How to Do a Competitive Analysis (Fast & Easy)

Competitive analysis may seem like a daunting task at first, but it doesn’t have to be. By following a simple five-step process, you can conduct a competitive analysis for your business that will help you stand out in the market.

First and foremost, it’s important to understand what a competitive analysis is and why it’s important. A competitive analysis involves comparing your business to your competitors in order to identify where you stand in the market. This can be done for your business as a whole, specific products and offerings, marketing channels, and more. By conducting a competitive analysis, you can improve your marketing efforts, bring new products to market, enter new markets, and more.

The five steps outlined below provide a framework for conducting a competitive analysis:

1. Identify your competitors: Start by identifying who your competitors are. This can be done by searching on Google, using competitive analysis tools, looking at review sites, and asking your customers. Categorize your competitors into direct, indirect, and perceived/replacement competitors.

2. Identify your competitors’ products: Take the time to understand exactly what products or services your competitors offer. This can be done by exploring their website, reading reviews, understanding their pricing tiers, and looking at the keywords they are bidding on.

3. Identify your competitors’ target audience: While your competitors may have the same audience as you, it’s important to dig deeper and identify the nuances of their target audience. Look at testimonials, review websites, and social media profiles to understand who your competitors are targeting.

4. Identify their positioning and messaging: Understand how your competitors position themselves in the market and what messaging they use to communicate their unique value proposition. Look at their business descriptions, “soft skill” content, press releases, and newsletters or blogs.

5. Summarize it all with a SWOT analysis: Use a SWOT analysis to visualize the information you gathered in the previous steps. Identify your competitors’ strengths, weaknesses, opportunities, and threats, as well as your own.

By following these steps and tips, you can conduct a comprehensive competitive analysis for your business. Remember to stay unique, prioritize your customers, and use the insights gained from the analysis to refine your positioning, messaging, and unique value proposition.

FAQs:
1. Why is competitive analysis important for businesses?
Competitive analysis helps businesses understand where they stand in the market, identify their competitors, and improve their marketing efforts.

2. How often should businesses conduct a competitive analysis?
Businesses should conduct competitive analyses regularly to stay informed about their competitors and market trends.

3. Can businesses use competitive analysis to develop new products or services?
While competitive analysis can provide insights into market gaps and opportunities, businesses should primarily focus on positioning and messaging in their analyses.

4. How can businesses ensure they stay unique while conducting a competitive analysis?
Businesses should adapt ideas from competitors but avoid directly copying them. It’s important to focus on your brand story and what makes you unique.

5. What is the main purpose of a SWOT analysis in a competitive analysis?
A SWOT analysis helps businesses identify their competitors’ strengths, weaknesses, opportunities, and threats, as well as their own, to make informed decisions and strategies.