Competitive analysis is the process of researching and comparing the activities, products, services, and marketing strategies of companies that offer similar solutions in the market. It is an essential element of business planning that allows the identification of strengths and weaknesses of one’s own company, as well as opportunities and threats arising from the environment. Through competitive analysis, one can better understand the needs and expectations of customers, tailor offerings to the market niche, stand out from other entities, and increase competitive advantage.

How to conduct competitive analysis?

Competitive analysis is a complex process that consists of several stages. They should be carried out systematically and thoroughly for a successful analysis. Here are the most important steps:

  • Define the goal and scope of the analysis – consider what you want to achieve through competitive analysis and which aspects of competitors’ activities you want to examine. You can focus on the overall market picture or specific elements such as prices, quality, distribution, promotion, customer loyalty, etc.
  • Select competitors for analysis – you don’t have to examine all companies operating in your industry or offering similar products or services. Focus on those that have the greatest impact on your market position and pose the greatest challenge to your development. You can categorize competitors into three groups: direct (offering identical or very similar solutions), indirect (offering substitutes or alternatives), and potential (entering or likely to enter the market in the future).
  • Gather information about competitors – use various data sources such as websites, social media, industry reports, customer reviews, advertising materials, market research, etc. Check competitors’ mission, vision, and goals, how they present their offerings, how they communicate with customers, their strengths and weaknesses, marketing and sales strategies, etc.
  • Process and interpret collected data – use appropriate analytical tools such as SWOT matrix, BCG matrix, Porter’s five forces, customer value analysis, etc. Compare your company with competitors in terms of various criteria and indicators. Identify your strengths and weaknesses, as well as opportunities and threats from the market. Draw conclusions and recommendations for your company.
  • Develop an action plan – based on the results of competitive analysis, plan your short-term and long-term goals and strategies. Decide what you want to improve or change in your offerings, how you want to acquire or retain customers, how to strengthen your market position and competitive advantage, etc.

You can conduct competitive analysis independently, but it is often better to seek the help of specialists. Competivo can assist you in performing a professional competitive analysis and even create a sound marketing strategy to differentiate yourself from your major competitors.

What are the benefits of competitive analysis?

Competitive analysis is not just an obligation or formality but, above all, an opportunity for development and improvement of business results. It brings many benefits, such as a better understanding of the market and its trends. It also allows a deeper understanding of customers and their needs, preferences, and behaviors. Most importantly, it provides insight into competitors and their offerings, strategies, and weaknesses. This, in turn, inspires ideas for innovations and improvements in your company, as well as identifying market niches or gaps that can be exploited. By doing so, you enhance your value for customers and customer loyalty. Moreover, you stand out from the competition, build a strong brand, and thereby improve efficiency and profitability.

Competitive analysis is not a one-time task but a continuous process that requires updating and adapting to changing market conditions. Remember that competitive analysis is not meant for copying or imitating competitors but for creating your own, unique, and attractive offerings for customers. Competitive analysis is not just a way to know your competition but, above all, a way to know yourself and your company. Through this, you distinguish yourself enough for customers to choose your company over competitors. It is, therefore, the key to success in the industry.