What is a competitive analysis and how is it carried out?
Posted: Sat Jan 18, 2025 6:38 am
When was the last time you conducted a competitive analysis for your brand? And more importantly, do you know how to do it efficiently?
If you're not sure, or if the last "analysis" you did was a quick perusal of a competitor's website and social media presence, you're probably missing out on important information that could help your brand grow.
In this article, you'll learn how to conduct a competitive analysis that will give your company a competitive advantage in the market.
What is a competitive market analysis?
It is a strategy that aims to research major competitors to gain insight into their products, sales, and marketing tactics. Implementingbusiness strategies, protecting yourself from competition,austria phone number material and capturing market share are just some of the benefits of doing so.
This tool can help you understand how your competition is performing and identify potential opportunities to outperform them.
It also allows you to stay on top of industry trends and helps your product consistently meet and exceed industry standards.
Let's dive into some additional benefits of conducting competitive analysis:
It helps to identify your product ’s unique value proposition and what makes your product different from competitors. This empowers future marketing efforts.
It allows you to identify what your competitors are doing well. This information is essential to staying relevant and ensuring that both your product and your marketing campaigns exceed industry standards.
It tells you where your competitors are falling short, which in turn helps you identify areas of opportunity in the market and test new and unique marketing strategies that they haven't taken advantage of.
It allows you to identify, through customer reviews, what is missing in a competitor's product. In this way, it provides the possibility of understanding how to add features to your own product to meet those needs.
Provides a benchmark to measure your growth.
What is competitive market research?
Competitive market research focuses on finding and comparing key market metrics that help identify the differences between your products and services and those of your competitors.
It helps set the foundation for an effective sales and marketing strategy that helps your business stand out from the crowd.
Below, we’ll dive deeper into how you can conduct a competitive analysis for your own business.
Competitive Analysis in Marketing
Any brand can benefit from doing regular competitor analysis. By doing so, companies can:
- Identify gaps in the market
- Develop new products and services
- Discover market trends
- Market and sell more effectively
As you can see, leveraging any of these 4 factors will put your brand on the path to success.
Below, we'll delve into the steps to follow in order to conduct a complete competitive analysis.
How to do a competitive analysis
1. Determine who your competitors are
First, you need to figure out who you’re actually competing with so you can accurately compare data. What works for a business similar to yours may not work for your brand.
So how can you accomplish this goal?
I divided your “competitors” into two categories: direct and indirect.
Direct competitors are companies that offer a product or service that could pass as a similar substitute to yours and that operate in your same geographic area.
On the other hand, an indirect competitor offers products that aren’t the same but could meet the same customer need or solve the same problem.
It sounds simple enough on paper, but these two terms are often used incorrectly.
When comparing your brand, you should only focus on your direct competitors. This is something that many brands get wrong.
Let’s look at an example: Stitch Fix and Fabletics are both subscription services that sell clothing on a monthly basis and cater to a similar target audience.
But if we look deeper, we can see that the actual product (clothing in this case) isn’t the same: one brand focuses on stylish everyday outfits, while the other sells workout-focused apparel.
Yes, these brands serve the same need for women (having trendy clothes delivered to their doorstep month after month), but they do so with completely different types of clothing, making them indirect competitors.
This means that Kate Hudson’s team at Fabletics wouldn’t want to spend their time studying Stitch Fix too closely, as their audiences likely vary quite a bit. Even if it’s just a little, this small variation is enough to make a big difference.
Now, this doesn’t mean you should completely write off your indirect competitors.
Keep these brands on your radar, as they could change positions at any time and cross into the direct competition zone. Using our example, Stitch Fix could start a workout line, which would certainly change things for Fabletics.
This is also one of the reasons you'll want to routinely run a competitive analysis. The market can and will change at any time, and if you don't analyze it constantly, you won't notice until it's too late.
2. Determine what products your competitors offer
At the heart of any business is your product or service, which makes this a good place to start.
You’ll want to analyze your competitor’s full product line and the quality of the products or services they offer.
You should also take note of their pricing and any discounts they offer to customers.
Some questions to consider include:
- Are they a low-cost or high-cost supplier?
- Are they primarily working in volume sales or one-time purchases?
- What is their market share?
- What are the characteristics and needs of their ideal customers?
- Are they using different pricing strategies for online purchases versus brick-and-mortar stores?
- How does the company differentiate itself from its competitors?
- How do they distribute their products/services?
If you're not sure, or if the last "analysis" you did was a quick perusal of a competitor's website and social media presence, you're probably missing out on important information that could help your brand grow.
In this article, you'll learn how to conduct a competitive analysis that will give your company a competitive advantage in the market.
What is a competitive market analysis?
It is a strategy that aims to research major competitors to gain insight into their products, sales, and marketing tactics. Implementingbusiness strategies, protecting yourself from competition,austria phone number material and capturing market share are just some of the benefits of doing so.
This tool can help you understand how your competition is performing and identify potential opportunities to outperform them.
It also allows you to stay on top of industry trends and helps your product consistently meet and exceed industry standards.
Let's dive into some additional benefits of conducting competitive analysis:
It helps to identify your product ’s unique value proposition and what makes your product different from competitors. This empowers future marketing efforts.
It allows you to identify what your competitors are doing well. This information is essential to staying relevant and ensuring that both your product and your marketing campaigns exceed industry standards.
It tells you where your competitors are falling short, which in turn helps you identify areas of opportunity in the market and test new and unique marketing strategies that they haven't taken advantage of.
It allows you to identify, through customer reviews, what is missing in a competitor's product. In this way, it provides the possibility of understanding how to add features to your own product to meet those needs.
Provides a benchmark to measure your growth.
What is competitive market research?
Competitive market research focuses on finding and comparing key market metrics that help identify the differences between your products and services and those of your competitors.
It helps set the foundation for an effective sales and marketing strategy that helps your business stand out from the crowd.
Below, we’ll dive deeper into how you can conduct a competitive analysis for your own business.
Competitive Analysis in Marketing
Any brand can benefit from doing regular competitor analysis. By doing so, companies can:
- Identify gaps in the market
- Develop new products and services
- Discover market trends
- Market and sell more effectively
As you can see, leveraging any of these 4 factors will put your brand on the path to success.
Below, we'll delve into the steps to follow in order to conduct a complete competitive analysis.
How to do a competitive analysis
1. Determine who your competitors are
First, you need to figure out who you’re actually competing with so you can accurately compare data. What works for a business similar to yours may not work for your brand.
So how can you accomplish this goal?
I divided your “competitors” into two categories: direct and indirect.
Direct competitors are companies that offer a product or service that could pass as a similar substitute to yours and that operate in your same geographic area.
On the other hand, an indirect competitor offers products that aren’t the same but could meet the same customer need or solve the same problem.
It sounds simple enough on paper, but these two terms are often used incorrectly.
When comparing your brand, you should only focus on your direct competitors. This is something that many brands get wrong.
Let’s look at an example: Stitch Fix and Fabletics are both subscription services that sell clothing on a monthly basis and cater to a similar target audience.
But if we look deeper, we can see that the actual product (clothing in this case) isn’t the same: one brand focuses on stylish everyday outfits, while the other sells workout-focused apparel.
Yes, these brands serve the same need for women (having trendy clothes delivered to their doorstep month after month), but they do so with completely different types of clothing, making them indirect competitors.
This means that Kate Hudson’s team at Fabletics wouldn’t want to spend their time studying Stitch Fix too closely, as their audiences likely vary quite a bit. Even if it’s just a little, this small variation is enough to make a big difference.
Now, this doesn’t mean you should completely write off your indirect competitors.
Keep these brands on your radar, as they could change positions at any time and cross into the direct competition zone. Using our example, Stitch Fix could start a workout line, which would certainly change things for Fabletics.
This is also one of the reasons you'll want to routinely run a competitive analysis. The market can and will change at any time, and if you don't analyze it constantly, you won't notice until it's too late.
2. Determine what products your competitors offer
At the heart of any business is your product or service, which makes this a good place to start.
You’ll want to analyze your competitor’s full product line and the quality of the products or services they offer.
You should also take note of their pricing and any discounts they offer to customers.
Some questions to consider include:
- Are they a low-cost or high-cost supplier?
- Are they primarily working in volume sales or one-time purchases?
- What is their market share?
- What are the characteristics and needs of their ideal customers?
- Are they using different pricing strategies for online purchases versus brick-and-mortar stores?
- How does the company differentiate itself from its competitors?
- How do they distribute their products/services?