What is a competitive analysis?
Competitive analysis is a research that specializes in the collection of information about rival companies. It aims to give you an in-depth understanding of the key players in your market. Competitive analysis generally helps brands to monitor how direct and indirect competitors run marketing, pricing, and distribution. This analysis can be a living document that's constantly evolving as your company grows and matures over time.
Why do you need a competitive analysis?
You can't effectively compete without knowing your competitors. Competitive analysis helps businesses to determine potential advantages and barriers within a target market.
With the help of competitive analysis, you can reveal the new ideas regarding your marketing strategies, identify industry trends, determine your pricing strategy, integrate new methods of communication with customers, find your main weaknesses and strengths.
Another advantage of a competitive analysis is that it may be useful when you need to determine the future direction for your business. You will identify which aspects need extra attention and where you are already ahead of the others. You can also learn some new things from your rivals, and you can fill some gaps.
What does a competitive analysis include?
The structure of your analysis depends on your initial research target. You might do a competitive analysis around a specific aspect of your competitors' businesses, or a high-level research on a specific topic, such as their general marketing approach.
If you choose to get a high-level look at your competitors, these basic elements might be included in your analysis:
The target audience;
Market share, estimated net income, liabilities;
Key features and benefits;
Competitor's products – prices, distributors, partners;
Funding or venture capital;
If you would like to be more specific and narrow down your research, consider the following points:
Competitor's website and its features (design, layout, search tools, product images);
Customer experience elements (customer support, mobile UX, etc.);
Social media activities (the number of followers, frequency of posting, content, etc.);
Marketing and sales tactics;
Email marketing approach (newsletters, promo codes, offers, discounts);
Reviews and company reputation.
In general, a competitive analysis can include anything that is essential for you at the current step of your business strategy. Considering the points above, you can easily create the structure of your personalized analysis. This structure will be a basis for your competitor research, so take your time and think of what should be included in your analysis.
How to start a competitive analysis?
Once you are ready to dive into the process of the analysis, you can follow the seven simple steps outlined below to help you with your research structure.
1. Create the list of your competitors;
2. Identify primary and secondary competitors;
3. Analyze and compare competitor profiles;
4. Collect the necessary information;
5. Do research – analyze and compare the collected information;
6. Make conclusions based on the findings;
7. Identify the areas for improvement.
Don't forget to determine the relevance of your results and the efficiency of your analysis. If there were some irrelevant points, remove them from your list. If you feel that some critical information is missing – add what is necessary. You will find these corrections useful in the future when you return to your analysis to make updates.
Things to avoid
Now when you know where to start, let's glance at some major pitfalls that you should be aware of. Try to keep them in mind when analyzing your competitors.
Keep updating the analysis data
Businesses are constantly evolving, and you have to keep an eye on your competitors to stay on track. This type of analysis has to be done and updated regularly – it's not a one-time action.
Mind your personal subjective biases
Competitive analysis cannot be useful when it is subjective. Test all of your assumptions, and let the real data to take the lead. Try to make it clear, objective, and up-to-date.
Don't forget to analyze your findings
If the collected information is not used or interpreted correctly, then it does not make any sense to start. Plan around your findings to come to relevant conclusions – it should be your primary target.
Don't create extra work
Use resources to simplify the data collection process around the competitive analysis. Don't reinvent the wheel and use the right tools to speed up the process.
Set clear objectives
There is a risk of doing a lot of useless work. To avoid this, before going deep into your research, you have to define clear and SMART goals on what should be achieved at the end of the analysis.
Consider the progress
When studying competitor information, pay attention not only to their current position in the market but to their progress as well. This information will give you extra knowledge on how your competitors evolved over time and will clarify their tactics. Sometimes it is more useful to find out what they did at the very beginning and analyze how it went from there.
Keeping an eye on your competitors is not about copying their ideas. It's rather about getting into the mind of your rivals. When you are in the same business, your customers already expect similarities in your product/service or approach. Therefore, learn from your competitors. And what is most important – learn what they are doing wrong, to avoid repeating the same mistakes.
If you want to strengthen your position in the market by looking closely at rival companies,
you might find our Competitive analysis template useful.
It helps with your competitor analysis and shows the possible structure for your research workflow. It also helps to organize research findings.
How to use this template?
Create a new project and choose the Competitive analysis template to start. All Infolio templates include some demo content. Feel free to remove it once you've got the idea.
Map out the features that are essential for your analysis. Create a task for each feature and group them by Lists, e.g., "SWOT", "General facts", "Product information", "Advertising", "Social Media", etc. Don't hesitate to remove the examples and add your lists with just a few clicks.
If you would like to keep track of the task progress, switch to the Status view and add your statuses. In this template, this is optionally.
Switch to the Table view, to add the collected information, and see it at a glance. You can prioritize the features, add due dates, assignees and fill in the table with the findings. Add custom fields if needed to further tailor the workflow to your needs.
If the responsibilities are distributed within your sales team, group the project by Assignee to see who is responsible for what. In this view, you can reassign tasks quickly by dragging and dropping them between columns.
If you need any further help or if you have suggestions about how to improve
this template, don't hesitate to let us know!