A comprehensive competitive analysis: here's how to do it

Introduction

A thorough competitive analysis is an essential part of your business strategy. Want to conduct a competitor analysis, but don't know where to start? In this comprehensive blog post, we explain what a competitive analysis is, its benefits and how to conduct it.

What is a competitive analysis

A competitive analysis is a process of identifying competitors in your market segment and analyzing their strategies, strengths, weaknesses, and market position. This goes beyond just looking at their products; it includes a holistic assessment of their entire business operations. You use this analysis as a comparison for your own business against your competitors.

A competitor survey provides the following information.

• It provides insight into your market. Analysis helps you understand market dynamics and how competitors operate in them.
• Strategic positioning. What are the propositions of competing companies.
• Identify threats and weaknesses in your own and competitors' strategies.

Why is a competitive analysis Important?

The information from this analysis offers several benefits and opportunities for your business.

• You can identify market trends and capitalize on them.
• It can help improve your products and services.
• It provides information to develop more effective marketing strategies.
• You can anticipate competitive movements.
• It can be a benchmark and give you goals for business growth.

Competitive analysis model

How do you conduct a competitive analysis? A structured approach is crucial. Follow the following competitive analysis template. We explain each step in detail in the following paragraphs.

1. Identify your competitors.
2. Gather information about your competitors.
3. Establish a competitive matrix.
4. Conduct a SWOT analysis.
5. Overview of marketing channels.
6. Define your business strategy.

Identify your competitors 2.

The first step of competitor research is to research your competitors. Consider both direct and indirect competitors.

• Direct competitors. These are companies that offer similar products or services in your sales area. An example of direct competitors are Domino's Pizza and New York Pizza located in the same city.
• Indirect competitors. These are companies that sell different products or services, but address the same need. In other words, indirect competitors offer a substitute for your product or service. For example, an indirect competitor of Domino's Pizza is McDonalds. These fast food chains offer different meals, but compete against each other for people who want a quick bite.

A handy online tool for mapping your competition is the KVK Location Scan.

Gather information about your competitors 2.

Now that you have your competition mapped out, start gathering information about your competitors. Gather the following information:

• What products and services are offered.
• What are the prices of competing products and services.
• What is the quality of these products and services.
• What service is offered herewith.
• What is the proposition of other companies.
• What is the sales territory of your competitors.
• What audience do other companies target.

Create a competitive matrix 3.

A competitive matrix provides a visual comparison of your own company against competitors on key points. In this way, you can compare your own positioning with that of your competitors.

Conduct a SWOT analysis 4.

Using all the information you have gathered, conduct a SWOT analysis for your own company and competitors. SWOT is short for strengths, weaknesses, opportunities and threats.

• What are a company's strengths. What does it do very well.
• What are the weaknesses and where are opportunities being missed.
• Where are the opportunities for a company to grow.
• What are the threats to a company or the market.

Read our article on SWOT analysis for a detailed explanation and examples.

Research offline and online marketing channels 5.

Marketing is getting the right message, at the right time to the right audience. You want your potential customers to connect with your products or services at the right time. This can be done offline or online.

Offline marketing channels include fliers, magazine ads and radio spots. Online marketing channels include social media, search engines and e-mail marketing. If your potential customers search Google for a product you offer, but don't come across your website and your competitors' websites do, you're probably missing out on sales.

Therefore, map all marketing channels and analyze which ones you can use to reach your target audience. It is also advisable not to depend on one marketing channel. Suppose you get your revenue mainly from Facebook, but suddenly you are no longer allowed to advertise on Facebook, this could mean the end of your business.

Determine your business strategy 6.

Now that you have all the information from the competitive analysis mapped out, you are going to determine the strategy for your business. Exactly what products or services will you offer? What will be your proposition? What is your competitive advantage? What target groups are you going to focus on? What marketing channels will you use to reach your potential customers? The answers to these questions form the strategy you want to use to grow your business.

Did you find this an interesting blog post? Then also read the following articles.

What is positioning and a roadmap

How to define a brand strategy

How to create a business plan