Competitive Analysis

A competitive analysis identifies your competitors and evaluates their strategies to determine strengths and weaknesses relative to your brand. A competitive analysis often includes a SWOT analysis that helps the marketer define a competitive marketing plan.

A competitive analysis is a critical part of your company marketing plan. With this evaluation, you can establish what makes your product or service unique–and therefore what attributes you play up in order to attract your target market.

Evaluate your competitors by placing them in strategic groups according to how directly they compete for a share of the customer’s dollar. For each competitor or strategic group, list their product or service, its profitability, growth pattern, marketing objectives and assumptions, current and past strategies, organizational and cost structure, strengths and weaknesses, and size (in sales) of the competitor’s business. Answer questions such as:

• Who are your competitors?
• What products or services do they sell?
• What is each competitor’s market share?
• What are their past strategies?
• What are their current strategies?
• What type of media are used to market their products or services?
• How many hours per week do they purchase to advertise through the media used in this market?
• What are each competitor’s strengths and weaknesses?
• What potential threats do your competitors pose?
• What potential opportunities do they make available for you?

A quick and easy way to compare your product or service with similar ones on the market is to make a competition grid. Down the left side of a piece of paper, write the names of four or five products or services that compete with yours. To help you generate this list, think of what your customers would buy if they didn’t buy your product or service.

Need of Competitive Analysis

Knowing how your competition acts and thinks can have a major impact on your own business. If you’re competing for the same market share, you need to know how they’re acquiring business and what you might be able to do to win some of your own.

When conducted the right way, your analysis can help you find potential gaps in the market and create new products or services to fill them. In doing so, you can make your marketing more effective and potentially stay ahead of your competitors (or at the very least, have a greater ability to shift faster when they change up their strategy).

Entrepreneurs agonize over how they can differentiate their service or product offering, and a competitive analysis is arguably your best opportunity. By identifying holes or weaknesses in your competitors’ strategies, you can better tailor your own strategy to pick up where they leave off.

Today’s technology has made it easier than ever to do intelligent recon on the competition and collect trustworthy data. Let’s look at what’s involved in the process and how you can conduct your own competitor’s analysis like a pro.

Benefits of competitive analysis

Competitive analysis should be viewed as an ongoing process whereby your company continues to understand the strengths, weaknesses, opportunities and threats in relation to your competition. Most businesses already gather information about their competition, but many small business owners don’t recognise it as competitive analysis. The difference is the quality of information that is gained or lost by hiring an outside source. In our mind, the most important thing to take away is to recognise that any information about your competition is considered competitive analysis and to think about it in those terms.

There are a series of business benefits you can gain by having insight into the competitive landscape, particularly if you track products, prices, staffing, research and development, and other aspects of the competition on an ongoing basis. “This is so a business can understand the external and internal environments they’re operating in,” says Ken Garrison, chief executive officer of the Society of Competitive Intelligence Professionals (SCIP).

There are quite a few benefits to be gained by having specific insight into the landscape of your niche market, especially if information is itemised. For example, if your company sells computer monitors, tracking your competitions products offered, price points, staff levels, social media traffic and promotion scheduling might offer significant insight into their company over a year and even more insight over a five year period.

The following are benefits that can be gleaned from conducting competitive analysis:

• Understanding the market
• Better targeting customers
• Market potential forecasting
• Economic climate tracking
• Competitor product tracking
• Competitor pricing
• Tertiary market possibilities
• Customer acquisition