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Doing a Competitive Analysis

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Finding Your Place Amongst the Competition with a Competitive Analysis

You’ll always have competition. Competition is good as it forces us to find ways to differentiate ourselves and be our very best. Finding your place in the market starts with analyzing what your competition is doing to become successful. When you do, you’ll be able to create tactics that will help you grab the attention of your target customers and hence, make a positive impact on your market share. These tactics will be in one of the four areas for gaining a competitive advantage.

The Four Areas for Gaining Competitive Advantage

  1. Identify gaps in the market
  2. Develop new products and services
  3. Uncover market trends
  4. Market and sell more effectively

These four areas are how you find your competitive advantage in the market, and they will lead your brand down the path of achievement. The key to identifying these areas lies in doing a competitive analysis. 

The competitive analysis involves identifying your direct and indirect competitors using research to reveal their strengths and weaknesses compared to your own. It needs to go deeper than simply looking at your competitors’ social media or advertising efforts for comparison. Take a look into their history, which company they consider their closest competitor and where they’re succeeding and falling short in selling their products.

The strategic advantage of doing a competitive analysis is that it enables you to get a well-round picture of your competition so you can emulate their success, recognize points of failure, and avoid repeating these failures yourself.

How to Get Started with a Competitive Analysis

Follow these four steps to do your competitive analysis to get a good view of where your company and its products and service fit in the market. This process can help you analyze several competitors at one time and develop a better approach for your target customers. Your goal is to identify five to 10 direct and indirect competitors to compare against your company. 

Step 1: Be a detective.

Doing a competitive analysis is all about gathering information about the tools and materials your competitors are using to market their products and services. Examine the features, design, and even the commercial color printing method used in their most effective marketing campaigns. If their product or service is available at a reasonable price point, you might even want to experience their marketing from start to finish from the view of a customer. You can sign up for their promotions, browse the site, abandon a shopping cart, complete a purchase, check out follow-up messaging, and even explore the return process. 

Step 2: Identify and analyze even those you feel are alternative competitors.

Learning about your indirect or alternative competitors can give you even more insights. You can find great inspiration in some of the most unlikely places. For example, a resort might learn a great deal by looking at the marketing of a pool installation company. While not they might not be apparent competitors at first glance, they are targeting the same market, problem, and purchasing power. So be on the lookout for marketing tools and materials of any businesses that you perceive to be targeting the same market as you do.

  • Direct Competitors – the same market with comparable products or services
  • Indirect Competitors – same market but with different products or services
  • Replacement Competitors – same problem/need but with different products or services

Step 3: Analyze the message.

Gather your data by focusing on each competitor’s product, price, promotion, and place. These factors cover the must-have elements when bringing a product to market. After you’ve collected the materials, focus on your competitors’ message. What are their promises? Do they have anything different to offer? Do we have anything in common? What formats did they use? Is the design effective? What seems to be the best marketing tool in all that you’ve collected? Using the information that you collected, consider the strengths and weaknesses of each of your selected competitors. Last, evaluate your own company’s strengths and weaknesses. Chart your strengths and weaknesses against those of your competitors to see how your business compares to the competitors you’ve researched.

Step 4: How can you be unique?

Once you’ve gathered all the information from your competitors, including their marketing materials and tools, it’s time for you to create your own marketing campaign. You should now have identified a message that would reflect something unique and compelling in your offer. This message should include your key differentiator(s), such as product and service features, operating method, unique company qualities, customer service attitude, values, etc. Highlight whatever you learned from your competitive analysis that will most likely resonate with your target market.

Tools for Doing a Competitive Analysis

To be competitive and even rise above the pack, you need to know your competition and what they’re doing to be different. Taking the time to do a competitive analysis using these steps and tools will enable you to find your place in the market and clearly identify your competitive advantage. You should do a competitive analysis regularly to reveal new opportunities to improve your products, better serve your target customers, and increase your levels of profitability.

Categories:Marketing, Startups

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