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How to Really Conduct a Competitive Analysis

business marketing strategy Jul 08, 2020

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, because 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 throw 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.

 

The Fix: Competitive Analysis

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: 

  • Identify market gaps
  • Create new products and services
  • Discover trends in the market
  • Improve marketing and sales effectiveness 

Case Study

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:

  • Her direct competitors - another bake shop in the area, a coffee shop selling baked goods, and the bakery within the local grocery store.
  • The types of products offered, price points, and ingredients used - the coffee shop had many gluten free options, the bake shop focused on high-quality ingredients, and the grocery store retailed low-priced baked goods.
  • Sales strategies - all competitors are brick-and-mortar only.
  • Marketing strategies - the grocery bakery had none, as it depended on foot traffic from grocery shoppers. The coffee shop and bake shop had social media profiles, with the bake shop notably being active and sharing engaging and brand boosting content.

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.

How to Conduct a Competitive Analysis

Identify competitors

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:

  • Blogs, whitepapers, videos, podcasts
  • Infographics to represent information
  • FAQs and case studies
  • Press releases

Analyze their content strategy

After you’ve identified the types of content they’re producing in the step above, analyze for quality. 

  • First, take note of how often they publish - regularly or every now and then?
  • The topics used will reveal what audience segment they are aiming to appeal to.
  • Determine if the topics are introductory or in-depth.
  • Check for accuracy of information and spelling and grammar errors.
  • Establish if the content is available for everyone or if people have to opt-in with an email.

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:

  • Which topics perform the best
  • If comments are negative, positive, or both
  • Which channels are most popular

Observe their social media 

Things to notice:

  • How often and what types of content are being posted
  • What their goal is - drive people to landing pages, brand awareness, engagement, etc.
  • Whether content is original or curated from other pages
  • What interactions with followers are like

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:

  • What are they doing well?
  • What advantage do they have over you?
  • What is their weakest point?
  • What advantage do you have over them?
  • Where can they improve?
  • Have they identified new opportunities and are they moving in that direction?
  • Are there threats to them in the market?

By performing competitive analyses, you will be able to position your business smarter and more efficiently within the market.

 

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