Keeping an eye on your competitors helps you anticipate shifts in the market, spot new trends and successful tactics, and stay on the cutting edge of what’s working within your niche.
A competitive analysis is a comparison of competitors’ strategies used to evaluate the strengths and weaknesses of different marketing approaches within an industry. It helps a business determine potential advantages and barriers within a market around a product or service and generally helps brands monitor how direct and indirect competitors are executing tactics like marketing, pricing, and distribution.
The competitive analysis can vary widely depending on what it is you’re trying to learn about your competitors. You might do a competitive analysis around a specific aspect—like a competitor’s website approach, for example—or you might do a high-level look at their marketing approach as a whole.
There are a lot of different ways you can structure a competitive analysis, so let’s look at the different types of information that are frequently seen within this type of research.
If you’re doing a high-level competitive analysis, there are a few major elements you’ll want to be sure to include around around competitors’ market positioning, such as:
These sections will help you get a zoomed out look at what separates your competitors from each other and how they’re working to differentiate themselves from competition within your niche.
If you’re wanting to look at more specific elements of your competitors’ approaches, you might consider adding sections like these to your competitive analysis:
Generally, competitive analysis can take on many shapes and forms depending on what a company wants to evaluate about its competitors—but this gives you a rough idea of what could be included within the different sections.
Once you’re ready to dive into a competitive analysis of your own, follow the steps outlined here to keep your research structured and organised appropriately.
To identify relevant competitors to include in your analysis, start with searches on Google, Amazon, and Alexa around your product and business idea. You want a mix of competitors that:
To put together a list of diverse competitors that will give you a good look at the competitive landscape that’s not too small and not too large, it’s a good idea to stick with a group of seven to 10 relevant competitors.
As you collect data on this group of competitors, keep it organised within a table or spreadsheet that can easily be shared and updated over time. Within this document, you’ll compare and contrast competitors based on different criteria such as:
Starting with your list of competitors, begin your spreadsheet by categorizing each one as a primary or secondary competitor. This will help you better determine how they’ll relate to your business.
Direct competitors, or primary competitors, to your business that sell a similar product to a similar audience. Example: Nike and Adidas are primary competitors.
Indirect competitors are secondary competitions that offer a high-end or low-end version of your product to a different audience. Example: Victoria’s Secret and Walmart are secondary competitors.
Tertiary competitors are related brands that may market to the same audience but don’t sell the same products as you or directly compete with you in any way. They may be potential partners or future competitors if they choose to expand their business. Example: Gatorade and Under Armour.
Positioning is the most persuasive marketing tool for a business. Good positioning helps you connect with a target audience and keeps them around longer. It also determines your messaging, values, and overall business strategy.
Analyse these key channels to determine positioning and messaging:
When identifying your competitors’ positioning, ask yourself the following questions:
Understand how competitors interact with their followers, customers, employees, partners, and shareholders. If you can pinpoint their communication framework, you’ll be able to position yourself differently and set yourself apart from competitors.
Once you understand your competitors’ messaging, take a look at their competitive advantage and offering. Most companies are founded on a competitive advantage or some criteria toward developing their competitive advantage.
Take time to look at your competitors’ goods and services and compare them to your own. Read online reviews to see why customers choose their company. It could be that they offer similar products at a lower price or have a focus on sustainability. Either way, you’ll want to learn their competitive advantage and figure out how you can offer something better.
Marketing is the secret to the most successful ecommerce stores. A good offering is the cost of entry, but marketing takes you to the top. Unfortunately, most businesses fail to undertake a review of their competitors’ marketing. They assume that everyone is on Instagram, running Facebook ads, and optimizing their site for search.
And a lot of them are. But understanding how your competitors market their products takes a different perspective. You want to find out what offers they are promoting, how they are building and managing their contact lists, and how they are distributing content online.
Along with the research you’re doing through software and tools, it’s a good idea to get hands-on with your competitive research, too. Assume the role of a potential customer and check out what your competitors are doing in the marketing department.
Consider conducting a SWOT analysis to accompany the data you collect. It’s a competitive analysis framework that lists your company’s strengths, weaknesses, opportunities, and threats. It leans into your competitors’ strengths and compares them to your business to define areas of improvement.
Strengths and weaknesses focus on the present. They are elements you control and can change over time, including:
Aim to run a SWOT analysis annually. It helps inform your break-even analysis and keeps tabs on the competitive landscape. You can anticipate problems and make continuous improvements to your business. Should you seek funding, you’ll want to include an updated SWOT analysis in your proposed business plan.
Competitive intelligence is key to starting a business. By doing market competition analysis on an ongoing basis, you can always be on top of your competition. You’ll be able to break into new markets, launch new products, and keep tabs on your competitors’ customers—giving you a cutting edge approach to small business that keeps your business or startup agile.
Read the complete article here.
Share this article:
