How to Do a Competitor Analysis: Complete Guide 

Competitor analysis is a methodical examination of your category to see where your company stands. It involves a deep exploration of businesses operating in the same market segment, with the intention of maintaining or acquiring more market share. And there’s a definite art to it – which we’ll reveal below!

importance of competitive intelligence for brand strategy

A comprehensive competitor analysis looks at the competition in terms of products, features, prices, technology, marketing, and other details that may give competitors an edge over your business. Doing a competitor analysis helps your brand understand how it compares to its peers: pinpointing strengths, weaknesses, opportunities, and threats (SWOT analysis).

That said, competitor analysis can be a difficult task, more so for businesses doing it for the first time. Some of the crucial data is hard to find – and if you don’t know where to look, the task can be altogether impossible. This is why we have prepared this guide to break down the process of how to do a competitor analysis step by step. Let’s dive in!

The Steps: How to Do a Competitor Analysis 

Competitor analysis is easier and more effective if you know the sequence of steps and how each one adds to the goal you’re trying to accomplish. So, let’s take a closer look at the process.

1. Determine your competitors and their products

The very first step is to determine who your competitors are and how their products compare to yours. It is not enough to just look around your neighborhood to see which shops are open. Thanks to globalization, your competitors now come from across the sea.

At the same time, it is easy to determine your competition by performing a quick search of organizations winning mentions in your product category, as we can see for the “organic food” topic below:

organic-food-conversations

How you think about your competitors makes a difference too. There are two kinds of competitors, both of which you should seriously consider: Direct and indirect competitors.

  • Direct competitors are those that solve the same customer problem with a similar product to yours.
  • Indirect competitors either; a) serve the same customer need but offer a different solution, or b) use a similar solution to solve the same customer need but outside your market or vertical.

For direct competitors, it is clear to see why it is important to do a deep dive into their business. For the first type of indirect competitor, they are not a major threat, as far as they are offering a different solution. In this case, you have your customer and they have theirs – maybe there are two distinct segments of the market with each preferring a different solution.

However, as they are serving the same customer need, it is not unlikely that they may also serve the same customer – or that you may want to pivot into a new market yourself. A proper analysis of their product and their consumers’ interests can help you understand why some customers prefer it.

organic-food-consumer-interests

The least amount of threat, though, comes from the second type of indirect competitor.

Strictly speaking, this is not your competitor. Still, depending on how they are doing in their market, there may be something to learn from their business process that you can use in your own market. And it’s always important to monitor adjacencies, as you never know when overlap can occur!

2. Research your competitors’ tactics

Your competitors’ tactics and methods can reveal a lot about their strategy. To clarify, by strategy we mean the plan of action that every business sets – and bases its decisions on, over a period of time. This is very hard to find out, as it is closely guarded. You wouldn’t want your business strategy out there either! But tactics are hard to mask – these are actions that the business has already taken in support of its strategy. And they reveal a lot.

This information is readily available through existing customers, marketing, and on their virtual channels or physical premises. All you have to do is follow the right avenues: Ask their customers; watch their marketing messages; go to their website; and visit their shops. It may be helpful to use data mining tools to find some of the information that’s available online, but is too difficult to find manually.

Tactics include actions like lowering prices to attract more customers; up-selling to earn more revenue per customer; improving their customer service to boost customer sentiment; having a loyalty program for customer retention; shifting their focus to a specific demographic; and changing their business model to be more sustainable.

Observing these tactics makes you ask why – why are they doing these things? Careful analysis can reveal the reasons behind the tactics. It can also show you what the results have been.

Ultimately, you will be able to derive insights that will help you improve your own standing in the market since, as demonstrated in Step I, you are all serving the same customer

3. Research your competitors’ prices & consumers’ response to them

As hinted above, pricing can have a great influence on customers’ buying decisions and your competitors know this. Research shows that more than 80% of buyers are going to great lengths to find the best bargains. In fact, competitive pricing analysis exists for this – discovering what competitors are charging and using that to set your own prices.

Brands collect and analyze various market data, compare themselves against the competition, and offer optimal prices to attract the majority of buyers that are hunting for their services. So, your competitors are probably already researching the prices you offer. But what they’re likely not paying attention to is the consumer response to pricing – and this is more important than the pricing itself

But first, to sort out what your competitors are charging, their website is a great place to start. A large number of businesses publish their prices on the product page for the benefit of the customer – but an equally large number do not! Either way, your next step should involve analyzing review sites – and this is where data analysis comes in.

Scrape meaningful metrics and review intel and upload it into NetBase Quid® to examine where consumers are saying about your value prop and if your services are worth the price tag. Over-pricing your widgets is bad, but underselling can be fatal in a crowded market.

And finally, look at analyst reports published online, especially those that are specific to pricing analysis by industry. This will give you a good sense of where your service lives in the pricing range, even without sharing specifics.

importance of competitive intelligence for brand strategy

4. Analyze your competitors’ marketing strategy

To know the brand health of a competitor is to know their strengths and weaknesses, which helps you improve your own strategy. Finding out what your competitor’s marketing strategy is starts with identifying their core business strategy. Remember, you can only figure out strategy from the activities of the business. So, what are they about? This will help you understand their core business strategy.

One way to find out is by exploring their online properties (website, social media) to see how they describe themselves. This is how they want to be seen and chances are that their marketing strategy has a special focus on creating this image in the minds of consumers. Beyond how they talk about themselves, find out what their customers say about them. See what their satisfied customers say and also how the dissatisfied customers describe their experiences. You can find this data on social media, review sites, and the competitor’s website. Compare it against how consumers talk about you!

competitive-analysis-example

Next look at their content marketing strategy. The kind of content they produce can shed more light into their target customer. Some businesses are heavy on written content, others are more visual, and some run podcasts. Many will mix different types of content owing to the mixed nature of their customer preferences. Don’t skim over this content simply noting the format, but actually consume it yourself. Otherwise, you might miss out on the chance to see how they represent themselves to the consumers.

Your competitors’ social media presence can also help predict how well their marketing is doing. Through social listening, you can discover information about their activity on social media including how frequently they post, their brand voice, and customer service.

In connection to this, look at their engagement. This will help you understand how closely connected with their customers they are. Examine their follower count and compare that to the number of users reacting to their content. Go deeper to find the contents of the comments posted by consumers and measure the reactions of the brands to those comments. Do they respond in time? Do they respond at all? How do they handle criticism and what is their response to detractors? You want to understand the personality of this competing brand – its interaction with consumers is a big tell.

And you can create a head-to-head analysis comparing your efforts against theirs on Instagram, TikTok, Facebook and Twitter:

head-to-head-analyses-rival-iq

Last but not the least, analyze their advertising, including social media and search engine ads. The messaging in the ads adds to their profile. Do they have PPC ads? How is their SEO? Their current search engine ranking across specific keywords can help you gauge their marketing efforts.

When compared with their rank history, it can reveal their attitude towards this form of advertising. If, for instance, rank history shows that they have steadily moved from page 3 of Google to the top three results over the past two years you can be sure they take it very seriously.

All these factors go to painting a picture of their marketing strategy.

With this information, you know not just what they are intending to do but also the steps they are taking to get there as well as the fruits of their efforts.

6. Compare the technology used by competitors

Technology can make a big difference in how businesses compete. Whether it’s the technology used in production, in marketing, in service delivery, or any other business process, it is a crucial element in today’s environment. Your competitor analysis won’t be complete until you examine the kind of technology used by your competitors.

Well, you’re not simply going to call their CTO and ask for a list of technologies used by your competitor. Nevertheless, there are ways to find out some, if not all, of the tools used by the business. A key characteristic of technology tools is that they usually leave footprints that can be tracked and followed. In fact, there is an entire sector built around detecting and monitoring tech tools on the internet.

Using specially developed applications, you can quickly detect the technology used on your competitors’ websites. This information should at least give you some insight into customer service, purchase process, ecommerce retail, and marketing. For many brands, these aspects of business are closely linked to the website. Thus, if you know what technology is being used on a particular website, you can determine the effectiveness of, say, the purchase process. For instance, if your competitor is using a specific technology, you can probably surmise their priorities and whether or not they’re doing a very good job of it depending on that stature of the tool in the market. The same goes for competitors that are not using certain technologies – you know they definitely have some blind spot

Compare what you find out to your own tools. Do they match up

7. Conduct a SWOT analysis

The crowning step is to conduct a SWOT analysis. Using all that you have found out about your competitors, it is time to have a unified look at how you are doing in the market. Begin by defining the objective of your analysis. Let’s say you want to decide whether you need to change your business model. You may also want to introduce a new commodity or category to help you compete better. Using all the information you have gathered on your competitors, a SWOT analysis can help you reach a sound decision.

At this stage, you should be able to enumerate your brand’s strengths. You have analyzed various aspects of your many competitors and you are certain of the areas where you come out on top. More than that, you know which of your competitors you have beaten and which ones are ahead of you based on particular offerings. You can even develop a form of ranking where you list strengths and rank yourself against your competition. And as with strengths, so with weaknesses. The ranking by strengths and weaknesses will help you determine your current position in the market. A crosstab analysis offers a handy visualization of precisely this:

crosstab-dashboard-image

Additionally, you should have identified potential opportunities for your business. Some of these may be unforeseen partnerships, diversifying your product offerings, or serving underserved markets. Your analysis will guide you. Analysis will also reveal potential threats. For instance, competition may be stiffer than you thought or higher interest rates may make it harder to compete at the level of prices set by your more established competitors.

After completing your SWOT analysis, develop a strategy of how you will respond to the findings. How will you use strengths and opportunities? Which weaknesses can you address right away and how will you respond to the identified threats?

Competitor analysis can be an uphill task if you don’t have the right tools. NetBase Quid® scours the internet to find those crucial data links that your team cannot capture rapidly and accurately – and both metrics matter. Beyond that, it works with other tools and, using the Intelligence Connector, brings together all the information in one place for easy analysis and distribution. If you’d like to see how NetBase Quid® can help improve your competitor analysis a hundred-fold, reach out for demo today!

importance of competitive intelligence for brand strategy

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