Competitive analysis is a major part of any comprehensive market analysis. It allows you to gather information about your competitors, assess their strengths and weaknesses and helps you build strategies to improve your competitive advantage.
In a competitive analysis, there are many areas to look at and examine. In this list, we have covered how to do a competitive analysis using several competitive analysis techniques that you can use during each phase of your competitor research and competitive analysis.
What is a Competitive Analysis?
A Competitive analysis is a central part of a marketing plan. Information gathered from a competitive analysis helps you identify what makes your product or service unique from that of your competitors. Using that data you can develop strategies to attract your target market.
How to Do a Competitive Analysis with Visual Techniques
A competitive analysis depends on competitor information about several areas. You can use the following competitor analysis techniques to gather and analyze the different types of data.
Identifying and Categorizing Top Competitors
Before you start comparing your product to those out there, you need to know who you are competing with. There are several methods you can use to research and identify your competitors.
- Search on Google, Bing etc. for your product name, product idea or related keywords
- Search on social media channels and online communities
- Ask your colleagues or other experts in the field
- Ask from your potential customers via emails, surveys etc.
Categorize Your Top Competitors Using a Mind Map
Once your research is done, you may have a pretty long list of the names of direct, indirect, potential etc. competitors.
It’s important to categorize them, so you know which competitors to prioritize. A simple mind map like the one below can help you with that.
You can also categorize them as primary competitors, secondary competitors and tertiary competitors on the mind map.
You can further expand the mind map to include their location, website URLs (click the relevant shape and add link) and other necessary information as well.
Analyzing Competitive Landscape
Next step is to analyze the competitive landscape. Here you should focus on understanding the strengths and weaknesses or your competitors and threats and opportunities in the industry and find opportunities for growth.
SWOT stands for Strengths, Weaknesses, Opportunities, and Threats. Use it first to analyze your own product.
Look into what your strengths and weaknesses are. These are your product’s positive attributes like resources, unique product features etc. and negative attributes like inefficient processes, lack of resources etc. These are within your control.
Opportunities are the technological advancement, growing market demand etc. And threats could be negative economic and political change. These are external and therefore are out of your control.
You can do a SWOT analysis for your competitors as well to learn how they are surviving in the market.
The PEST analysis looks at external factors that affect a product or service. Namely, they are Political factors, Economic factors, Social factors, and Technological factors.
By gathering this information you can determine how your competitors will behave in the face of changes occurring in these areas. You can alter or develop your strategies accordingly.
PESTLE is the extended version of PEST, as it takes Legal and Environmental factors into consideration as well.
Porter’s Five Forces Analysis
Porter’s five forces analysis examines the environment in which a product operates. It helps to understand the level of competitive intensity in the industry. It primarily examines five factors in the industry
- Entry/Exit Barriers
By examining these factors you can determine the profitability and the attractiveness of an industry. Refer to our List of Marketing Strategy Planning Tools to learn how to use Porter’s five forces analysis along with 13 other tools to plan your marketing strategy.
Analyzing Competitors’ Market Positioning
This is where you try to evaluate the ability of your competitors to influence the perception of their consumers (who also belong in your target audience). In other words, here you’ll be looking at how your customers perceive the products of your competitors as well as that of yours.
Value Proposition Canvas
Value proposition canvas is a tool used to develop products that match the needs of customers. It is made up of the customer profile and value proposition of the business.
Customer profile consists of
- Gains: the gains the customers expect and wish to attain
- Pains: the negative experiences the customer has to go through when doing their job
- Customer jobs: the tasks the customers are trying to perform or the problems they are trying to solve
Value map consists of
- Gain creators: how the product offers added value to the customer
- Reliever: how the product can relive the pain of the customer
- Products and services: the products and services that create gain and relieve the pain of the customer
Value proposition canvases based on your competitors will help you figure out how they are offering value to their customers.
Refer to our Guide on Launching a New Product to learn how to use the value proposition canvas step-by-step.
The perceptual map helps you identify where your competitors are positioned in relation to your product’s position. It helps you understand what the average target market consumer thinks of your product and those of your competitors.
How to do it
Step 1: Select two determinant attributes you want to compare your competitors against. These determinants are the attributes consumers depend on to make decisions. For example, it could be the quality of the product and the price of it.
Step 2: Gather your list of competitors in the product category. From the mind map of competitors, you created earlier, pick 5 to 10 players in the first category.
Step 3: Based on a 1 to 5 rating scale, give scores to each selected competitor using the two determinant attributes.
Step 4: Using the grid, assign a place for each competitor. This will help you get a quick overview of where each and every competitor stand compared to one another.
Conducting Competitive Intelligence Analysis
Competitive intelligence analysis is the process of gathering and examining data on competitors, their products and customers, and target markets.
The synthesized data you generate through the analysis can be used by internal sales and marketing teams to make better decisions and develop strategies.
How to do it
Step 1: Conduct research to gather data on your competitors. You can rely on resources like the customers, websites, social media, analyst reports, press releases, demo videos etc. to find information on your competitors, their customers etc.
Step 2: Use a mind map like the one below to organize and categorize data you’ve gathered
Step 3: Sort through and analyze all the data and create a competitor profile that covers aspects such as products, market, sales, partners, etc.
Step 4: You can use a competitor profile like the one below to organize information and save them for later use and share it with your internal teams that need to come up with strategies to counter your competitors.
Comparing Competitor Products and Prices
When developing new product features or outlining your pricing strategy, you need to take into consideration your competitors and how they have managed to deliver to their customers so far.
A radar chart is a tool that you can use to compare the products of your competitors based on different characteristics. It will help you identify which competitors are scoring high or low within the characteristics you’ve selected.
Step 1: Select the competitors you want to compare and assign them an axis that starts from the center.
Step 2: You can either select one characteristic and compare several competitors to evaluate their performance, or you can take one competitor and evaluate how they score under several characteristics.
Compare and Contrast Charts
Compare and contrast charts are a great visual tool to compare products. It will offer a quick overview of the capabilities of competitor products and that of yours when you are planning strategies or new developments.
Whether you want to compare product features, prices, or characteristics of competitor marketing strategies, compare and contrast charts are a great way to organize and analyze information.
Competitor Price Analysis
With a chart like the one below, you can rate your competitors based on their strength and whether increasing or reducing your product price is too costly or profitable for you.
How to do it
Step 1: Research and gather price information of your top competitors
Step 2: Figure out whether reducing or increasing your product’s price to gain a competitive advantage over your competitors would cost you too much or help your make profit
Step 3: Use the grid below to visualize your findings and find which price reaction you should take in order to make a profit.
Read this article to learn how to use a standard competitive price response analysis in detail.
What are Your Thoughts on How to Do a Competitive Analysis?
In this list, we’ve covered visual techniques that you can use to research competitors, analyze competitive landscape and competitors’ market position and more.
These visual competitor analysis tools help you organize the data you collect and make effective decisions about how you should position and market your product or service.
Have you got any other competitive analysis techniques to add to the list? Leave your thoughts in the comment section below.