How to Conduct a Competitive Analysis (Free Templates)

They say competition brings out the best in products and the worst in people, and we couldn’t agree more. When it comes to stealing market share for your products & services, it’s important to keep tabs on your competitors. This allows you to benchmark your performance against industry standards while also helping you stay on top of ever-changing market trends & customer demands.

Running a competitive analysis is standard business practice if you want to understand your market better. Once you know who you’re up against, you are in a better position to identify specific areas where your rivals excel, and where they fall short – and what you can do about it! From small entrepreneurs to giant multinationals – a competitive analysis is the bread & butter of market research as it helps you find your niche, earn customer loyalty, and create more insightful business plans for the future. 

In today’s post, we tell you everything you need to know about competitive analysis, why it matters, and how to run one for your own business or company.

In today’s post, we tell you everything you need to know about competitive analysis, why it matters, and how to run one for your own business or company.

But before we dive into all that, here’s a snapshot of the kind of things you want to compare & co-analyze about your business against your rivals:

• Product quality & features
• Sales tactics
• Brand identity
• Marketing strategies
• Digital brand presence
• Customer experience
• Company size
• Market share
• Target audience
• Operating expenses
• Employee wages
• Growth & expansion strategies

How To Run a Competitive Analysis?

At its core, a competitive analysis compares your competitors against your brand to understand their core differentiators, strengths, and weaknesses. 

Here are the 5 basic steps you need to follow to perform a Competitive Analysis for any business:

Step 1: Identify your competitors

This step is crucial and forms the basis of the rest of this analytical exercise. If you don’t know who you are up against, how will you know how to outshine them? Remember, most businesses face different kinds of competitors:

Direct competitors

Businesses that sell a similar product or service to a similar audience (e.g., WordPress & Wix).

Indirect competitors

Businesses offering a different product or service but meeting the same customer needs (e.g.,  Starbucks & McDonald’s).

Perceived competitors

Offer a different product/service that doesn’t exactly meet the same need but is similar enough to serve as a replacement for your product/service.

Feel free to use our Competitive Landscape and Competitive Matrix templates to identify the different kinds of competitors you may be up against!

How to map your competitors

A quick Google or Amazon search is a good place to start – especially if most businesses in your industry operate online. For example, you can find out what brands and companies come up when you search for “mosaic tiles” or ‘‘moisturizing lip balm’. The top results are likely your competitors. 

Now, select anywhere between five and 10 of these competitors. Feel free to also use market reports, industry publications, and customer feedback to identify your key competitors. When selecting competitors, you are advised to choose the ones who offer similar products or services and work on a similar business model to you.

Remember to cover both startups and seasoned competitors as this will diversify & enrich your analysis.

Step 2: Find out what your competitors are offering

Now that you have a list of your toughest competitors, it’s time to dig your claws deeper and find out exactly what’s so great (or not so great) about your competitors and what they have to offer.

This is also the perfect time to direct your sales & marketing teams to collect data that helps you define a competitive baseline. For this, you will need both primary and secondary forms of research:

• Primary: Data generated directly from customers or competitors based on surveys, interviews, and focus group discussions.
• Secondary: Publicly available information like industry reports, news articles, and your competitors’ websites or social media pages.

When studying the business profile of your competitors, ask yourself:

• What features do you like (or dislike) most about their offerings?
• What is their discount policy? 
• What is their geographic reach?
• What’s their presence on social media like?
• Who are their target markets? 
• What is their unique selling proposition?
• How many years has the company been in operation? 

Answering the above questions will give you all the information you need to analyze your competitor’s product offerings, evaluate their pricing & marketing strategies, and identify their target audience and overall position in the market.

Here are some useful tips used by businesses to help them make more informed business decisions:

• You can use the 4-P Marketing Mix to examine how your competitors position themselves in the market in terms of Product, Price, Place, and Promotion.
• When evaluating the SEO or content strategy of your competitors, you can use tools like Ahrefs and SEMrush to find and analyze competitor keywords.
• For publicly traded companies, you can also review their annual company reports to gain insight into how much revenue they’re generating, their debt and liability, and other performance metrics.

Looking for a weighted scoring approach to understand your competition at different levels of analysis? Why not use our 3-level Competitive Analysis template to dig deeper into your competitive landscape at three distinct levels: product, market, and corporate!

Step 3: Find out who your competitors are targeting

Now, you might think that just because you are selling similar products, you are also targeting the same pool of customers. But that’s not always true. 

Let’s see, for one – your competitors may be targeting a more high-end clientele, using different ways of interacting with customers, say, a 24/7 chatbot, or designing their ad copy to attract the attention of a specific population segment. For these reasons and more, it’s important to dig deeper and understand the demographic profiles and personas of their target audience.

Here are some places you can look for a basic insight into who is being targeted and how:

Your competitor’s website

The official website of your competitors is a real gold mine of information! In addition to information about their product range and pricing structures, you can also skim through testimonials, case studies and success stories posted on their website to develop a sense of what kind of people are using and benefiting from their products.

Social media presence

Social media is another excellent source of qualitative data to help you learn more about a company’s target audience. When studying and analyzing your competitor’s social media presence, make sure of the following:

1. Be thorough in your market research since most companies these days operate multiple social media accounts, including but not limited to Facebook, Instagram, Pinterest, TikTok and more. 
2. Analyse the content of your competitors’ posts, stories and social media ads to find out who they are targeting, and how.
3. Have a good look at the type & level of follower engagement with their social media activity. See how many times a post is liked or shared by followers. For a deeper analysis, analyse the content of any comments made by followers to individual posts, and create a basic profile of these followers to narrow down their target audience.

Independent review sites

To gain unbiased customer insight, always check out review sites (like Google Maps or Yelp) where you get to access direct, unfiltered customer feedback about your competitors’ products or services. You can also note the customer ratings on third-party platforms for a more quantifiable assessment of the customer experience provided by different competitors.

Step 4: Compare features & pricing, etc.

So far, you know who you’re battling against. You also have a solid idea of where your competitors stand in the market in terms of size, reach, and influence. This brings us to our next crucial step: an in-depth product comparison that accounts for current and projected market share, sales, and revenues.

By pitting your offerings against your rivals’, you essentially put yourself in the shoes of the customer and ask yourself why they might choose (or not choose) each competitor. Depending on the nature of your product, the scale of your business, or your specific industry, you can compare product features, such as:

• Cost or price
• Style and design
• Product sales cycle
• Ease of use
• Type and number of warranties
• Customer support offered
• Product Quality
• Product range
• Product promotional strategies
• Marketing & distribution channels used
• Post-sale Service
• Customer journeys & satisfaction levels
• Messaging & Branding
• Communication channels & feedback mechanisms

By plotting your information in a tabulated form, you can easily figure out which features you lack and which ones you have an advantage in. In particular, see how your offerings compare with your competitors at the same price points. For example, a competitor might offer the same functionality as you but at a much higher price.

When comparing product offerings, consider the following:

• Which desires do their products satisfy? 
• What problems and pain points do their products solve? 
• What utility does the product offer to customers?
• What values do competitors communicate through their messaging? 
• How well are customers rating their offerings?

Use our Competitive Product Feature Analysis to step up your product development strategy by comparing product features and performance across competitors!

Step 5: Run a SWOT analysis

Piece it all together by running a comprehensive SWOT analysis for yourself and your competitors. A SWOT analysis is a flexible framework used to help a business plan for growth by organizing your thoughts and research insights into a wholesome perspective on how things are and what you need to do to level up.

You can visualize your findings in a chart, graph, or grid divided by categories and compare the strong and weak points of your business as it currently stands to those of your competitors. 

To find out which competitive advantages & disadvantages you have over your competitors, you can compare indicators like conversion rate, website traffic, number of social media followers, average order value, market share, and more. 

Feel free to use our SWOT Competitor Analysis Template to explore the effects of any strategies or tactics your competitors are implementing that you might want to embed in your own business model.

Step 6: Evaluate your next steps

A competitive analysis is not a one-and-done exercise. You will need to regularly (at least once a year) review your CA report to identify new sweet spots you can take over or new gaps you can fill to take your business to the next level. 

Now that you are familiar with the winning strategies and tactics that are working for your competitors, you can tailor them to fit your unique business context. Your findings may point to the need to tap into underserved markets, capitalize on new growth opportunities, or step up your marketing game, say, by lowering your prices or launching new promotions. Either way, you won’t know what conclusions & practical recommendations to draw from your analysis until you do the work and see the results for yourself.

Useful Tips & Insights

Review & update

Markets are not static environments but ones in constant flux. With new businesses entering your niche market as well as shifting industry or technological trends, you need to regularly update your competitor analysis to stay on top of your game.

You are advised to run a full competitive analysis at least once a year. We realize it’s tedious work to update your report, but it’s worth the labor as it makes your business decisions more market-responsive.  

When updating your analyses, be wary of confirmation bias, that is, using data or information simply because it aligns with your beliefs or views. To avoid this, you should proactively be open to, and seek out, data that goes against your initial assumptions.

Be Original

The point of researching other businesses is not to copy them directly but to help you differentiate your own brand so you can present your offerings as the best and most unique on the market. That said, you should use findings from your competitive analysis to learn from your competitors’ strengths and fill gaps where there are weaknesses but always stick to your own brand story.

Also, never use a marketing competitive analysis to decide what types of products or services to offer. Instead, use it to understand the best way to position your offerings and identify your unique value & selling points in the market.

“If all you’re trying to do is essentially the same thing as your rivals, then it’s unlikely that you’ll be very successful.” Michael Porter, Harvard Business School.

Who are These Templates For?

• Business strategists and analysts who want to make detailed competitor evaluations
• Product managers looking to  refine product development strategies
• Corporate planners who want to align business resources and capabilities with market needs
• Entrepreneurs looking to assess competition for a new venture

Wrap Up

And there you have it! The most important arsenal in every marketer and product developer’s toolkit. Come to think of it, why go through trial and error when you can learn so much faster by seeing what works for your competition — or what doesn’t. Whether you are a big business magnate or a budding start-up owner, a competitive analysis (done correctly) gives you an actionable sense of your market landscape, helping you preempt competitor moves and capture industry attention.

Once you learn the basic drill, you can conduct a Competitive Analysis for your business as a whole, for specific product lines, or specific marketing or sales channels, for example, you can run it exclusively for those products being sold or offered online.

Our free, designer-developed templates are fully customizable and can be downloaded in EXCEL and PowerPoint formats!