What is competitive analysis and how do you conduct one?
In order to understand whether your startup has a good chance of succeeding, you need to conduct a competitive analysis. But how do you go about it? And what are the key questions that you should ask?
I’ve been trying to answer these questions for the past few months, and my results have led me to some interesting conclusions about what’s really involved in a competitive analysis. I’m going to share those findings with you here today so that we can all assess our startups against each other more effectively.
A competitive analysis (also called a SWOT or “strengths-weaknesses-opportunities-threats” analysis) is just as it sounds: It’s an attempt by your startup team to understand how its main competitors compare on certain keys.
This article will help you answer these questions and will also teach you some important skills like developing hypotheses and using data to measure performance.
What is a competitive market analysis?
Competitive market analysis is the study of how a product or service will be impacted when introduced into a competitive environment. This may include examining possible pricing and marketing strategies, as well as evaluating the anticipated profit for each alternative choice.
A competitive market analysis is used to help you decide on what to do with your startup. This will include determining whether new products, services, or pricing strategies are worth pursuing, and if so, how much money you plan on spending in order for the project (be it a product launch or a marketing campaign) to succeed.
You may also want to conduct a competitive market analysis if you plan on expanding your business by looking into whether the new products or services will have an impact, as well as how much money you’ll need in order for them to succeed. Who should conduct a competitive market analysis?
A competitive market analysis is an important part of any business plan or marketing strategy, and it’s something that everyone in the startup world must be aware of. So who should perform this task? There are several people you can hire to help with your research: one way would be by contacting consultants and asking them for assistance. However, if time is not on your side, then getting professional help may very well prove beneficial to you as they will have specific skills which allow them to focus solely on the tasks at hand.
How to do a competitive analysis?
1. Determine your competitors.
This is the first step of your competitive analysis. It will help you determine how well your products or services compare to those that are already on the market and which ones are doing better than others in their field.
Since the market is always changing, you’ll want to look for new competitors as well, in case you decide that your product isn’t profitable enough and need a more attractive alternative.
For example, if you’re trying to determine whether or not a new product is worth developing and launching, you will want to find out how well it compares with the competitive products that already exist in your industry. You may also want to include key competitors within your own company (if they are selling similar products/services).
2. Determine what products your competitors offer.
The competitive analysis for a company helps the company determine what it should do with its product or service. For example, if a company is considering launching a new product/service, then they would go through the process of determining whether there is potential in that market or not.
The competitor’s analysis will be used to help answer this question and lay out the steps that need to happen for that product launch to succeed.
You will want to determine exactly what your competitors are selling and how similar they are to you. This is the first step in determining whether or not launching a new product/service within an industry is worth it at all.
If there isn’t anything that’s close enough for you to compete with (aside from perhaps your own company), then it may be better off if you simply stick with improving upon existing products & services instead of developing something completely new altogether.
3. Take note of your competition’s content strategy.
The content strategy of your competition is to create engaging and memorable experiences that resonate with their target audience. For example, if the company is in charge of advertising a new mobile phone, they can do so by creating an advertisement that makes people curious about their product and wants to purchase it.
They should also analyze how your competitors are engaging with the customers via social media platforms such as Facebook or Twitter. Content strategy includes choosing features to add or remove from the website, adjusting the content frequency in order to be relevant and engaging, prioritizing advertising opportunities like PPC advertising based on revenue potential, etc.
In light of this information, it is clear that your competitors are doing a good job at developing a compelling and impactful user experience for current visitors.
Hence, it is important to consider what they are doing in order to come up with a better strategy.
4. Research your competitors’ sales tactics and results.
The company could choose to develop a new strategy or tweak an existing one to be more successful. For example, if the company is seeing low sales within their industry and they want to increase those numbers, they can use these tactics. A company may be thinking about launching a new product/service into its industry.
They would want to determine exactly how well the products that are out there currently are doing in terms of sales and profit, along with other information such as market share or competition within the industry.
This is one of many ways you can use competitive analysis to your advantage; it will help you figure out what changes need to happen if you’re looking at trying something new within an existing market.
Competitive analysis is also important because it helps determine how much success the competitor has already achieved in regards to their market share and revenue. The competitor’s analysis will give the company an idea of what they need to do in order to increase their sales.
5. Your competitors’ pricing.
You should be able to determine the actual costs associated with their products or services and also how much they are charging for them. For example, if the company is selling a product for $100 and they are charging their customers an average of $110, then you need to determine whether that price point will be profitable or not.
This can also give you insight into how much profit your competitor is making on each sale as well. If your competitor’s pricing strategy isn’t working out, then it may be best to change them in order to increase sales and revenue generation within the marketplace where they operate with their products & services.
A company may want to increase its prices or lower them depending on how successful the products are doing and if they need an extra helping hand. Companies must Competitor analysis will help you learn what different prices people are paying across various industries when purchasing similar products/services.
6. Ensure you’re meeting competitive shipping costs – sales and marketing.
Competitor analysis can be used to find out what shipping methods are being implemented by the competitor. If your company is not able to produce products/services at a quicker pace than your competitors, it will be difficult for you if you want people to buy from you rather than them. Another point of concern would be how much more cash flow they have when compared against the amount of money spent on their shipping services.
The company will want to find out what shipping costs the competitor is paying in order to assess whether they are competitive or not. By doing this research, it could determine whether or not the business should take action in order for its customers to get faster delivery times as opposed to waiting months until the product is delivered.
In order to increase the speed of delivery and decrease costs, there are various companies that use various methods in order for their products/services to be shipped at a faster pace without making any sacrifices on price as well.
7. Analyze how your competitors market their products.
The company should decide how to market its product before it can figure out what its competition is doing. Competition is what drives the market and how companies are responding to it. This can be done through asking customers, competitors, or even conducting a survey of your own employees.
Competitive analysis will help you figure out what type of marketing techniques that certain businesses have been using in order for their product/services to sell while others have found success with very little advertising at all!
By determining which methods work best against other similar types of products and services, will allow them to see whether or not being different from the competition may give them more sales than if they were trying something else entirely. Companies should also know that they are not the only ones selling their products.
A study found out that US businesses have an average of 14 competitors in terms of sales and market share price, while Europe has 18 or 19 companies on the same plateau! This means even if a company does something new, it is possible for other businesses to do exactly what you did.
8. Learn what technology stack your competitors’ use to do a competitive analysis.
The process of competitive analysis begins with identifying the competitors of your business.
The most accurate way to identify these competitors is through an open-source software called Open Site Explorer (OSE) that helps in comparing how a website ranks against other websites on a number of different factors, including key metrics like Alexa rank, Google Top 100 Rank, and Quantcast Rank. With this software, it is possible to see what technology stacks are used by any given website.
The company should do additional research before determining which technology stack to use for their own website so that the site can be as effective as possible. In this case, the company should look for tools that can help them determine how to use and implement their chosen stack.
Competitive product analysis.
Competitive product analysis is a process that focuses on analyzing the strengths and weaknesses of your competitor’s product. It can be helpful in creating a new strategy to beat the competition.
According to the American Marketing Association, there are five aspects that should be analyzed when performing a competitive product analysis: price, quality, customer service, features, and marketing.
When analyzing the pricing aspect, it is important to know what discounts are offered by your competitor as well as how often their prices fluctuate. The quality aspect is also important because it reveals if your competitor’s product is of high quality.
The customer service aspect involves evaluating if your competitor’s company offers great customer support or not, while the features and marketing elements are important to know because it helps determine whether you believe that your competitors can beat out other companies in terms of their marketing strategy.
Competitive analysis example.
In order to understand the competition, a company must look at what the competitor does well and how that relates to the industry. Competitive analysis is a process of analyzing competitors by looking at their strengths and weaknesses. This process can help create new strategies for beating the competition.
The last year was filled with impressive technology advancements that allowed companies like Amazon to become giants in their respective industries. It is important now more than ever for market leaders like Amazon to stay ahead of the technological curve or risk losing out on profits.
One way that Amazon stays ahead of its competitors is by developing software tools specifically designed to help it gain an edge. These tools can include things like reviewing customer reviews, filtering out irrelevant products, and creating a recommendation list based on the consumer’s past purchases.
This gives Amazon the ability to create custom recommendations for each individual buyer while also providing its customers with better overall shopping experiences.
Competitive analysis is an important part of any business plan. It helps you identify the strengths and weaknesses of your company, allowing you to prepare for a competitive market and adapt to it.
Competitive analysis can be as simple as a checklist that you fill out every time you conduct a new marketing campaign or as complex as a full-blown analysis that involves surveying competitors’ sales tactics, financial information, customer reviews, social media presence, and more.
Whatever level of detail you need to conduct your competitive analysis, we’ve got you covered!