Structured intelligence creates better business strategies. Understanding where your organization ranks in the market compared to other companies is invaluable information that you need to improve your business. The best way to gather this information is to perform a competitive analysis. We’ve put together this ultimate framework for competitive analysis to guide you through the process. But first, let’s explore what exactly competitive analysis is and who can benefit from the result.
What Is Competitive Analysis?
Competitive analysis is a business management strategy that identifies how the top competitors in your industry perform. The purpose of a solid framework for competitive analysis is to see where your brand currently stands and reveal opportunities in the market. With this information, you can effectively strategize how to provide the best products and services in your industry. Many organizations perform continual competitive analysis on a core set of competitors and perform a competitive audit every 6-12 months to define and prioritize business objectives.
The results of doing this work can help you identify your unique value proposition. You might discover up-and-coming market trends that were not yet on your radar. Additionally, you will likely distribute this information in pitch decks, business strategy sessions, and executive summaries to inform and educate your stakeholders.
Who Benefits From Competitive Analysis?
Performing a thorough competitive analysis will provide you with plenty of qualitative and quantitative data to assist in decision making for various stakeholders. Business owners, startup founders, product managers, sales, and marketing teams will all benefit from your competitive insights.
By beginning with a robust framework for competitive analysis, you might discover industry nuances that were not obvious before. You can use these constant stream of insights to educate your marketing and sales teams ensuring that they have the tools to outperform the competition. Providing the most up-to-date intelligence is one of the key ways competitive analysis provides value in your organization.
Often, managers will hand off the competitive analysis results to individuals or teams to strategize how to improve in their department. These planning sessions might materialize as establishing new KPI’s or updates to the standard operating procedures to increase operational efficiency. Maybe some issues need to be addressed within your company culture. Or, perhaps you realize that the budget allocation needs adjusting to give specific departments more runway.
Framework for Competitive Analysis
First and foremost, you’ll want to do a SWOT analysis for your company. By dissecting your operations, you’ll better understand how to gauge your competitors. Then, you’ll be able to generate your list of research topics. We recommend using this template for each competitor you wish to analyze. Once collected, this information can be organized into an outline, spreadsheet, or presented as infographics. We’ll talk more about how to create a competitive analysis matrix in a future blog post. However, obtaining this information will lay the groundwork for any competitive analysis work you do in the future.
<Click here to learn more about Wide Narrow’s methodology>
Identifying the Competition
Think about your industry and product lines. The goal will be to identify primary, secondary, and tertiary competitors. You may choose to analyze anywhere from 3-10 competitors, and identifying them should be your first step. Secondly, you must find companies in your industry that share the same customer and the same solution as you do. Include competitors who most closely remember your company’s size and annual revenue. Be sure to have at least one disruptor in a similar market with the potential to compete and steal market share. It’s always valuable to keep an eye on those that wish to be where you are now. At the end of the day this exercise will help you plot every single competitor no matter where they are today or where they will be tomorrow.
General company information should be easily accessible. You will likely find most of this information on the company’s website or LinkedIn profile. If revenue is not publicly available, some online tools will help you establish an estimate. Jason Lemkin of SaaStr wrote a great article on how to do this.
The preliminary information you are looking for includes:
- Year Founded
- Funding - If applicable, this information is excellent to use when considering your valuation and setting reasonable expectations based on current market conditions.
- Company Summary - This could include information about the key players in the executive or management team. Understanding the experience and skill level required to fill specific roles will help you identify competitor strategies and products under development.
Understanding the Customer
Now that you have identified the competition, it’s time to research their products and services and the customers who purchase them. Since the goal is always to convert the competition’s customers to become your clients, this is valuable market research. Aside from its use in your competitive analysis, you will rely on this research as you develop new products and services that meet your customers’ needs.
To begin this process, do a brief SWOT analysis for each competitor. Listing three to five strengths and weaknesses, as well as opportunities and threats, will provide you with an excellent foundation for their ranking in the market.
Products and Services
When considering products and services, ask the following questions:
- What kind of product or service do they sell?
- Include single items, packages, and samples or free trials.
- How much do these offerings cost?
- This could be a one-off sale, monthly, or annual subscription.
- What are the perks, discounts, freebies, and add-ons offered?
- What technology do they use to build or manage their products and services?
- If you are not sure how to access this information, enter their website into BuiltWith to learn more about the technology profile.
- What are their distribution channels?
- Go through their sales process and document the workflow to understand how the products and services are being communicated.
- What kind of product or service do they sell?
When looking at customers, answer the following in detail:
- Who is the target audience?
- How many customer segments make up the target audience?
- What are their primary, secondary, and tertiary customer personas?
- What do customers say about the company, and where are they saying it?
- This could be a list of social media platforms or online forums.
- How do they field customer service complaints?
- What are the chief complaints?
- What are the primary praises?
- What are their customers saying on popular review sites?
Dissecting the Marketing Strategy
While some marketing efforts are difficult to measure, there are many beneficial details to glean by auditing your competitors’ online presence and brand elements. Additionally, exploring the effectiveness of past and current marketing strategies is a critical component in the framework for competitive analysis. You can avoid costly mistakes as well as find inspiration in the work of your competitors. In addition to auditing their website, many online tools will help you access this information. Ahrefs and Moz are two great SEO platforms.
During an online audit, answer the following questions:
- What core message are they communicating?
- What kind of traffic does it receive and from which regions?
- What keywords do they use in their content marketing?
- How often do they send emails? (sign up for their email list)
- Where are they present on social media?
- How many followers do they have?
- What post attracted the most viral attention?
- What are the key objectives of their digital marketing strategy?
- What recent press releases garnered the most attention?
What other activities and initiatives are they executing:
- What trade shows do they attend?
- Do they have speakers at symposiums and conferences?
- Is their branding and identity consistent across all their properties (offline and online)?
- What do their voice and tone sound like?
- Do they employ brand ambassadors or influencers?
Putting the Analysis to Work
You’ve done the work to research, categorize, and present this information. Now what? The intention is not to replicate what the top performers in the industry are doing. Instead, it is to discover where you fit in the market and how you can provide the best service in your industry. When you have a clear picture of your rankings, you can prioritize your goals and strategize your upcoming quarter, year, or product launch.
We’re Here to Help
If you are inspired to learn more about how we developed our framework for competitive analysis, we’d love to hear from you. Our goal at Wide Narrow is to streamline your analysis efforts. We do this by creating customized reporting solutions that allow your organization to make informed decisions with only the most essential information. Contact us today to get started and click here for your free download.