Competitor analysis is a measurement of the weaknesses and strengths of the potential and current competitors in strategic and marketing management. This type of analysis offers both defensive and offensive circumstances to find out the threats and opportunities in the organization. Competitor analysis allows the profiling of all the relevant sources of information in one framework to provide support to the effective and efficient implementation, formulation, adjustment, and monitoring of the strategies.
Competitor analysis is a vital aspect of the corporate strategy. It is seen that most of the companies do not conduct this analysis properly and systematically enough. As a result, many firms face hazardous competitive loopholes due to the absence of strong analysis of the competitors. In other words, competitor analysis is a tactic to identify the main competitors and investigate their respective sales, products, services and marketing strategies. In this way, the marketing strategies for a business can enhance that might be heavy on the competitors. Competitors analysis helps to learn about the in and out of how the competitor operates.
Applications of Competitor Analysis
Every company can benefit from competitor analysis. By conducting a competitor analysis, the management team will be able to:
- Identify the present gaps in the market
- Development of the new services and products
- The demand of the market
- Selling of the products more efficiently
- Uncovering the trends of the market
Once there is an identification of the true competition, there should be a comparison of the different metrics on board.
How to Perform a Competitor Analysis?
The competitor analysis can be done based on the nine factors that can be compared and identified. The factors are as follows.
- Determination of the Competitors: First, the competitors need to be identified so that all the data can be compared accurately. The competitors are divided into two types which are Direct and Indirect. Direct competitors are those who offer a similar substitute for the products that you are selling in the market within the same geographical area. Indirect competitors are those who do not offer the same products or services like yours but can satisfy the need of the same customers or can solve similar problems. When comparing the products or the brands, only direct competitors should be taken into account. However, the market can and will shift anytime and if you are not constantly running the competitor’s analysis at regular intervals, then there is a chance of scoping out the changes until it is too late.
- What Type of Products do the Competitors offer?: Analyze the complete line and quality of the products or services, the competitors are offering. The pricing and discounts offered to the customers should also be taken into account.
- Research about the sales strategies and results of the competitors: Regular sales analysis of the competitor should be performed to get an idea about how their sales process is. The annual reports for most of the publicly held companies can be found online. CRM or a survey of the customers can also be done to find out about who they are considering your competitor. When the competitor is identified, you can also ask open-ended questions to the customers to find out what is more appealing and what is turning the customers away from the brand.
- Analyze the Marketing Strategies of the Competitors: Complete analysis of the website of a competitor is the most convincing way to measure their efforts for marketing. Presence of blogs, whitepapers or ebooks, visual content like cartoons or infographics, case studies and online and offline campaigns for advertisements are some of the marketing strategies the competitors can follow.
- What is the Quality of the Content of the Competitor?: Look out for the quantity of content like blog posts, white papers or ebooks on the competitor’s website. Next, identify the frequency of the content assets. If there is a robust content archive on the website, then the opponent has been regularly publishing them for a long time. This may help you to sharpen the lead generation policies. At last check out the quality of the content. If the content covers a variety of topics then it is high time to input different types of subjects in your blog also. If there is a clear understanding of the content strategies of your rival, then you can win half of the battle already.
- Observe the Way the Competitors promote the Content: To observe how the content of the competitors is helping them to promote their brands, you have to find out the following checklist if they are present in them or not.
- Keyword density in the content
- ALT text tags of the Image
- Application of internal linking
- Presence of any authority links
- Presence of Social Media Strategies of the competitors: Evaluation of the presence in social media and the rate of engagement of the customers is the two most vital things that need to be considered in the competitor analysis. Takedown the number of followers or fans, consistency and frequency of posting, and engagement and virality of the content are some of the points to follow in the competitor’s social media accounts.
- Perform a SWOT analysis on the competitor: Conduct a complete SWOT analysis of each of the components of your competitor to analyze their Strength, Weaknesses, Opportunities, and Threats. After recognizing each of these points, compare your strengths against their weaknesses. By comparing this, you can uncover the hidden opportunities for improvement within the brand.
Thus before starting the competitor analysis and comparing the data of your opponent, the baseline of need to be established by preparing a SWOT analysis of both yourself and your rival. Once the checklist of all the above worksheet of the competitor analysis is fulfilled, then it is high time to turn that information into action. Without adjusting your marketing plans according to the strategies of your challenger, your service or product will not be able to sustain the tough market.