Competitor analysis is vital among businesses, especially in industrial and manufacturing B2Bs who thrive in tight markets. Ever wonder how to do a competitive analysis? Why is it necessary, and what are the values it brings? In this post, we will talk about everything in detail and also share a 5-tier guide on how to do a competitive analysis.
Whether you are planning to start an eCommerce business or gearing up for a new marketing plan, understanding where you stand in the market in terms of the competition is an important step.
The way you figure out your position in the market is called “Competitor Research or Competitive Analysis”. Keeping an eye on the competition is vital to ensure that a newcomer does not suppress you. Luckily, competitor analysis makes sure that this doesn’t happen. In this post, we will share some easy steps on how to do a competitive analysis—anywhere, anytime.
What Is Competitive Analysis?
In layman’s terms, competitive analysis is the process of studying your competitors, analysing their performance, and market value to obtain some value-driven information. But, a competitive analysis does more than just analysing your competitors’ position in the market.
A well-thought-out competitive analysis helps you recognise & address gaps in the market, identify the latest market trends, and, of course, highlight potential opportunities to strengthen your marketing and sales efforts to outperform the competition.
HubSpot says, with a solid competitor analysis, “you can build a solid business plan to strive and improve upon your competitors”. But, how to do a competitive analysis that is effective? We will reveal that trick shortly. Let’s talk about the significance of competitor research in today’s dynamic marketplace.
Why is Competitor Analysis Important?
Competitor analysis is often discussed in regards to eCommerce, but it is equally crucial for B2B companies. The sole purpose of the competitive analysis is to understand your competitors’ value (strengths & weaknesses) in comparison to yours.
Moreover, a competitor analysis is important because;
- It helps you identify the path to create a successful business plan
- It tells you how to outperform your competitors and in which areas
- It gives you a competitive edge in terms of customer retention and future plans
If you are already in the game but lack professional insights, here is a detailed guide on how to get a competitive analysis that works for your growth.
While you are looking for how to analyse competitors, we assume that you’ve already marked your competitors. Even if you are starting from scratch, this 5-tier guide on how to do a competitive analysis will briefly discuss everything.
#1 Identify Your Competitors First
How to identify competitors? If this question turns you to run a query, similar to your product and services and shortlist the top ten SERP results, you’re doing it all wrong.
While you’re supposed to have an idea of the biggest brands in your market—you might not be sure which ones are really into your targeted market.
For example, let’s say you are a business magazine targeting entrepreneurs—that’s quite a specific niche. If you consider competing with Forbes, Fortune, WIRED, Bloomberg Businessweek, you may never be able to accomplish desired outcomes. What you need to do is to find which brands have the most shares among the specific audience.
When you learn how to do a competitive analysis, we’d recommend getting a big picture of brands that give direct competition.
#2 Explore Your Competitor’s Products Or Services
Now when you know what brands are on your audience’s radar, you can dig deep. You should start familiarising yourself with their services—identify the gap in between. What price range they are in, and how does it compete with your prices? Now look at the quality of services and products—are they better/worse/same or what.
How to do a competitive analysis? That’s the question we all are grappling with at this time or another. While you are at the initial stage, we’d recommend creating a market map that involves arranging brands according to their market position. Let’s say, for example, differ the options based on cost, brand value and customer retention.
It will give you a better picture of what we are going to discuss next.
#3 Analyse Competitor’s Market Share
Diving deep into your competitor’s financial strength can help you learn a lot about their process. For the UK based competitors, you can check accounts filed at Companies House.
Once you get an idea of the company’s market share, you can measure the revenue growth. But, there could be many reasons to determine growth, other than strategic planning. To get better insights into your competitors, you better explore trade publications and other online sources.
Perhaps the most important aspect of how to do a competitive analysis requires you to look for;
- Funding the company has received
- Investment, the company, has made in previous five years
- Future plans (to expand its horizon or enter into new markets)
- New hires and current openings
- Anything that signals something that you can make the virtue out of
#4 Have A Sneak Peek Into Their Marketing Strategy
Have you ever looked at the efforts your competitors are putting out to reach their audience? What sets them apart amongst so many top-brains in the market? Is that your concern? Let’s peak through their marketing strategy.
That’s where the actual journey begins. It is marketing, which determines success and failure in almost any business vertical. When researching your competitor’s marketing strategy, here is what to look for;
- Owned channels: blogs, newsletters, podcasts, or in-house magazine
- Paid channels: ads on Google, Facebook, Instagram or other platforms
- Organic Social Traffic: if yes, what social media channels are they leveraging the most?
- Paid Search: what keywords are they targeting for PCC/Google Adwords?
- Search Engine Optimization: when looking for how to do a competitive analysis, it is never unworthy to look at their SEO techniques.
- Display Ads: check if they are advertising on third-party websites. If yes, what are the outcomes?
- Affiliate Marketing: do they have one? Check how their affiliate program is doing?
- Sponsorship or Partnership: are they affiliated with any big brand?
- PR: are you on the stage to issue press releases or involved in any kind of PR stunt?
#5 Carry Out A SWOT Plan
The find step in how to do a competitive analysis is taking a small portion from everything you’ve learned yet in this guide.
SWOT analysis is a strategic competitive analysis technique used by a person or business to identify Strengths, Weaknesses, Opportunities, and Threats related to their competitors.
Here is how to do a competitive analysis with this plan;
Strength—What are the areas your competitors are doing exceptionally well? What puts them apart from others in the market? How solid are their finances and team?
Weakness—What are the areas your competitors are failing? What do you think they should’ve done to avoid this? What are their limitations? Also, look for the existing or potential loopholes in the marketing strategy.
Opportunities—What is missing from their products or services? What can be done to enhance the customer experience or retention rate? Are they failing to leverage any source?
Threats—What are the areas they can outperform you? Are you competing, specifically into your segment? Are their prices lower than yours?
We have to admit that we are in a fast-paced market with abundant opportunities to expand your strategy and grow with the competition. However, you cannot achieve desired outcomes without a well-thought-out competitive analysis. Hopefully, this guide on how to do a competitive analysis will help you.