What is competitor analysis

To help you generate this list, think of what your customers would buy if they didn't buy your product or service.

Across the top of the paper, list the main features and characteristics of each product or service. Include such things as target market, price, size, method of distribution, and extent of customer service for a product.

For a service, list prospective buyers, where the service is available, price, website, toll-free phone number, and other features that are relevant. A glance at the competition grid will help you see where your product fits in the overall market. There are several markets where it is relatively easy to name every competitor. These are concentrated markets where only a handful of competitors exist. If this is the scenario for your product or service, you will need to develop an analysis for each competitor.

The steel industry and automobile industry are examples of these types of markets. If you are selling in a market with many competitors, your job of analyzing the competition becomes a little more difficult. For instance, in the computer industry, the personal computer market, is represented by hundreds of clone manufacturers with the majority of the market being captured by a handful of manufacturers such as Compaq, IBM, and Apple.

When using this approach it is important to keep abreast of your market for new and upcoming players who through some variable, whether it be new technology or an aggressive advertising campaign, may become a dominant player. Marketers of different brands of products will often pursue a particular market segment. Market Segmentation, which is the means of breaking down larger markets into smaller ones requiring different marketing mixes, is a means for strengthening and focusing your attempt to limit and control the competition.

There are however, a broad range of strategies a business can employ in a competitive environment — from price changing and new packaging to improving customer service and new product development. While a marketing research firm can save you time and legwork, it can be quite expensive and simply not a possibility for new and growing businesses.

Much of the information you need in order to profile your competitors is readily available to all business owners. As your business grows and expands, you should consider supplementing your own research efforts with some formal research conducted for you by an outside firm. Before you begin seeking out the sources listed below, keep in mind that you need to obtain answers to the following questions: Who are my top three competitors?

On what basis am I able to compete? What is the range of products and services they offer? Are their products or services aimed at satisfying similar target markets? Are my competitors profitable? Are they expanding? Scaling down? How long have they been in business? What are their positive attributes in the eyes of customers? What are their negative attributes in the eyes of customers? How do current customers view us compared to the competition?

How can I distinguish my company from my competitors? Do they have a competitive advantage; if so, what is it? What is their marketing strategy? What is their promotional strategy? What are their pricing structures?

Do they operate in the same geographic area? Have there been any changes in their targeted market segments?

What is their size? What is their percentage of market share? What is their total sales volume? What is their growth rate? How do they rate on: customer service? How do current customers rate the following features of your business compared to your competition. Rate the following as: fair, good or excellent.

Secondary sources include information developed for a specific purpose but subsequently made available for public access and thus alternative uses.

For example, books are secondary sources of information as are articles published in journals. Marketing reports offered for sale to the general public also are considered secondary sources. Although, they have been created for a purpose other than your current need, they are still excellent sources of information and data. With the ever increasing speed of document identification and retrieval through electronic means, secondary sources are not only an inexpensive source of information but are readily available soon after publication.

Sources of information include: Advertising Not only does advertising copy tell you a competitor's price and other product information, it provides an indication of your competitor's entire promotional program and budget. When reading a competitor's advertisement be sure to note the following: publication, frequency, special offers, product features and benefits highlighted. If your competitor suddenly places an advertisement in an industry publication that neither of you are currently selling to, it's an indication that they're trying to reach a new market segment.

It's also important to notice the design and tone of your competitor's advertisements. What kind of image do they convey? How does your own image compare? Are their advertisements in color while your own are black-and-white?

Even if they're not, a clever advertising campaign can communicate that your competitor is an innovative, fresh company. Sales Brochures Sales brochures provide a wealth of product information. You can learn how your competitor is positioning their product and company and what features and benefits they're using to sell their product. Try to obtain all new sales brochures and literature your competitor publishes. Significant changes in the content will indicate that new strategies are being employed.

Newspaper and Magazine Articles Articles in newspapers and magazines are a source of information you can use to get an idea of what your competitor is planning for the future, how their organization is run, and what new product information or innovations they have. Journalists may also uncover and reveal unflattering information about your competitor that may prove valuable to you.

Be on the lookout for product reviews in magazines; they will reveal a competing product's strengths and weaknesses. Visit a college or public library. The reference librarian will show you how to find pertinent articles online much more quickly and easily than you'll find them by browsing. Reference Books and Databases The publications listed in this section are available at most public and college libraries that have business resources.

Ask a librarian to help you find them, as many are likely to be online and not listed in the library catalog. State agency publications such as industry directories, and statistics on local industry employment, production, and equipment capabilities.

Data can be selected alphabetically, geographically, by line of business, and officers and directors. Ward's Business Directory of U. Private and Public Companies annual , provides profiles of over , companies small and mid-size companies as well as large corporations, most privately held across the U. Profiles include assets, gross earnings, revenues, and other pertinent information.

Online versions of these products not only make their pertinent statistics easy to find. They often permit you to download data so you can combine it with other data to produce your own statistics. Annual Reports If your competitor is a publicly-held company, many of its reports to the U. Annual reports provide financial information, including sales volume, revenue increases, and their total market share.

Annual reports from privately-held corporations are sometimes available through friends, relatives, and business acquaintances who own stock in a competitor's company.

Your Sales Force Your sales staff probably has more access to competitive information than anyone else in your organization. Customers often show salespeople sales literature, contracts, price quotes, and other information from competitors.

Part of a salesperson's job is to get customers to discuss problems they have with a competitor's product. Customers will also reveal your competition's product benefits, strengths, and customer service programs.

Instruct your sales force to ask for copies of any competitive literature if and when that's possible. Your entire sales staff should keep a record of all competitive information they discover — even if it's just a rumor or gossip. Devote a regular portion of each sales meeting to a discussion of the competition. Other Employees Your employees working in other areas of the company also become exposed to competitive information.

Leveraging the example above, we can drill down and discover some of the key differentiators in product offerings. Next is a comparison of key features. In the case of our console example, this means comparing features like processing power, memory, and hard drive space. While a glance at the chart above seems to indicate that the PS5 is outperforming its competition, this data only tells part of the story. The Playstation offering, meanwhile, has leaned into market-exclusive games that are only available on its system to help differentiate them from their competitors.

The last step in a competitive product analysis is looking for gaps in the market that could help your company get ahead. When it comes to the console market, one potential opportunity gaining traction is the delivery of games via cloud-based services rather than physical hardware. Companies like Nvidia and Google have already made inroads in this space and if they can overcome issues with bandwidth and latency, it could change the market at scale.

How do you stack up against the competition? Where are you similar, and what sets you apart? This is the goal of competitive analysis. Playstation offers two PS5 versions, digital and standard, at different price points, while Nintendo offers three versions of its console.

Both companies also sell peripherals - for example, Sony sells virtual reality VR add-ons while Nintendo sells gaming peripherals such as steering wheels, tennis rackets, and differing controller configurations. In part thanks to the recent semiconductor shortage, Sony has driven up demand via scarcity - very low volumes of PS5 consoles remain available. Nintendo, meanwhile, has adopted a broader approach by targeting families as their primary customer base.

This effort is bolstered by the Switch Lite product line, which is smaller and less expensive, making it a popular choice for children. The numbers tell the tale : Through September , Nintendo sold Both offer robust digital marketplaces and the ability to easily download new games or services.

Here, the key differentiators are flexibility and fidelity. The Switch is flexible - users can dock it with their television and play it like a standard console, or pick it up and take it anywhere as a handheld gaming system. The PS5, meanwhile, has superior graphics hardware and processing power for gamers who want the highest-fidelity experience.

Nintendo, meanwhile, uses brightly-lit ads showing happy families playing together or children using their smaller Switches while traveling. Engagement helps drive sales and encourage repeat purchases. While there are several ways to measure engagement, social media is one of the most straightforward: In general, more followers equates to more engagement and greater market impact.

When it comes to our example, Sony enjoys a significant lead over Nintendo: While the official Playstation Facebook page has 38 million followers, Nintendo has just 5 million. Download Free Templates. Strengths - Identify your strengths. These may include specific pieces of intellectual property, products that are unique to the market, or a workforce that outperforms the competition.

Opportunities - This part of the SWOT analysis can focus on new market niches, evolving consumer preferences, or new technologies being developed by your company. Threats - These might include new taxes or regulations on existing products or an increasing number of similar products in the same market space that could negatively affect your overall share. Before you accurately compare your competition, you need to establish a baseline.

This also helps when it comes time to perform a SWOT analysis. Take an objective look at your business, sales, and marketing reports through the same metrics you use to evaluate your competition. Record this information just like you would with a competitor and use this as your baseline to compare across the board.

Editor's Note: This post was originally published prior to July but has been updated for comprehensiveness. Originally published Nov 12, AM, updated November 12 Logo - Full Color. Contact Sales. Overview of all products. Marketing Hub Marketing automation software.

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Determine what products your competitors offer. Research your competitors' sales tactics and results. Take a look at your competitors' pricing, as well as any perks they offer. Ensure you're meeting competitive shipping costs. Analyze how your competitors market their products. Take note of your competition's content strategy. Learn what technology stack your competitors' use. Analyze the level of engagement on your competitors' content.

Observe how they promote marketing content. Look at their social media presence, strategies, and go-to platforms. Topics: Conducting Marketing Research. Don't forget to share this post!