Competition analysis is both a process and an invaluable tool for getting the insights needed to make your business stand out in a crowded market. Consider it a key step to success in the business world is knowing your competition in detail.
Having a detailed birds-eye of the competition is a must for any start-up founder and business owner. A good competition analysis can show market trends, give you a peek into competitors’ game plans, and point out where they’re missing the mark.
But doing a full-on competitive analysis can be a tough task, especially if you don’t know where to start.
That’s why we prepared this article. We will walk you through the steps to do a competitor analysis. You’ll be able to figure out who your competitors are and break down what they offer. You’ll also be able to dissect their marketing and sales strategies and evaluate their strengths and weaknesses, and understand their business model .
After you go through these steps, you’ll be ready to use them to develop an actionable game plan to grow your business and keep you miles ahead of the competition.
Identify Your Competitors
Knowing who you’re up against in the battle for market dominance is crucial. Your competition extends beyond businesses offering identical products or services and includes any company that might steal your customers.
Analyze direct competitors (those offering similar products/services), indirect competitors (those with slightly different products/services), and potential ones (businesses that could potentially penetrate your market).
Analyze What They Offer
Now that you’ve got a clear picture of your competitors, it’s time to evaluate their offerings. What promises are they making to their customers? What needs do they fulfill? Do they offer something that separates them from the rest of the pack?
By answering these questions, you can gain insights into how your value proposition compares against those of your competitors.
Dissect Their Marketing and Sales Strategies
Next, focus on your competitor’s marketing and sales game plans. Evaluate their marketing channels, customer engagement techniques, pricing models, and sales funnels. Are they acing their content marketing strategy? Do they seem to have a strong grasp of social media engagement?
Or perhaps there are weaknesses in their sales funnel that they’ve overlooked? Every strategy they apply, successful or not, offers valuable insights for your business.
Examine Competitor’s Online Presence
A competitor’s online presence can provide a treasure trove of information. Dig into their SEO strategies, online traffic sources, social media engagement, and online advertising strategies. This in-depth analysis can give you a better picture of their digital marketing strategies and performance and expose weaknesses you can exploit.
Capitalize on Their Strengths and Weaknesses
With all these valuable insights, it’s time to analyze your competitors’ strengths and weaknesses. Hint: It’s not about looking for faults; it’s about identifying areas where your competitors shine and areas where they struggle.
This step is pivotal to understanding how the market views your competitors and tweaking your business strategy accordingly, which takes us to the next crucial step.
Develop Your Competitive Strategy
Competitive analysis is not just about gathering data; it’s about using this data to make strategic decisions. Use the insights you’ve gained to revisit and refine your value proposition or pitch deck, modify your marketing strategy, and improve your product/service offerings. That way, you can fill any gaps in the market that your competitors have overlooked and position your business as the top choice for your target customers.
And if you need help creating a bulletproof financial and business plan, check how Modeliks can help. Competitor analysis is often required in formal Business plans and investor-ready pitch decks. Check our Ultimate guide: How to create an investor-ready pitch deck
Keep It Up
Competitive analysis isn’t a one-time task. It’s a never-ending process that must be part of your business strategy. Your competitors’ strategies evolve, the same as your customer preferences. So make sure you update your analysis and regularly review and revise your strategies to maintain your competitive edge.
After going through these steps, you’ll be more knowledgeable about your competitors. More importantly, you’ll be better equipped to make informed and smart business decisions that will help your business stand out.
Remember, a competitor analysis is a crucial part of your business strategy and growth. So, understand your competition, see what they do best (and where they fail), adapt, and always strive to offer the most value to your customers.
