Competitive Analysis Guide in 2024: What Is It & How to Do It

Competitive Analysis Guide in 2024 What Is It & How to Do It

If you had to define competitive analysis right now, what would you say? Can you explain it? Can you bring some competitive analysis examples?

If you are not sure how to answer these questions, don’t worry! We are here to put your mind at ease. Here is the plan! First, we’ll give a definition of competitive analysis and other terms related to this topic. Then, we’ll introduce you to some of the competitive analysis tools such as CRO tools and other analytics tools to help you keep a sharp eye on your competitors as well as your customers. 

So, are you ready for a ride? Let’s go!

What Is a Competitive Analysis

As the name states, competitive analysis is a process of evaluating and understanding the strengths and weaknesses of competitors in the market. It involves gathering and analyzing information about competitors’ products, pricing strategies, marketing tactics, and overall business operations to identify opportunities and threats to one’s own business.

By conducting a competitor analysis, businesses can gain insights into their market position, identify areas for improvement, and make informed decisions about their marketing and product strategies. It can also help businesses stay ahead of the competition by identifying potential new competitors and emerging trends in the market.

Some common methods used in analyzing competitors include SWOT analysis, Porter’s Five Forces model, and benchmarking against industry standards. The goal of competitive analysis is not to copy competitors, but rather to use the information to inform strategic decision-making and improve one’s own business.

What Is a UX Competitive Analysis

A UX (User Experience) competitive analysis is a specific type of competitive analysis that focuses on evaluating the user experience of competitors’ products or services. It involves analyzing how users interact with a competitor’s website, app, or other digital product, and identifying areas where the user experience can be improved.

The process typically involves identifying the key competitors in a particular market and then evaluating their products or services based on a set of criteria. This may include analyzing the user interface design, navigation, content organization, visual appeal, and overall user experience.

What Is the Goal of UX Competitive Analysis

The goal of a UX competitive analysis is to gain insights into how competitors are meeting the needs of their users and to identify opportunities for improving one’s own user experience. 

By understanding what users like and dislike about competitors’ products, businesses can make informed decisions about how to improve their own products and services to better meet user needs. Insights derived from UX competitor analysis help businesses in the whole UX design process.

Overall, a UX competitive analysis is an important tool for businesses looking to improve their digital products and services and stay ahead of the competition in today’s digital marketplace.

Tips for Conducting a Competitive Analysis

Imagine you’re a detective trying to solve a case. You need to gather clues and analyze evidence to figure out who the culprit is. Conducting a competitive market analysis is a lot like being a detective. Here are some tips for conducting a competitive analysis, in detective terms:

Tips for Conducting a Competitive Analysis
Tips for Conducting a Competitive Analysis

Tip 1: Focus on Your Target

Just like a detective focuses on a suspect, focus on your target market. Identify who they are and which competitors are most relevant to them.

Tip 2: Be Thorough

Collect as much information as you can on each competitor. Look at their products, prices, marketing, and customer feedback.

Tip 3: Use a Variety of Sources

Gather information from a variety of sources. This could include industry reports, customer reviews, and social media.

Tip 4: Analyze the Evidence

Look for patterns and trends in the data you’ve collected. Identify the strengths and weaknesses of each competitor.

Tip 5: Use the Right Tools

Just like a detective uses forensic tools, consider using competitive analysis tools to help you organize your findings and identify key insights.

Tip 6: Focus on What Matters

Just like a detective doesn’t get bogged down in minor details, focus on the factors that are most important to your target market and business goals.

Tip 7: Be Objective

Just like a detective tries to remain objective, view the competitors’ products and services objectively and avoid personal biases.

Tip 8: Keep It Current

Just like a detective doesn’t stop investigating until the case is solved, conduct a competitive analysis on a regular basis to stay up-to-date on changes in the market and new competitors entering the scene.

By following these competitive analysis tips, you can conduct a competitive analysis like a seasoned detective and uncover valuable insights to help your business succeed.

Benefits of the Competitive Analysis

Here are some benefits of conducting a competitive analysis:

  • Understanding the market: A competitive analysis helps businesses gain a better understanding of the market they operate in, including key trends, customer preferences, and potential opportunities.
  • Identifying competitors: By analyzing their competitors, businesses can identify who they are up against and how to differentiate themselves from the competition.
  • Developing a unique selling proposition: By understanding their competitors’ strengths and weaknesses, businesses can develop a unique selling proposition that sets them apart from the competition.
  • Improving products or services: A competitive analysis can reveal areas where a business’s products or services need improvement to better meet customer needs and expectations.
  • Informing marketing strategies: By analyzing their competitors’ marketing strategies, businesses can identify effective tactics and adjust their own strategies accordingly.
  • Making informed business decisions: A competitive analysis provides businesses with valuable insights that can inform a wide range of business decisions, from pricing strategies to product development.
  • Staying ahead of the competition: By continually monitoring the competition, businesses can stay up-to-date on changes in the market and emerging competitors, allowing them to stay ahead of the competition.

Overall, competitive analysis is essential for businesses looking to succeed in a competitive market. It provides valuable insights that can inform business decisions, improve products or services, and ultimately help a business gain a competitive edge.

How To Conduct a Competitive Analysis

For conducting competitive analytics with any templates, you should write your plans by following these steps:

I. Introduction

  • Briefly introduce the purpose of the competitive analysis.
  • Explain why it is important to understand the competition.
  • Provide a summary of the company being analyzed.

II. Competitors

  • List the main competitors in the industry.
  • Briefly describe each competitor, including their size, market share, and target audience.
  • Provide information on their strengths and weaknesses.

III. Product/Service Comparison

  • Compare the products or services offered by each competitor.
  • Highlight the differences between their offerings and the company being analyzed.
  • Analyze the strengths and weaknesses of each product or service.

IV. Marketing Strategies

  • Evaluate the marketing strategies used by each competitor.
  • Compare their branding, messaging, and advertising efforts.
  • Assess the effectiveness of their marketing tactics.

V. SWOT Analysis

  • Conduct a SWOT analysis for each competitor.
  • Analyze their strengths, weaknesses, opportunities, and threats.
  • Compare their SWOT analysis to the company being analyzed.

VI. Market Share

  • Determine the market share of each competitor.
  • Compare their market share to the company being analyzed.
  • Analyze the trends in market share over time.

VII. Competitive Advantage

  • Identify the competitive advantage of each competitor.
  • Analyze the sustainability of their competitive advantage.
  • Compare their competitive advantage to the company being analyzed.

VIII. Conclusion

  • Summarize the findings of the competitive analysis.
  • Identify areas where the company being analyzed can improve.
  • Provide recommendations for how the company can gain a competitive advantage in the industry.

Competitive Analysis Templates

Here are the 5 best competitive analysis templates you can use to analyze your competitors and optimize your conversion rate

#1 Porter’s Five Forces Analysis

This framework analyzes five key forces that shape an industry and affect competition. These forces include the threat of new entrants, bargaining power of suppliers, bargaining power of buyers, threat of substitute products or services, and rivalry among existing competitors.

#2 Value Proposition Canvas

This competitive analysis template helps you understand your customer’s needs and how your product or service meets those needs better than your competitors. It includes two key components – the customer profile and the value map.

#3 Competitor SWOT Analysis

This competitive market analysis template is similar to a regular SWOT analysis, but it focuses specifically on your competitors. It helps you understand their strengths, weaknesses, opportunities, and threats, and identify areas where you can gain a competitive advantage.

#4 Benchmarking

This template involves comparing your company’s performance to that of your competitors. It includes both financial and non-financial metrics and helps you identify areas where you can improve.

#5 Customer Journey Map

This template helps you understand your customer’s journey from awareness to purchase and beyond. It includes an analysis of your competitors’ customer journeys and helps you identify areas where you can differentiate your product or service.

When Do You Perform a Competitive Analysis

Performing a competitive marketing analysis can be beneficial for businesses in various scenarios. Here are some examples of when a competitive analysis should be performed:

  1. When entering a new market: If a business is considering entering a new market, it’s important to understand the competitive landscape. A competitive analysis can help identify key players in the market, their strengths and weaknesses, and the potential barriers to entry.
  2. When developing a new product or service: Before launching a new product or service, businesses should conduct a competitive analysis to understand the market need, potential competitors, and areas where the product or service can differentiate itself.
  3. When considering a merger or acquisition: A competitive analysis is often performed as part of due diligence when considering a merger or acquisition. It helps businesses understand the market position of potential partners, identify potential synergies, and assess the competitive threats in the market.
  4. When reviewing business strategy: As part of regular business planning and strategy reviews, a competitive analysis can help businesses understand their market position, identify areas for improvement, and make informed decisions about resource allocation.
  5. When launching a new marketing campaign: A competitive analysis can help businesses understand the messaging and tactics used by their competitors in the market. This can help inform the development of a new marketing campaign and identify areas where the campaign can differentiate itself.

In summary, you should analyze competitors when you want to better understand the competitive landscape, identify opportunities for growth and differentiation, and make informed decisions about strategy, product development, or resource allocation

Competitive Analysis Example

To help you understand competitor analysis better, here is an example of a restaurant owner trying to analyze their competitors.

Imagine you are a chef trying to create a new dish that will stand out in a crowded restaurant scene. You know there are other chefs with similar dishes, but you want to create something unique that will draw customers in.

To do this, you need to conduct a competitive analysis of other restaurants offering similar dishes. Here’s how you could approach it:

  1. Identify your competitors: Start by identifying other restaurants in the area that offer similar dishes. These are your main competitors.
  2. Define your criteria for analysis: Decide on the factors that are important to your customers, such as taste, presentation, price, and service.
  3. Gather information: Visit each restaurant and sample their dishes. Take notes on the taste, presentation, and price of each dish. Observe the customer service and the overall atmosphere of the restaurant.
  4. Analyze the information: Look for patterns and trends in the data you have collected. Identify the strengths and weaknesses of each restaurant and determine what makes them stand out.
  5. Compare your restaurant to your competitors: Compare your own restaurant to each competitor in terms of the criteria you defined earlier. Identify areas where you excel and areas where you can improve.
  6. Use the information to inform your menu: Finally, use the insights gained from the competitive analysis to inform your menu. Identify ways to improve your dishes, differentiate your restaurant from your competitors, and offer unique options that will draw customers in.

Just like a chef, businesses can conduct a competitive analysis to stand out in a crowded market. By understanding their competitors’ strengths and weaknesses, businesses can make informed decisions to improve their products or services and gain a competitive edge.

Competitive Analysis FAQs

Before finishing this comprehensive competitor analysis guide let’s answer some of the frequently asked questions regarding this matter.

Q1. Is SWOT a Competitive Analysis?

Yes, a SWOT analysis can be considered a type of competitive analysis. SWOT stands for strengths, weaknesses, opportunities, and threats, and it is a framework used to evaluate a company’s internal and external factors.

Thanks to SWOT, by assessing their strengths and weaknesses, businesses can identify areas where they have a competitive advantage or disadvantage. In the same sense, by analyzing opportunities and threats, businesses can identify potential areas for growth or areas where they may face increased competition.

Q2. What Should Be Included in A Competitive Analysis?

A competitor analysis should include an evaluation of the main competitors, their product and service offerings, pricing and marketing strategies, strengths and weaknesses, market share, opportunities and threats, competitive advantages, and future outlook. 

The analysis should provide a comprehensive understanding of the competitive landscape in a particular market or industry, and help inform business strategy and decision-making.

Competitive Analysis: Final Words

In conclusion, a competitor analysis is a valuable way for businesses to evaluate the competitive landscape in a particular market or industry. It helps identify key competitors, their product and service offerings, pricing and marketing strategies, strengths and weaknesses, market share, opportunities and threats, competitive advantages, and future outlook.

By conducting a competitive analysis, businesses can make informed decisions about product development, marketing strategies, resource allocation, and overall business strategy. Regularly performing a competitive analysis can help businesses stay ahead of the competition and adapt to changes in the market.

After investigating your competitors, it’s time to apply the gathered information to your customers. One of the best tools to do so and help you measure how effective the changes were is WatchThemLive. This CRO tool is free and can be a perfect option for small and medium-sized businesses. Give WatchThemLive a shot and enjoy optimizing your website.

Cyrus
Cyrus
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