Michael Epps Utley 
Do you have a complete understanding of your competitors? If not, you can’t know if one or more of them is doing something that could significantly cut into your bottom line.
This guide explains how to completely analyze your competitors to gain the knowledge you need to compete at your peak.
What Is a Competitive Analysis?
When you conduct a competitive analysis, you gather data and information about the products, services, marketing, sales, and other aspects of the businesses you compete against and leverage that data to identify strengths and weaknesses and discover potential opportunities.
A competitive analysis can help you understand the marketplace better and make informed decisions to improve your organization’s position in its industry.
This guide explains everything you must know to conduct a thorough and informative competitive analysis.
The Value of a Competitive Analysis
A competitive analysis is critical for any company that wants to succeed in a crowded and competitive marketplace. It will help you:
Develop a clear picture of your market and industry
Compare your business performance with that of your competitors
Find out things competitors are doing that you are not
Come up with aspects of your business that make it unique
Stay current on market changes
Things to Include in a Competitive Analysis
The things you include in your competitor analysis depend on your goals and the industry you operate in.
For example, an online gourmet shop owner will want to know what products competitors sell that they do not, while a software company will probably want to know about their competitors’ features and pricing structure.
Here are seven factors most competitive analyses should include.
1. Products, Services, and Features
Compare your offerings to those of your competitors and note what makes yours stand out or fall behind. Go deep so you come away with a complete picture. It will help you understand what the other businesses are doing differently and why, along with areas for improvement.
2. Pricing
Pricing is how much you charge for your products and services. Use your competitors’ pricing structures to guide your own. It will help ensure that you’re not over- or under-charging. It could also help you uncover ideas for deals, discounts, and subscriptions that could drive more business.
3. Target Audience
Your target audience is the cluster of consumers you want to sell your products and services to. When conducting a competitive analysis, take time to understand who your competitors are targeting.
How is it different from your target audience, if at all?
What pain points are they resolving?
What are their preferences and shopping behaviors?
Are competitors targeting people you are not?
If you share similar target audiences, how can you serve them better?
Some key things to include in your target audience research include:
Demographics: Age, gender, location, education, income
Psychographics: Interests, values, goals
Behaviors: Habits, preferences, pain points
Needs: Problems, solutions, benefits
Sophistication: Knowledge, awareness, familiarity, market saturation
4. Marketing
To level set, marketing is the process of building a brand and promoting your products and services to people in your target audience. Review your competitors’ marketing strategies and tactics to improve your own.
Take time to look over:
Website: Design, content, SEO
Social media: Platforms, posts, content type, engagement
Email: Newsletters, campaigns, statistics
Advertising: Platforms, ads, available data
Public Relations: Coverage, press releases, ratings and reviews
5. Differentiators
Differentiators are the things that make your products, services, and customer experience unique and superior. Find out how your competitors position their businesses and offerings to determine what sets yours apart. It can help you figure out how your products, services, and customer experience are better — or could be made better. Use what you learn to communicate those differentiators to prospective buyers.
Look into factors like:
Quality
Features
Experience
Variety
Convenience
Sustainability
Social impact
6. Strengths
Strengths are the aspects of your business (products, services, customer experience) that give you an edge over the competition. List and analyze your strengths as you complete your competitive analysis. It will help improve your communication with consumers and differentiate your brand.
7. Weaknesses
Weaknesses are the parts of your operation (products, services, customer experience) that disadvantage it compared with competitors. It could be more important to list and analyze weaknesses than strengths. Doing so will help you improve your operation, lowering the risk of alienating consumers and sending them to better-positioned competitors.
How to Conduct a Competitive Analysis
Here are the steps you must follow to conduct a thorough analysis.
Identify competitors. Build a list of key competitors in your sector and marketplace. Don’t go too broad, as it could make your analysis overwhelming. Focus on similar-size businesses that serve the same audiences with comparable products and services in your industry and area.
Develop competitor profiles. Set up a spreadsheet to document and save competitor research information easily.
Conduct research and capture data. Use your spreadsheet to document everything you learn.
Analyze information. Come up with those lists of strengths that can help power business success and weaknesses that can help you improve your operation.
Track and monitor results. Once you have completed your competitive analysis, track and monitor business results. This will help you understand whether operational changes that resulted from your competitive analysis were effective and identify additional areas for improvement.
Competitive Analysis: The Final Word
A competitive analysis isn’t once-and-done. Many experts believe they should be conducted every quarter, which may seem overwhelming for most small businesses. However, with the rapid change in how businesses operate and promote themselves in the digital age, it’s certainly worth setting aside the time. You never know when a competitor could introduce something new that could cut into your bottom line.
