⌚ 5 min read
Competition is a good thing! If it wasn’t for competitors, companies would stagnate, innovation would not exist, and there would be no growth. There’s no reason to improve when your customers have nowhere else to go.
But that’s not the world we live in. No matter what industry you’re in, you have competitors to contend with. You should always “mind your own business” (pun intended), but you have to keep an eye on the competition too.
If your analysis of competitors thus far has consisted of casually browsing their websites and social media pages, you’re missing out on a goldmine of information.
Like we said, competition is a good thing... if you know how to use it to your advantage.
Conducting a competitive analysis means researching competitors’ products, sales, and marketing processes. With this knowledge companies can then take the required actions to improve upon competitor strategies, i.e. emulate what they’re doing right and seize on opportunities they’ve missed.
Additionally, companies can use competitive analysis to:
Michelle runs a bakery and feels like she has been too inwardly focused on her business. She has no idea what competitors are doing or what’s going on in the market. To grow her sales, she knows she needs to improve marketing and introduce new products to her assortment.
A competitive analysis is a great place for her to start. Within her analysis, Michelle determined:
Michele then created a SWOT analysis (strengths, weaknesses, opportunities, threats) for each competitor. With this complete picture, she identified what gaps exist in the market and where she could step in with new offerings.
Pinpoint both direct and indirect competitors. Direct competitors are those that offer a product or service that is a close substitute for yours. For example, Uber and Lift are direct competitors - they offer a service that is interchangeable for consumers. On the other hand, if you run a casual clothing boutique, the workout apparel store the next street over is an indirect competitor. Both are retailing women’s clothing but for different occasions. It’s important to keep an eye on indirect competitors as they can easily become direct competitors with a few strategic changes.
Determine product/service offerings
Look at the quality, pricing, and discounts of the entire product/service line. Take note of their distribution strategies online and offline. Identify how they try to differentiate themselves from their competitors (this includes you!).
Research sales strategies
A good place to start is looking at the channels they sell through. Do they have a shoppable IG page, are they selling through Amazon, do local stores carry the product, etc. Next, check out customer reviews to glean insight as to why customers may have chosen the competitor. Do they have a superior product, fast delivery, efficient service, etc.?
Identify how they market
Competitors’ websites provide the easiest access to product/service marketing efforts. You’ll want to take note of the type of content they’re publishing, including:
Analyze their content strategy
After you’ve identified the types of content they’re producing in the step above, analyze for quality.
Figure out engagement levels
Once you have a good idea of what the content strategy entails, find out if it’s actually working for them.
In addition to the number of likes, comments, and shares on posts, pay attention to:
Observe their social media
Things to notice:
Perform a SWOT analysis
Now that you have all of this knowledge on a competitor, organize it via a SWOT analysis. Check out our blog post on SWOT analysis for an in-depth explanation of the process.
When creating the SWOT for your competitor, ask the following questions:
By performing competitive analyses, you will be able to position your business smarter and more efficiently within the market.