What is a Competitive Analysis?
Competitive analysis is a business tool used to identify major competitors by researching their business model, products, cost structure, marketing strategy, and any other factor that influences customer purchase decisions. These insights are useful and incredibly important in understanding your rival's strengths, weaknesses, opportunities, and threats (SWOT). Knowing as much as you can about your competitors can help your business avoid the same mistakes made by your competitors, discover your unique competitive advantage, and assist you with creating sustainable long-term goals.
In the emmensive global and digital marketplace, businesses face multiple competitors, each with their own strengths. Organizations now face the challenge of analyzing their rivals to better understand the market, and their place within said market.
Why Do You Need a Competitive Analysis?
If you don’t pause to take stock of the other players in your industry, you’re neglecting an important opportunity for reflection and strategization. Analyzing major rivals gives you a better understanding of the competitive atmosphere, helping to maintain your competitive position if you’re leading the charge, or strategize moves to help you rally for that top-ranking position if you’ve fallen behind. A thorough competitive analysis can help with your strategic planning in the following areas.
Understand Your Target Market
By examining how other companies are interacting with the same target market, you can often gain deeper understandings about who your audience really is, and how they like to be communicated with. This provides insights into hidden characteristics of your target audience, illuminating new marketing and product development strategies that can be explored.
Identify Overlooked Gaps in the Marketplace
Like every organization, your competitors only have so many resources and so much time. By examining your rival’s operations, you may uncover ignored or missed opportunities, paving the way for growth within your own organization. These newfound opportunities could lead to an incredible competitive advantage if identified and managed correctly.
Refocus the Business in the Right Direction
A competitive analysis allows you to take a step back to evaluate your strategies compared to other competitors in your industry. Where do you sit in relation to your competitors? In what areas are you underperforming or outperforming them? This opportunity to reflect provides critical insights into the direction your business is trending, providing an opportunity to pause, realign, and steer your organization back on the right path.
Completing a Successful Competitive Analysis
Any successful business and marketing campaign uses the data collected during a thorough and analytical competitive analysis as a base for business strategies. The key to achieving a complete and holistic understanding of your competitors involves approaching your analyses like an in-depth research project, with a focus on thorough investigation. To complete a successful competitive analysis, you should include the following elements.
Each business has multiple competitors within their industry, each varying with the strength of their competitiveness. There are two main types of rivals that every business should consider, that being direct and indirect competitors.
Companies that fulfill the same customer needs as your business are direct competitors. They satisfy the same demographic, are a similar size as your organization, operate in the same geographical area, and possess similar influence over clientele. On the other hand, indirect competitors include any business that offers a similar product, but they might be grounded in your particular industry. They might be a global competitor located outside of your geographical area and they might be larger or even smaller than your organization. Indirect competitors may be harder to identify, so be sure to examine all avenues when compiling your competitor list.
Identifying competitors that are both direct and indirect helps to better study and evaluate the players in your industry. Direct and indirect competitors require differing levels of attention and strategy, so it’s beneficial to identify key competitors and where they stand in relation to your organization.
Holistic Understanding of Competitors
One of the biggest challenges businesses often face when analysing their competitors, is that they fail to consider all the factors involved. A holistic competitive analysis should include all of the following areas, at minimum: corporate structure, company culture, products, services, marketing strategy, customer service strategy, branding, and social media presence. Depending on your industry, there are other factors that will likely need to be taken into consideration such as geographical reach, company resources (both human and inanimate), level of innovation, and professional partnerships. All these factors need to be carefully analyzed and documented based on the company’s strengths, weakness, opportunities, and threats.
Once you have a comprehensive outline of all your competitors business operations, you can begin positioning them in relation to your organization. This crucial step of comparing your competitors to your organization provides insight into areas of strengths and weaknesses in relation to other players. Who offers similar services and products? Who also excels with their customer service and customer experience? Who maybe is neglecting their social presence, and is this an area you can capitalize on? Detailed graphs are extremely helpful during this stage and help paint a visual picture of where your competitors are, where you are, and where you can pivot to capture a bigger piece of the market.
It’s important to revisit this exercise time and time again, as we all know businesses can pivot their operations in the blink of an eye. This practice is crucial for staying ahead of your competitors and having your finger on the pulse of industry ebbs and flows.
Our Competitive Analysis Services
Every business, no matter the size or industry, needs a deep understanding of their competitive rivals. This understanding is crucial for maintaining market share and expanding operations to seize new opportunities.
Do you need an updated competitive analysis? Our experienced team can help by researching, analysing, and developing a comprehensive competitive analysis for your business, so you can start seizing unexplored opportunities.
Our online strategy and competitive analysis services include:
- Data & statistics from online analytical tools
- Insights about how competitors are ranking, based on their online presence
- Customized unique business strategies
- A focus on identifying new opportunities and mitigating potential risks
Connect with us to start your online strategy project today!