How to do a competitive analysis
What is a competitive analysis?
To beat your competitors, you first have to know them. In the same way you should understand your core customers, you should also understand your main competitors. Competitive analysis is the act of analyzing your competitors’ behavior and actions.
How do you use complete a competitive analysis for your business?
While the landscape of competitors may seem endless at first, there are probably only a handful of main competitors if you are a small business owner who is just starting out. It will be less overwhelming for you to identify up to 5 main competitors who sell very similar products as yourself and highlight their strengths and weaknesses. A competitive strategy highlights your strengths, which means you have to understand your competitors’ weaknesses. Follow these simple steps to analyze and beat your competition.
Analyze their offerings. Include features like:
Price
Benefits
Quality
Durability
Image/style
Service
Warranties: Lifetime vs. limited time
Convenience
Ease of use
Ease of return
Free shipping
# of features
Type of features
Location(s)
Distribution/Sales
Certifications: LEED, Green Manufacturing
Endorsements
Analyze their websites
Analyze their social media presence
Identify their strengths & weaknesses
Use the template provided to get started and complete an exercise for each of your main competitors.
Why is performing a competitive analysis important?
Customers will choose one competitor over another for a better price, for better, faster, personalized or more convenient service or for better overall quality. While we understand you want to beat your competition on all three, we recommend that you focus on 2 out of the 3. Some competitors will also have an unfair advantage, or a core competency that cannot be copied or bought. Like deep domain expertise (hospital systems), an amazing hard thing (Google algorithm), authority (existing reputation in market), dream team (previous startup success). Understanding your competitors will be just as important as understanding your customers since it will allow you to understand why customers use products or services offered by existing providers.
Pro Tip
Remember to keep tabs on your competition, but don’t spend too much time! You can stay updated by simply setting up a Google Alert that will notify you for updates on keywords, like your competitors’ names, industry events, or market developments. Another way to keep up with your competition is to sign up for their newsletters or to follow them on social media so you’ll receive notifications as their customers do.
