When it comes to business, it is almost impossible to avoid mentioning competitors’ names. As a result, one of the most crucial tasks is to do a competitive analysis.
How far have you gone with these activities thus far? Is it just looking at competitor’s websites and social media? This is a critical question to comprehend because you must thoroughly study your competitors to grow your product brand.
A competitive analysis is a process of discovering and assessing your competitors’ strategies to determine their strengths and shortcomings compared to your company, product, and service. The purpose of a competitive analysis is to acquire the information needed to design a line of attack and a go-to-market plan.
How to Do a Competitive Analysis
Find all the features that each direct competitor’s product or service possesses in a feature matrix. Keep this information in a competitive insight spreadsheet to see how companies compare to one another.
Market share percentage
This can help you figure out who your key market competitors are. Don’t fully dismiss larger competitors, as they might teach you a lot about how to flourish in your field. Instead, use the 80/20 rule: target 80 per cent of direct competitors (businesses with similar market shares) and 20% top competitors.
Calculate how much your competitors are charging and where they lie on the quantity vs quality scale.
What kind of marketing approach is used by each of your competitors? Examine your competitors’ websites, social media presence, event sponsorships, SEO techniques, taglines, and current marketing initiatives.
What sets you apart from your competitors, and what do they tout as their greatest qualities?
Figure out what your competitors do well and what works for them. Do the reviews suggest they have a better product? Do they have a lot of people aware of their brand?
Determine what each rival could improve on. Do they have a social media plan that isn’t working? Is it true that they don’t have an online store? Is their site up to date? This knowledge can help you get a competitive advantage.
Examine your competitors’ geographic locations as well as the territories they serve. Is this a brick-and-mortar company, or does the majority of their business take place online?
Examine the objectives, employee happiness, and corporate culture of your competition. Are they the type of company that proclaims its founding year, or are they modern start-ups? Read employee reviews to learn more about the company’s culture.
Examine the customer reviews of your competition, noting both the positive and negative aspects. Look for 5-star, 3-star, and 1-star reviews in a 5-star system. Three-star evaluations are frequently the most truthful.
Step to Writing Competitive Analysis
It’s critical to be as objective and honest as possible while creating a competitor analysis. A competition analysis is a vital tool for improving your business and better serving your audience. Thus purposely understating the power or success of your competitors will only serve to deceive you and produce false results.
- Identify the products or services you want to evaluate.
- Identify every direct and indirect competitor for those products or services.
- Research all competitors in person (if applicable) and online (to get a sense of their online presence – or as the sole research method if the product or service is only sold online). Use a group, if possible, to get a variety of opinions on competitor products or services.
- Document your research in a written analysis. This can vary depending on the product or service but often includes comparison charts, graphs and written text. Make sure your document is substantive and actionable, but not so long that no one will read it.
- Identify areas to improve your own competitiveness. For example, could you improve the quality of your products or services by changing a feature, lower the price of your products or services to be more competitive, or develop a new product or service that addresses the area for improvement?
- Make the improvements you deemed appropriate or necessary.
- Measure your sales and profit based on the changes you made to determine whether they were successful.