your competitors and how you compare. But you might also possess specific goals that differ depending on the time of year and your current business objectives.

Some examples include:

  • Launching a new item
  • Creating a new marketing campaign
  • Expanding into a new market
  • Gaining market share over a particular competitor
  • Reaching new target audiences

Comprehending the goals behind your competing analysis will determine the particular types of data you gather and insights you go after later in the process.

Assess your own company

It’s a good idea to begin with your own company by carrying out a SWOT analysis to understand your own internal strengths and weaknesses and also external opportunities and threats.

SWOT analysis framework.

Image Resource: Wordstream

A SWOT analysis is a helpful starting point to steer the direction of your competing analysis research.

List competitors

Now it’s time to listing your competitors. But what defines a relevant competitor in this situation? There are certain brands you contend with directly that will always be top of mind, but you should also consider including other appropriate organizations like indirect competition, leaders in adjacent marketplaces, and new startups rising onto the scene.

Types of competitors to include in a competitive analysis.

Image Source: The Gerson Companies

Consumers don’t specify their decisions by evaluating direct competitors only, so neither should you. Know every single option your target client may consider to fulfill their needs, and include them within your competitor list.

Gather as much data as possible

There is a wide range of data available to you for your competitor analysis. So where do you begin to collect it? The key the following is to automate as much as you are able to to bring the data to you.

Here are some ways to get rid of much of manual work involved in gathering data:

  • Create Google alerts for important competitors plus topics
  • Register to receive newsletters and other articles from competitors
  • Make a list of important business conferences and other events
  • Block out regularly planned time to read industry news and competitor websites

When you take measures to automate your computer data gathering, you can gather this at a higher volume and have it readily available to you anytime you decide to conduct a competitive analysis.

Analyze what’s important

You won’t be able to analyze every single piece of data for every competitor analysis. Once you have done a comprehensive data collecting, go back to the goals you set at the start. Prioritize the data and information most relevant to those targets.

For example , if the goal of your competitive analysis is to successfully launch the go-to-market strategy for a new product, you want to focus on competitor offerings that compete against that will specific product (rather than comparing companies as a whole).

Report on the findings

That are the stakeholders in your competitive analysis? Your list might include employees, executive leaders, investors, board members — it depends on your company and your situation. The important thing is to place your findings into a formal presentation and present them.

You should always try this, even if no one asks for it. Here’s why:

First, it helps you organize your findings and take out the most important insights. This informs your action plan and technique going forward. Second, everyone inside your organization can benefit from understanding your competitive position. Revealing your findings gets everyone on the same page. Third, this serves as a launching point for discussion and can motivate action at every level.

Your presentation does not have to be a daunting project. Produce a well-developed slide deck that will highlights the most important information, utilizes visuals to make data points digestible, and points people toward additional resources if they want to dive deeper into the findings.

Build a long-term plan

Finally, figure out how you’ll develop the competitive analysis process into your ongoing business strategy. Remember, your competitors are already carrying it out, and you should too if you want to become equally informed.

Some simple steps to take: prioritize automated data collection, choose a regular frequency for performing competitive analyses, and set difficult deadlines for reporting results.

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