To perform a competitive analysis, follow these structured steps:
1. Identify Your Competitors
- Select 5 to 10 competitors with similar products or services and business models, including both direct and indirect competitors to capture a broad market view
- Use Google searches, industry directories, review sites, and customer feedback to find competitors
- Consider a mix of startups and established companies for a diversified perspective
2. Gather Information About Competitors
- Collect data on their product or service offerings, features, and how they compare to yours
- Analyze their pricing, shipping policies, and any perks they offer
- Research their marketing strategies, including advertising, content marketing, social media presence, and engagement levels
- If available, review financial health indicators such as sales, revenues, and market share
- Gather customer feedback from reviews, testimonials, and surveys to understand competitor strengths and weaknesses
3. Analyze Competitors’ Strengths and Weaknesses
- Rank competitors on key criteria such as product quality, pricing, customer service, location, and marketing effectiveness using a scoring grid or table
- Write an evaluation summarizing why consumers might choose or avoid each competitor based on these factors
- Identify what competitors do well and where they fall short
4. Perform a SWOT Analysis
- For each competitor and your own company, identify:
- Strengths (e.g., unique products, intellectual property, strong workforce)
- Weaknesses (e.g., pricing issues, leadership challenges)
- Opportunities (e.g., new market niches, evolving consumer preferences)
- Threats (e.g., new regulations, increased competition)
- Use this to compare your position relative to competitors and uncover areas for improvement
5. Compile and Use Your Competitive Analysis Report
- Organize your findings into a clear report or template covering:
- Company overview (history, size, mission)
- Product/service comparison
- Marketing and operational strategies
- Strengths and weaknesses analysis
- Use tools like spreadsheets or visualization software (e.g., Miro) to map out insights and identify strategic moves
Additional Tips
- Regularly update your analysis as markets and competitors evolve
- Start with a manageable number of competitors (e.g., three) and expand as needed
- Leverage multiple sources and methods, including online research and direct customer insights
This approach helps you make data-driven decisions to better position your company in the market and identify opportunities for growth and differentiation
