Comparing your business, its products and services, to similar products or services sold by other companies in your market, is referred to as a competitive analysis or competitor analysis.
Competitive analysis highlights industry players who are poised to take advantage of your opportunity and key strengths.
Additionally, it reveals major weaknesses, product offerings, and uncovered opportunities for market dominance.
Competitive analysis is a process of analysing your business’ position in the market compared to your competition.
It involves gathering information about competitors and putting it to use effectively.
Your initial business plan will be able to outshine your competitors and win loyal customers by including a thorough competitive analysis.
This blog covers:
- Competitive Analysis: 6 Step-By-Step Process
- Advantages of Competitor Analysis
- How Often Should You Analyse Your Competition?
- Competitive Analysis Pitfalls: Two Common Errors
- In A Nutshell
Now that we know what competitor analysis is, let us understand the process.
#1. Competitive Analysis: 6 Step-By-Step Process
Here are 6-steps that will help you perform a thorough competitive analysis.
Choose The Products Or Services That You Want To Review
According to most analyses, these are the products or services that generate the highest revenue or have the greatest growth potential.
Identify Direct And Indirect Competitors
Direct: Comparable products or services are offered by these companies in roughly the same market.
An accountant competes with another accountant. An ABM Specialist competes with another ABM expert.
Indirect: Despite targeting the same market, these companies offer different products or services.
A bookkeeper competes with an accountant. A lead generation expert competes with an ABM specialist.
Analyse The Areas Of Your Competitors’ Businesses Worth Reviewing
Price, distribution, and delivery tactics, market share, new products and services, the quality of after-sales service, and sales channels, website content, sales funnels could all be considered.
Write A Written Analysis Of Your Research
If you want your document to be read, make sure it is informative and useful without being too long.
You can use charts and graphs to assess your market position against the competition.
Assess Areas For Improvement And Implement The Changes
Would you add a feature, lower the price, or enhance after-sales service to boost product quality? Increase your ROI?
Monitor Your Progress
You can determine if the changes were successful by looking at the profit and loss statement.
Study 10-12 competitors, say the experts. Focus on competitors with similar market shares.
#2. Advantages of Competitor Analysis
Here are 5 advantages of doing a competitor analysis for your brand.
Analysis Of Your Capabilities And Limitations
Your marketing message can be focused on your competitive advantage when you know where you stand vis a vis the others.
It’s easier to improve your products, services, and after-sales if you know where you’re lacking or where you score better.
Knowledge Of Your Market
Even if you are aware of many of your competitors, you may not be aware of all of the entrants to the market, or substitute products.
To beat your competitors, you must identify your primary competitors and any potential rivals.
A Study Of Market Trends
Can the competitors gain an edge by offering a new or improved service, product, or feature?
Have they noticed trends you didn’t?
You can evaluate your competitor’s actions by looking at their behaviour, and decide whether you need to compete with them.
Create a Plan for Sustainable Growth
Are you aiming to become the third biggest company in your industry?
Using a competitive analysis, you’ll learn how much you need to sell as well as the demographics and skill gaps your company may have.
It also involves analysing those who have entered the market, however were unsuccessful.
Some mistakes (especially in business) are utterly devastating.
You can avoid the mistakes your competitors made by studying them instead of experiencing the same failures.
By studying competitors, you can predict problems and take preventative measures. This may benefit you.
Perform a thorough competitor analysis to gain these top benefits.
If you carefully examine and analyse those businesses with which you compete, you will discover numerous other benefits and opportunities.
#3. How Often Should You Analyse Your Competition?
Competitive analysis should be conducted regularly.
On a large scale, the analysis may be done annually, however on a smaller scale, it may be done quarterly.
Important Points To Remember:
- Too many brands do competitive analyses early on and neglect them after that
- Always make sure you do a competitor analysis when a new company enters your space.
- Evaluate competitors periodically
You can increase profitability by regularly analysing how your business compares to your competitors.
If you wish to analyse the competitor further, you could also use a different model such as Porter’s Five Forces.
Being aware of one’s competitors allows one to differentiate oneself from the competition and identify untapped market opportunities.
It lets you identify what services to provide, recommend improvements, and exclude bad players.
#4. Competitive Analysis Pitfalls: Two Common Errors
Comparative analysis requires time and labour. Here are some mistakes and challenges to watch out for in evaluating your competitors.
How often do marketing strategies fail to make the most of competitive analysis?
It is common for a competitive report to overlook a critical flaw: Let’s say that it t focuses on the SEO and social media tactics of your competitors. But it does not recommend what actions should be taken.
This brings us to the goals of the analysis. Are you interested in improving your product, driving sales and fostering cross-team collaboration with your competitive research?
Watch out for these mistakes. Make sure you conduct competitive analysis efficiently and effectively.
A Failure To Make Your Competitive Report Usable
While many competitive reports are detailed and in-depth, you should ensure that they do provide any recommendations for what should be done or avoided.
It is never a good idea to copy the strategies of your competitors, as you may lose your identity or even be exposed for it.
However, learning from your competitors’ successes and failures is a smart move simply because those brands have been around longer.
Always include clear action items in your competitive report, such as:
- Make a new landing page that compares our product, head to head with XY competitor and explains what makes our product unique
- Reach out to specific influencers in X niche and create a plan to win them over in Y time
- Develop our brand on Quora and recruit volunteers to raise questions and provide answers @ 20 questions and 40 answers per month
- Provide exclusive offers to our Instagram followers, on our special deals page, to generate Z leads per month
They can be large strategies that will be broken down into many steps or specific actions that are executed within minutes.
Create competitive reports that motivate action each time. It is otherwise useless.
Only Doing It Once And Spot-Checking Occasionally
There is more proof that the world changes rapidly and dramatically. On a regular basis, you should know what works and what doesn’t.
You should keep an eye on what the competition is doing frequently, despite the time commitment. It is recommended prior to all marketing campaigns, every sales campaign, and any new product launch.
If you don’t regularly monitor news or competitor websites, you’ll quickly lose track of your competitors. Know what’s going on in your industry.
Don’t miss out on new ways to reach potential customers.
#5. In A Nutshell
Competitor analysis is among the most difficult marketing activities. It demands knowledge, experience, analytical skills, and a strategic mindset.
Analysing and monitoring competition helps you uncover new strategies and avoid mistakes that other brands have made.
Making your product better, coming up with marketing strategies, and staying motivated are all benefits of competitive research.
This article can be your cheat sheet to success. Happy Marketing!
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