Competitive Analysis Guide: How to Use Competitive Analysis

Competitive analysis (also called competitive research) is the process by which a business evaluates the strategies of its major competitors in order to determine their strengths and weaknesses relative to its own. The goal of performing a competitive analysis is to obtain information that helps you adjust your own business strategy, ideally resulting in a greater competitive advantage and a higher market share. Competitive analysis is a subset of market research. Business owners and marketers living in the age of digital technology have access to more data on competitors than ever before. It's essential that you take advantage of this competitive intelligence to give your business the best chance of success. Conducting a competitor analysis helps you capitalize on industry trends and make informed choices about your pricing strategy and marketing strategy. Competitive analysis also allows you to adjust your messaging to better target customers and potentially reach new customers. You can use competitive analysis to determine your business's advantages and disadvantages within your target market and measure your sales results against industry benchmarks. Follow the below steps to conduct a competitive analysis. Just be aware that businesses evolve over time, so this isn't a one-time-only exercise. Continue monitoring your competitors as your business grows to ensure that you're basing your business strategy on accurate information. 1. __Compile a list of competitors__. You most likely already know most of your top competitors, but a simple internet search for your product or service will turn up additional results. You'll want to divide your list of competitors into two categories: direct competitors and indirect competitors. Direct competitors conduct their business in your same geographic region and have a product offering that's a direct substitute for your own. Indirect competitors offer a different product, but it still solves the same problem or addresses the same need as your product. For example, if you own a coffee company, one of your direct competitors would be another coffee company while an indirect competitor might be an energy drink company. When conducting your competitive analysis, focus only on your direct competitors. Still, make an effort to continue checking in on your indirect competitors over time because an indirect competitor might release a new product that turns them into a direct competitor. 2. __Analyze your competitors’ product lines__. Research all the different products and services that your competitors offer so you can compare them to your own product line. Pay attention to their pricing, distribution method, and how they differentiate their products from your own. 3. __Compare your content marketing strategies__. Go to your competitor's website to see the type of content that they're publishing about their business. Examining the content strategy on their website can help you see where your own marketing efforts are lacking. Examples of marketing content you might find include press releases, case studies, blogs, podcasts, ebooks, and newsletters. Note how often your competitors post, and evaluate the quality of their marketing content. What tone are they going for? Who writes their content? Do they use visuals? Is the language geared towards experts in your field or novices? Adjust your content marketing strategy accordingly to better reach your target audience. 4. __Compare your SEO__. Your content marketing may be as good or better than your competitors, but if you have subpar SEO (search engine optimization) it may be difficult for potential customers to find your content. SEO is crucial for getting eyes on your content, especially if your business has a blog. There are numerous SEO tools out there that you can use to see if your competitors outrank you for various search requests. If you find that you're losing the SEO game to your competitors, examine competitor content that outranks yours, identify flaws, and make yours better. For example, if a competitor article was written several years ago and has outdated information, try to outrank it by writing content with more current, with accurate details and keywords. 5. __Examine your competitors’ social media presence__. When evaluating your competitors’ presence on each platform, look for their number of followers, how often they post, how many followers are engaging with their posts, how they interact with their followers, the tone they use in their posts, and the ratio of original content to curated content. This should give you a clear picture of how effectively your competitors are using their social media profiles. Take note of areas where your competitors excel, and ask yourself what you can learn from them to improve your own social media presence. 6. __Analyze your own business__. You can't see how you stack up against your competition without establishing touchstones for comparison. Through the same metrics you used to analyze your competitors, perform an impartial examination of your own business. Write the results of your business analysis the same way you did for your competitors. Now you can easily identify the areas you can improve, and you have ideas at the ready that you can use to execute those improvements. Become a better communicator with the [MasterClass Annual Membership](https://www.masterclass.com). Spend some time with Daniel Pink, author of four *New York Times* bestsellers that focus on behavioral and social sciences, and learn his tips and tricks for perfecting a sales pitch , hacking your schedule for optimal productivity, and more. To ensure that your business can compete in a crowded marketplace, it's essential to study the performance of your competitors.