What is competitive analysis?

Competitive Analysis: Definition, Practice, and Examples

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Competitive analysis usually involves collecting information about your products or services competitor, price, marketing strategy, targeted customer and market share. This information can be obtained through a variety of methods, such as market research, surveys, online reviews, and social media monitoring. Let's Johnson's Blog Find out more in the following article

What is Competitive Analysis?

Competitive analysis is a process of studying and evaluating your competitors to determine their strengths and weaknesses, as well as their strategies and tactics. The goal of competitive analysis is to better understand your market and how your product or service fits into that market.

Once you've collected this information, you can use it to compare your services with those of your competitors and identify areas where you can improve. This can help you develop a more effective marketing strategy, improve your product or service, and ultimately gain a competitive edge in your market.

What is competitive market research?

Competitive market research is the process of gathering and analyzing information about your competitors and the market in which your business operates. The purpose of competitive market research is to help you understand your competitive landscape, identify growth opportunities, and develop effective strategies to compete in your industry.

Some of the key components of competitive market research include:

  • Identify competitor your: This involves researching companies that offer similar products or services to yours and understanding their strengths and weaknesses.
  • Analysis marketing strategy of the opponent: This involves researching how your competitors promote their products or services, the channels they use, and the messages they use to reach the target audience.
  • Understand your competitor's pricing strategy: This involves researching how your competitors price their products or services and compare their prices with yours.
  • Review customer feedback: This involves analyzing customer reviews and feedback about a competitor's product or service to identify areas where they excel or fall short.

By conducting competitive market research, you can better understand your industry and competitors, identify areas for improvement, and develop strategies to differentiate yourself and your competitors. gain competitive advantage.

How to do Competitive Analysis

Here are the steps to take to conduct a competitive analysis:

  • Identify your competitors: Make a list of your direct and indirect competitors. Direct competitors are those that offer the same product or service as you, while indirect competitors offer a similar product or service that can be used as a substitute.
  • Collect information: Gather information about your competitors by researching their websites, social media profiles, press releases, marketing materials, and annual reports. You can also use online tools like SEMRush or SimilarWeb to track their online activities.
  • Analysis of strengths and weaknesses of the opponent: Assess your competitors' strengths and weaknesses in terms of their products or services, pricing, marketing strategies, target customers, and market share. Identify what they do well and what areas they may be lacking and compare it to your own business.
  • Identify market position of the opponent: Determine where your competitors are in the market and how they differentiate themselves from others. Identify their unique selling points (USPs) and how they communicate that to their customers.
  • Competitor price analysis: Evaluate your competitors' pricing strategies and understand how they price their products or services. Determine if they offer discounts, promotions or freebies on their products/services.
  • Identify targeted customer of the opponent: Understand who your competitors' target customers are and what their needs and wants are. Analyze how they reach customers and what channels they are using to communicate with them.
  • Identify opportunities for improvement: Based on your analysis, identify areas where you can improve and differentiate yourself from your competitors. Identify how you can deliver better value to your customers and develop a strategy to achieve this.

By conducting competitive analysis, you can better understand the market and competitors, identify growth opportunities, and develop effective strategies to compete in your industry.

Identify your competitors

To determine competitor yours, you can follow these steps:

  • Define your industry: Start by defining your industry and the products or services you offer. This will help you understand the market in which you operate and identify similar businesses.
  • Conduct research online: Use search engines to find businesses that offer similar products or services to yours. Check out their website, social media profiles, and online directory to learn more about them.
  • Ask your customers: Ask your customers who else they have reviewed before or are currently considering buying a product or service like yours. This can help you identify your direct competitors.
  • Attend industry events: Attend industry events, conferences or trade shows to connect with other businesses and gain a better understanding of the market.
  • Check local directories: Check local directories, such as Yellow Pages, to identify businesses in your area that offer similar products or services.
  • Analyze your supply chain: Analyze your supply chain to identify businesses that offer similar products or services to yours.

Remember that your competitors can be both direct and indirect. Direct competitors offer the same products or services as you, while indirect competitors offer similar products or services that can be used as substitutes. Identifying your competitors is an important step in conducting competitive analysis and developing effective strategies to compete in your industry.

Collect information

Once you have identified your competitors, the next step is to gather information about them. Here are a few ways to gather information about your competitors:

  • Visit a competitor's website: Visit your competitor's website to get an idea of what they offer, how they present themselves, and their pricing.
  • Follow them on social media: Follow your competitors on social media platforms like Facebook, Twitter, Instagram, and LinkedIn to see how they interact with customers, the type of content they post, and what promotions they offer.
  • Search news and media coverage: Search news and media coverage of your competitors to see what the media is saying about them and their reputation.
  • Attend industry events: Attend industry events, conferences and trade shows where your competitors are to connect with them and learn more about their business.
  • Surveying: Conduct surveys of your target audience to understand their preferences and to know what they think of your competitors.
  • Analyze competitors' online activities: Use online tools like SEMrush, SimilarWeb or Google Analytics to track their online activities and understand their online strategy.
  • Analyze customer reviews: Analyze customer feedback and reviews of competitors' products or services to identify their strengths and weaknesses.

By gathering information about your competitors, you can better understand their business, market positioning, and their strengths and weaknesses. This information can help you develop effective strategies to compete and differentiate in your industry.

Analyze competitor's strengths and weaknesses

Analysis of strengths and weaknesses of competitors is an important part of conducting competitive analysis. Here are some ways to analyze their strengths and weaknesses:

  • Review competitor products or services: Evaluate competitor products or services to understand their features, quality, and pricing. Identify what they do well and what areas they may be lacking.
  • Analyze competitor's marketing strategy: Analyze your competitors' marketing strategies to understand how they reach their target audience, the messages they use, and the channels they use to communicate with customers.
  • Understand your competitor's pricing strategy: Evaluate your competitors' pricing strategies to understand how they price their products or services, whether they offer discounts or promotions, and how their pricing compares to yours.
  • Identify your competitors' unique selling points (USPs): Determine what makes your competitors unique and what their USP is. Analyze how they communicate the USP to their customers.
  • Analyze customer feedback: Analyze customer feedback and reviews of competitors' products or services to identify areas where they excel or fall short.
  • Evaluate competitor's financial situation: Evaluate your competitors' financial position, revenue and growth rate to understand their financial stability.
  • Analyze competitor leadership or management: Analyze competitors' leadership or management to understand their vision, strategy, and decision-making processes.

By analyzing your competitors' strengths and weaknesses, you can identify areas where you can differentiate yourself, improve your own product or service, and develop strategies. effectively to compete in its industry.

Determine competitor's market position

Determining your competitor's market position is an important part of conducting a competitive analysis. Here are some ways to determine their market position:

  • Evaluate competitor's target customers: Analyze your competitors' target customers to understand who they are, what their needs and desires are. Determine how your competitors are reaching their customers and what channels they are using to communicate with them.
  • Analyze competitor messages: Analyze competitor messages to understand how they position themselves in the market. Identify what they are emphasizing in their message and how they communicate their unique selling points (USPs) to their customers.
  • Evaluate competitor's brand identity: Evaluate your competitors' brand identity to understand how they present themselves to customers. Define what their brand values and personality are and how they use their brand identity to connect with customers.
  • Determine competitor's market share: Determine the market share of competitors to understand how much market they are capturing. Determine if they are dominating the market or if there is room for new players.
  • Analyze competitors' distribution channels: Analyze competitors' distribution channels to understand how they reach customers. Determine if they are using traditional distribution channels or they are leveraging e-commerce or other digital channels.

By identifying your competitors' market positions, you can better understand their strengths and weaknesses, and identify growth and differentiation opportunities. This information can help you develop effective strategies to compete in your industry.

Competitor pricing analysis

Competitor pricing analysis is an important part of conducting a competitive analysis. Here are some ways to analyze their prices:

  • Identify pricing strategy of the opponent: Determine if your competitors use a premium pricing strategy, a value strategy, or a competitive pricing strategy. This will help you understand how they position themselves in the market.
  • Analyze competitor's pricing structure: Analyze your competitors' pricing structure to understand how they price their products or services. Determine if they offer discounts, promotions, or bundles of their products/services.
  • Compare competitor prices with yours: Compare your competitors' prices with yours to understand how you stack up in terms of pricing. Determine if you are offering a similar value proposition or if you need to adjust your pricing strategy.
  • Analyze competitor pricing history: Analyze your competitors' pricing history to understand how they've adjusted their prices over time. Determine if they have increased or decreased in price and the reasons behind those changes.
  • Determine competitor's price elasticity: Determine your competitors' price elasticity to understand how their customers react to price changes. Determine if their customers are price sensitive or they are willing to pay a higher price for the product/service.
  • Analyze competitor's packaging and packaging strategy: Analyze competitors' packaging and packaging strategies to understand how they create value for their customers.

By analyzing your competitors' prices, you can better understand how they're positioning themselves in the market and determine if you need to adjust your own pricing strategy to stay competitive. This information can help you develop effective pricing strategies that will set you apart from your competitors and attract more customers.

Identify your competitors' target customers

Identifying your competitors' target customers is an important part of conducting a competitive analysis. Here are a few ways to define their target customers:

  • Document analysis marketing of the opponent: Analyze competitors' marketing materials such as their websites, social media profiles, and ads to understand who they are targeting. Look for information such as messages, images, and language used to understand their target audience.
  • Check out competitor's customer reviews: Review customer reviews and feedback on competitor products or services to understand who their customers are and what they value.
  • Research your competitors' social media presence: Research your competitors' social media presence to understand who is engaging with their content and what their followers are saying about them.
  • Attend competitor events: Attend competitor events, such as product launches or trade shows, to observe attendees and understand who their target audience is.
  • Analyze competitor sales data: Analyze competitor sales data to understand which product lines or services are most popular and who is buying them.
  • Surveying: Conduct a survey of your target audience to understand who they consider your competitors and what they think about their products or services.

By identifying your competitors' target customers, you can better understand their needs, preferences, and buying behavior. This information can help you develop effective marketing strategies to target similar customers and set you apart from your competitors.

Identify improvement opportunities

Identifying opportunities for improvement is an important part of conducting competitive analysis. Here are a few ways to identify improvement opportunities:

  • Competitor weakness analysis: Analyze your competitors' weaknesses to identify areas where you can improve. Determine if they lack product quality, customer service, pricing, or marketing.
  • Assess your strengths and weaknesses: Evaluate your strengths and weaknesses to identify areas where you can improve. Determine if there are areas where you can differentiate yourself from your competition and provide better value to your customers.
  • Research customer feedback: Research customer feedback and reviews about your competitors to understand what customers like and don't like about their products or services. Identify areas where customers are unhappy and determine if you can address those issues.
  • Industry trend analysis: Analyze industry trends to identify emerging opportunities or threats. Determine if there are new technologies, products, or services that you can leverage to gain a competitive advantage.
  • Conduct market research: Conduct market research to understand your target audience and their needs. Determine if there are unmet needs or gaps in the market that you can address.
  • Research successful businesses in other industries: Research successful businesses in other industries to identify best practices that you can apply to your business.

By identifying improvement opportunities, you can develop effective strategies to differentiate yourself from your competitors, deliver better value to your customers, and position your business for growth. and successful.

Competitive Analysis Example

Here is an example of a competitive analysis for a hypothetical company that sells organic skin care products:

Identify competitors

  •     Kiehl's
  •     Tata Harper
  •     Herbivore Botanicals
  •     Drunk Elephant

Analyze competitor's strengths and weaknesses

  • Kiehl's: Strengths include a long history of effective skin care products, strong brand identity, and good customer service. Weaknesses include higher prices and limited natural and organic options.
  • Tata Harper: Strengths include a focus on organic and natural ingredients, transparency in sourcing and manufacturing, and premium packaging. Weaknesses include higher prices and a limited product line.
  • Herbivore Botanicals: Strengths include focus on clean and natural ingredients, reputable brands and unique products. Weaknesses include higher prices and limited availability.
  • Drunk Elephant: Strengths include focus on clean ingredients and simple skin care approach, good product packaging and competitively priced products. Weaknesses include limited product offerings and some controversy over their ingredients.

Determine competitor's market position

  • Kiehl's: Positioned as a trusted, premium skincare choice with a focus on scientifically proven ingredients.
  • Tata Harper: Positioned as the luxury, premium organic skincare choice.
  • Herbivore Botanicals: Positioned as a trendy, unique option for those looking for natural skin care.
  • Drunk Elephant: Positioned as a clean, non-greasy option for all skin types.

Competitor pricing analysis

  • Kiehl's: Pricing is higher, with most products falling around $50-$100.
  • Tata Harper: Prices are steep, with most products over $100.
  • Herbivore Botanicals: Prices are higher, with most products falling around $30-$80.
  • Drunk Elephant: Competitively priced, with most products falling around $20-$80.

Identify your competitors' target customers

  • Origin: Targeting people who want natural skin care options but care about the price.
  • Kiehl's: Targets people who want high-end, effective skin care products and are willing to pay for them.
  • Tata Harper: Targets people who want organic, luxury, and ready-to-pay skin care options.
  • Herbivore Botanicals: Targeted at people who want trendy, unique natural skin care options.
  • Drunk Elephant: Targeted at people who want clean, effective skin care at a reasonable price.

Identify improvement opportunities

  • An organic skin care company can differentiate itself by offering a wider range of products at competitive prices.
  • The company can also focus on transparent manufacturing and sourcing practices to attract customers who prioritize sustainability and ethical sourcing.
  • The company can target customers who want natural and organic skin care options but care about price, by offering affordable, high-quality products.

By conducting a competitive analysis, an organic skincare company can better understand their competitors, their strengths and weaknesses, and their opportunities for differentiation and growth in the market.

Conclusion

Competitive analysis is an important part of any business strategy. By identifying your competitors, gathering information about them, and analyzing their strengths and weaknesses, you can better understand your market and develop effective strategies to compete and create difference for yourself.

Through competitive analysis, you can identify opportunities for improvement, such as offering a wider range of products, improving customer service, or implementing transparent sourcing and manufacturing practices. than. You can also identify areas where you can differentiate yourself from your competition, such as through pricing, branding, or customer experience.

Overall, competitive analysis helps you make informed business decisions that are relevant to your market and position your business for growth and success.

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