Competitive Analysis: How to Do It and Why It Matters

Today, the business environment is highly competitive. Many companies are penetrating the global marketplace to scout for prospective customers. How do you stay afloat in a dynamic market?

Competitive Analysis: How to Do It and Why It Matters
Competitive Analysis: How to Do It and Why It Matters

Competitive Analysis: How to Do It and Why It Matters

You must be creative to find practical solutions. You can develop an efficient SaaS web design for an excellent user experience. Another practical approach is to conduct a competitive analysis.

Do you know your competitors? The primary objective of a competitor analysis is to know who you are up against in the market. The analysis helps you know the weaknesses and strengths of specific companies compared to your business. Moreover, you will discover ways to improve your business strategy.

Your competitors will always be around. So, you need to refine your marketing approach to stay ahead of the competition.

This article discusses how to conduct a competitive analysis and why it is critical for business growth. But first, let us delve into the importance of the analysis.

Why Competitive Analysis Is Important

You must carry out regular competitor analysis if you want to propel your brand forward. It entails researching your business competitors.

The process allows you to know what they are developing and selling. You will also know their marketing strategies and what makes their customers respond.

Here is an overview of why you need to do a competitor analysis.

  • You will identify your competitors and how they stay in business. Your competitor’s strengths will help you improve your standards.
  • It helps you know your products’ unique value and why you are different from other brands.
  • You will discover practical marketing strategies to penetrate new markets. It will assist you in adopting effective methods.
  • The process reveals the shortcomings of your competitors. It gives you an upper hand in exploring new opportunities.
  • You will find out the missing features and include them in your product. It will cover what your competitor is not offering.
  • It gives you a platform for measuring your brand growth.

Before embarking on the analysis, choose a systematic approach to follow. The first thing is to identify your competitors in the market.

Competitive Analysis: How to Do It and Why It Matters
Competitive Analysis: How to Do It and Why It Matters

Steps for Competitive Analysis

Here is a tried and tested algorithm to produce a thorough and informative analysis of your competitors.

#1 Competitor Identification

When it comes to the analysis, you must first know your competitors in the industry. You will find direct and indirect competitors in the market. Those who are in a similar business line are direct competitors.

While the businesses that might offer similar solutions but on a different business path. Knowing who you are competing against will help you to improve your product.

So, have a list of your competitors close to help you know what you are doing right or wrong. You will be comparing any changes other brands implement to see if they impact your business strategies.

#2 SWOT Analysis

After identifying the direct competitors, you can conduct the SWOT analysis. SWOT is an analysis tool that shows the strengths and weaknesses of your competitors. It also generates the threats involved and the opportunities available.

Some aspects include prices, client experience, marketing approach, shipping, discounts, content, and branding. You can research the strengths of each brand and the areas of expertise.

To get a comprehensive analysis, compare the competitor’s weaknesses to your brand strengths. Identify the gaps and find ways to implement them in your business.

Competitive Analysis: How to Do It and Why It Matters
Competitive Analysis: How to Do It and Why It Matters

#3 Website and Client Experience Evaluation

Most companies strive to give customers an exceptional user experience. It is a crucial factor that drives loyalty and business growth. Many users avoid a company after having a bad experience. So, you need to analyze what the competitors are doing to enhance UX design.

First, make sure you have clear goals in the information you want to gain from the competitors. Whether you need to know about the product, the shipping cost, or promotions, ensure you capture accurate information.

You can develop a research hypothesis using the SWOT analysis. It helps you to know the position of each competitor. Choose appropriate research methods that you will use to evaluate the competitor’s sites and customer experience. It could be surveys, questionnaires, or reviews.

Finally, do the evaluation and summarize your findings to get the market gaps.

#4 Market Position

You have to determine the market position of the competitor company. The product price and the benefit are primary aspects that define the market position.

This approach will help you know where your brand stands among your rivals.

#5 Pricing Policy

If you deal with direct competition, find out how they price their products. It allows you to know if you are undervaluing your services or not. Many consumers pay for quality products and convenience. Or those that offer transparent product tracking.

So, you can factor in such aspects in your business and review your prices. In addition, you can find out how other competitors add value to their pricing policy.

Competitive Analysis: How to Do It and Why It Matters
Competitive Analysis: How to Do It and Why It Matters

#6 Technology Tools

Technology is a crucial driver in enhancing business growth. It enables brands to expand to the global market and attract new prospects. So, you can investigate what other companies are using technologically.

If it is an ecommerce company, find out the innovative tools they incorporate on their site. You can then offer a better customer experience with advanced technologies.

#7 Shipping Rates

Many users abandon online stores at the checkout system because of high shipping rates. Thus, you can analyze what other businesses are charging for shipping. Find out what the logistics providers are providing and review your costs accordingly.

Ensure you adopt a shipping policy that does not chase away prospective consumers.

#8 Review Social Media

What makes the brands influential? Do they pay for sponsored ads or influencers? Social media is an influential marketing tool that impacts brand growth.

So, you can carry out extensive analysis on different competitor brands. Assess their support services, response time, and client engagement.

Keep It Regular

What approach can you use to enhance your brand? Ultimately, evaluating other companies helps you to discover weaknesses. So, ensure you do regular analysis to keep yourself updated on the current marketing strategies.

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