A Competitive Analysis: The Basics

The success of business depends on the ability to stand out from the competition. This means that you need to gather knowledge about who your competitors are, and what value they bring to the market. Fortunately, you do not need to hire a market intelligence firm to get this information. You can find out a lot by conducting research on your own. Before you start, first you need to well understand what competitive analysis is and its main purpose.

A competitive analysis could be defined as an assessment of your competitors’ products / services and sales tactics. You need to evaluate their strengths and weaknesses and compare them to your own. A full competitive analysis should be conducted at least once a year. “You always want to stay on top of what your competitors are doing and where you stand,” says Mallika Kazim, Senior Business Advisor at the Business Development Bank of Canada (BDC).

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The main purpose of a competitive analysis is to see your own unique advantages and potential barriers to your growth. You can utilize this information to strengthen your marketing and business strategies. It also helps run your business proactively and avoid the mistake of running your business on preconceived ideas about your competitors and the market. 

“Challenge your assumptions because the data changes all the time. Don’t wait until a competitor launches a new product before changing your strategy, otherwise you might end up in a reactive position to market changes,” Kazim says. She implies that you should be proactive so you can strengthen the competitiveness of your products / services, thus securing your market position. 

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A competitive analysis can be conducted in a number of ways. There are many factors to take into consideration to evaluate one’s market position. Some of them will be reviewed below.

1. Research your competitors’ sales tactics and results. Answering such questions as “(1) What are their revenues each year? (2) What about total sales volume? (3) Are they expanding? Scaling down?” will help you estimate the competitiveness of their sales process as well as prepare information that your sales reps could use in the final buy stage. It also recommended asking leads directly about their current service providers, whose services they used in the past, and whose services they are considering using.

2. Analyze your competitors’ content strategy. First, look at the quantity of their content. Next, determine the frequency of their content. Then move on to evaluating the quality of their content. To make the process more manageable, review a few samples of their content. In your evaluation, focus on such topics as the accuracy of content, text structure or the depth of covered topics. A careful analysis of your competitors’ content strategy might help you better understand their lead-generation strategy.

3. Conduct a competitor SWOT analysis. Any time you assess your competitors, analyze their strengths, weaknesses, opportunities and threats. To get you started, find out your competitors’ advantage over your brand and contrast it with your advantage over their brands. Then look for opportunities that your competitors have successfully identified. Finally, consider areas in which your competitors pose a threat to your brand. A competitor SWOT analysis will help better position your company and guide you in identifying which areas you need to improve. 

4. Talk to your competitors’ customers. Read online reviews and comments on your competitors products / services. Reach out to those people who had a bad customer experience at your competitors’ to find out more. The information they will share will help you learn more about the customer experience. Your attention could also lead to business down the road. To achieve this, make sure to emphasize that you are ready to fulfill their unmet business needs and offer better customer service.   

5. Understand your competitors’ marketing strategies. A common mistake many businesses make is underestimating their competitors’ marketing efforts. Understanding how your competitors market their products / services offers a broader perspective, which could be utilized for improving one’s own marketing strategy. To start with, find out what your competitors are promoting, how they are handling their contact lists, and how they are distributing content online. To find out more, assume the role of a potential customer. Try abandoning a shopping cart and analyze their response. The insights you gather could be especially beneficial to your sales team. 

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References:  bdc.ca | Christine White, hubspot.com | Dan Casarell, uschamber.com | Kaleigh Moore, shopify.com