A competitive analysis is a systematic process of evaluating competitors to understand their strategies, strengths, and weaknesses. This analysis helps businesses identify market gaps, opportunities, and potential threats, allowing for informed strategic decisions and a competitive advantage. The process is essential for startups, established businesses, and consultants alike, providing the tools needed to improve strategies and achieve market success.
A competitive analysis template serves as a structured framework or blueprint for dissecting and understanding the competitive landscape. It guides the process of evaluating competitors, their strategies, and their performance in the market. These templates act as toolkits for collecting and organizing vital data about rivals, enabling the drawing of meaningful insights. Using a template simplifies the process, offering structured formats to gather and analyze data, which gives businesses a competitive edge.
Various types of competitive analysis exist, each looking at a different angle of the market and pulling in its own set of data. These can include direct versus indirect competitor analysis, product-focused analysis, and market share analysis. The choice of analysis type depends on what a business is trying to uncover.
A competitive analysis report typically outlines the strengths and weaknesses of competitors compared to those of your own business. Such a report generally contains several key components: a description of the business’s target market; details about the features of a product compared to competitors’ products; a breakdown of current and projected market share, sales, and revenues; comparisons of pricing models; an analysis of marketing strategy and social media strategy; and a description of customer ratings of the features of each competitor. For accurate assessments, companies often turn to a competitive analysis to ensure they have updated and specific information on their competitors, which in turn helps develop better strategies.
Creating a competitive analysis report requires extensive market research to gather information to understand customers, identify opportunities for growth, and recognise industry trends. This research can help assemble customer personas to guide business and marketing decisions and plan for potential market shifts. Market research can be conducted in two primary ways: primary and secondary.
Primary market research involves direct interaction to gather new data. Methods include customer interviews, online surveys or questionnaires, in-person focus groups, and purchasing a competitor product to study its packaging and delivery experience. Secondary market research involves analysing existing data. This can be done by reading company records, examining current economic conditions, and researching relevant technological developments.
When assembling market research, a business may provide a high-level summary of industry trends or dive into detail on the demographics of a particular consumer segment. For consultants or advisors seeking buy-in from skeptical stakeholders, a comprehensive report covering market forecasts and consumer profiles can be ideal for getting clients and decision-makers on board.
Specific templates are available to guide different aspects of a competitive analysis. These templates provide structured formats for different analytical focuses.
A SWOT Analysis Template offers a comprehensive overview of competitors, including their strengths, weaknesses, opportunities, and threats. This is useful for gaining a broad view of the competitive landscape.
A Competitive Landscape Analysis Template helps visualise the competitive landscape with a focus on market share, positioning, and key players. This template is used to understand where a business stands in relation to competitors, and the X and Y axes can be changed as deemed fit.
A Competitor Pricing Analysis Template analyses the pricing strategies of competitors, helping to determine a business's own pricing approach. It can be used to adjust pricing strategy or assess price competitiveness.
A Competitor Profile Template creates detailed profiles of competitors, including company information, product details, and market presence. When documenting competitors, it is useful to track basics such as the name of the business, location, mission statement, product offering, messaging, pricing, target customers, and competitor’s products.
When analysing each competitor’s products or services, it is important to examine the customer experience on their website, content marketing, social media, and digital footprint. Specific aspects to consider include the quality of product photography and copywriting, how offerings are displayed and value is communicated, the placement and visibility of calls to action on the website, and response times to emails, live chat, and contact form submissions.
Further analytical points include the competitor's market share, the information included in their marketing banners and callouts, the frequency and benefits of their promotions, the number of social media followers and audience engagement rate, and the number of employees and the tasks they perform.
Numerous free competitive analysis templates are available, often accompanied by example data to help users get started. These templates can be used to edit and share with marketing teams. Some platforms allow for collaboration, where teams can be added to work together or a link can be shared for joint analysis. Users can often click and start editing without needing an account or credit card. The templates are customisable to match brand guidelines, including brand fonts and colours, and some tools even allow pulling colours directly from a website for easy branding.
Collaboration features often work on the cloud, allowing colleagues or clients to be added to work on the analysis together, with changes automatically saving and syncing across all devices. Sharing options are versatile, including sharing a link, presenting a slideshow, embedding the analysis, or downloading it as a PDF or PNG. This eliminates the need to jump between different tools to create various deliverables. Templates can also be reused and repurposed; users can save their own competitive analysis templates or copy and merge them into other documents, allowing for the design, management, and sharing of beautiful living documents easily and together.
For startups breaking into the marketplace, consultants trying to get results for a client, or established companies looking to cement their foothold against the competition, a well-researched competitive analysis provides the necessary tools for strategic decisions. The competitive analysis process, supported by these structured templates, is a critical component for any business aiming to succeed in a dog-eat-dog world, ensuring they stay on top by knowing what the competition is up to.