What Is a Competitive Analysis?
September 28, 2021
According to Entrepreneur's encyclopedia, "Identifying your competitors and evaluating their strategies to determine their strengths and weaknesses relative to those of your own product or service" is what is most commonly known as a competitive analysis
includes evaluating and comparing your competitors' products, services, sales, and even marketing strategies to your own in order to identify improvement points.
The following key elements of competitive analysis will help you understand how it can help your business develop winning strategies, products, and services.
Key Elements of a Competitive Analysis
- Identifying the Competition
Sometimes it's not only important to identify someone with a product or service similar to yours; it's important to identify companies that target similar audiences.
In-depth research and analysis of who your competitors are will allow you to see an accurate and comprehensive list of direct and indirect competitors. It's evident that you will probably want to focus your attention on direct competitors, but you should always keep tabs on your indirect competitors too.
Those who might not offer the same product as you but cater to the same audience might, at some point, decide to venture with a product or service like the one you offer, becoming your direct competitors. This is one of the reasons why conducting regular competitive analysis is crucial: the market changes all the time!
- Follow the Money
A competitive analysis should provide you with information on many financial aspects of your competitors' products and services compared to your own. From there, you will be able to evaluate if you are pricing your product or service in a way that feels reasonable to your potential customers and also in a way that is competitive enough to make them consider buying from you instead of your competitors.
However, this element that we decided to call "Follow the Money" goes beyond competitive pricing. It also includes the ethical gathering of any information from primary and secondary research about sales, the ROI from marketing strategies, and any data that may help infer the success or failure of your competitors' strategies. All of this is to help you avoid pitfalls and implement elements of your competitor's successful strategies to your own.
- Are Your Competitors Growing?
Here we are directly concerned with the competitive landscape, market, and your's and your competitors' market share. Are your competitors planning to expand to new markets? Will this threaten your market share? Is any indirect competitor about to launch products or services that will turn them into direct competitors? Careful research and analysis will give you the heads up to prepare and always keep abreast of your competitors.
- Evaluating Your Competitors' Strengths and Weaknesses
Your competitors' weaknesses can be translated into opportunities for your business. Your competitors' strengths can be elements to implement to your offerings to improve your products and services. Overall, both play a role in helping you understand where your company, products, and services stand in the competitive landscape. It will also help you understand which elements of your offering and strategies can be improved upon and which can be played up as differentiators.
Along the way of showing the elements of a competitive analysis, we have slowly been introducing the benefits of conducting regular competitive analysis, and it's now time to outline these benefits more concretely.
Benefits of Conducting a Competitive Analysis
- A competitive analysis will allow you to identify your product's or service's unique value proposition.
- Your future marketing efforts will have a sure footing by working from a detailed report on what makes your products or services different from your competitors.
- A competitive analysis will provide you with critical information to make sure you stay relevant and will help you ensure that your products, services, and your marketing campaigns outperform your competitors'.
- You will find out where your competitors are falling short. This is a valuable piece of information that will allow you to take advantage of their shortcomings, avoid pitfalls, and also develop new, unique marketing strategies they haven't taken advantage of.
- With the information provided by competitive analysis, you will be able to consider adding features to your products or services that are missing from your competitors' offerings. Meet customers' needs that your competitors might have overlooked.
- Based on all the information provided by competitive analysis, you get a clear benchmark from which you can measure your own growth.
After reading all these benefits, we bet that many look familiar, and you might have read about them as benefits of competitive intelligence service engagements. So, if you are wondering what's the difference between competitive intelligence and competitive analysis, it's very simple, and we explain it in the section below.
What's the Difference Between Competitive Analysis and Competitive Intelligence?
Competitive analysis is a subset of competitive intelligence
. That's why many of the benefits listed above are also benefits from competitive intelligence service engagements, and as you can see, the importance of competitive intelligence service engagements
cannot be overstated.
If you need help understanding where you stand in the competitive landscape or need actionable insights to help you design winning strategies to keep abreast of your competitors, please check our services
page. There you will see all that Peak Innovation has to offer to help your company succeed. Whether your firm is a start-up or a Fortune 500, Peak Innovation is here to answer your toughest marketplace questions. Call us at (844) 300-7325
or fill out the form on this website for questions about our services or to schedule a time to speak.