The dynamic environment in which a business operates necessitates keeping a close watch over the competitors. This will help you identify areas that were not explored for attaining a better reach.
In this blog, we offer you an understanding of the strategies that can help with effective competitor analysis.
What is competitor analysis?
Competitor analysis is the process of assessing and evaluating the strengths and weaknesses of rival businesses in a particular industry.
Competitor analysis involves gathering information about
- competitors' products
- Marketing strategies
- Distribution channels, and
- Overall business performance.
The goal of competitor analysis is to gain insights into the competitive landscape, identify opportunities and threats, and make informed decisions to improve a company's competitive advantage.
What is the need for competitor analysis?
If you are contemplating the need for competitor analysis, this is for you:
- To explore opportunities
- Improve business growth
- Increase returns
- Stay relevant
1. To explore opportunities
Competitor analysis helps you by exploring untapped opportunities. There may be some areas where your competitors are not strong. If you explore these areas, it may prove beneficial for the growth of your business.
For example, some brands fail to cover the local audience in their marketing strategies. You may find huge chances of growth if you tap this section through your promotional strategies.
2. Improve business growth
With competitive analysis, you perform a SWOT analysis. This helps in the sustainable growth of your business. You are aware of your strengths and weaknesses and your competitors’. This facilitates your plan of action to improve growth.
3. Increase returns
This is the result of improvements in your business. Once your business starts to scale, your returns also increases. With higher returns, you can further plan to expand and invest more in your business.
4. Stay relevant
Knowledge of what your competitors are up to is highly essential to stay relevant in the market. Otherwise, you will be running a race of your own. You should keep yourself updated to prevent being outdated.
How to do competitor analysis: 8 strategies you must know
Here is how to do competitor analysis with these 8 effective competitor analysis strategies.
- Identify and understand your competitors
- Understand your industry/domain of operation
- Understand your buyers
- Find your competitive advantage
- Repeat competition analysis at regular intervals
- Monitor the organic performance of competitors
- Research the 4 P’s of marketing
- Perform a SWOT analysis
1. Identify and understand your competitors
You should try to ascertain who your competitors are. Both direct and indirect. Direct competitors have the same product lines as your own, but your indirect competitors are those whose product lines aren’t the same but are capable of solving your customer’s needs.
For example, there are so many food outlets available that may offer different types of food like continental, Italian, multicuisine, etc. Suppose you are also in the food business but offer only pizzas. The other types of food outlets mentioned are your indirect competitors. But, all of you are competing for the same customer.
This understanding is necessary because your main focus should be on the direct competitors. Identification of competitors plays an essential role, as you must be aware of who you are competing with to chart your strategies.
2. Understand your industry/domain of operation
Do you think analyzing your competitors can automatically help you scale? No, because no two businesses are the same. Before anything else, you should understand your domain of operation.
This is essential to identify competition in your industry, the probability of new entrants to the industry, and the threat of substitute products in the market. This will help you frame strategies for competing and also explore opportunities in new market segments.
3. Understand your buyers
Stepping into your buyers' shoes will let you understand their needs better. Research and find out what the buyers expect from your brand. What is the factor that keeps them shifting to your competitors? You can easily perform well in your business when you have answers for these.
To understand the buyers better, periodic interactions with them through surveys can help a great deal. Remember, feedback is an important source to capitalize.
4. Find your competitive advantage
What are your specific strengths? What areas can you project your brand as an advantage over others? When you understand this, you can find out how you can scale better than your competitors.
For example, you may offer a free trial period for 30 days without retaining credit card information or a monthly payment plan in contrast to your competitor, who bills only annually. These benefits give you an edge over the rest of your industry.
5. Repeat competition analysis at regular intervals
Competition analysis is not a one-off process but a continuous one. You should do this at regular intervals to keep it relevant and updated. Otherwise, you may be competing with standards that are outdated now.
Also, repeating the analysis frequently will help identify new opportunities. It lets you understand what you have already achieved through your previous analysis process.
6. Monitor the organic performance of competitors
This involves analyzing how your competitors have been able to grow organically. You should research on how they are able to bring about the difference and attract the audience. This analysis will help you understand what you should target to improve growth.
Organic performance monitoring is highly useful as it indicates the real and sustainable growth. You could take inspiration from your competitor’s strategies and apply them based on your niche.
7. Research the 4 P’s of marketing
While performing a competitor analysis, you should focus on the 4 Ps of marketing, namely, product, price, promotion, and place. Some more information about these are here:
- Type of products sold by competitors
- What is the selling point for these products?
- What are the main features that attract buyers?
- What is the pricing model of competitors?
- Discounts offered.
- Does pricing and quality of products match?
- What are their strategies for marketing?
- How popular is their strategy?
- Does your competitor sell online or in a physical store?
8. Perform a SWOT analysis
Prepare a list of your strengths, weaknesses, opportunities, and threats. This is based on the competitor analysis and will be your guide for focusing on your growth better. You may also prepare the same for your competitors for a better and easier comparison.
SWOT analysis for competitor analysis is an in-depth process that helps you a great deal in improving your performance.
10 Best competitor analysis tools
Automated tools are wonderful supplements to perform competitor analysis effortlessly and more meaningfully. Here are 10 best competitor analysis tools
- Long Tail Pro
With Semrush, you can analyze every online activity of your competitor online. It offers traffic analytics to understand website traffic for you and the competitors. By identifying organic competitors, it provides rich information for you to grow.
It also provides analytics of competitors’ advertisements and uncovers their intent. Social media analytics of competitors and how they increase engagement can also be ascertained easily with Semrush.
Spyfu assists you in identifying threats from competitors and also offers insights into converting them into opportunities.
You can identify competitors based on your domain, making the search relevant. It also measures the competitor’s popularity by assessing the conversions they gain.
This tool helps you analyze opportunities and trends in the market. It also lets you know the buyer's intent for easy focus.
Raw data is organized and processed through algorithms to present you with relevant data for competitor analysis.
A very popular and easy-to-use tool, Ahrefs helps you with keyword research and track organic visibility. It gives you information on why and how your competitor is ranking.
With Ahrefs, you can achieve organic growth as it offers a backlink profile of any URL through its backlink crawler.
This useful tool can help you identify well-performing pages and keyword phrases of your competitors.
This is a comprehensive tool and also identifies your potential competitors. It stores up to nearly seven years of SEO data which can be useful for better analysis.
For any specific topic, BuzzSumo can help you analyze its performance. It also provides you with information about the content’s engagement on social media.
This is useful for comparison with competitor’s data. With definitive numbers that express engagement, it is a tool that one can look up to for competitor analysis.
This is yet another popular tool that can help with keyword research, backlink analysis, content marketing ideation, competition research, etc.
This tool can also analyze your competitor’s PPC strategy. Analysis of social media shares and popularity is also easy with Serpstat.
This tool is comprehensive and provides you with as much information as you may need from your competitor. It gets an optimization report ready in minutes by just entering the website of your competitor in the search query tab.
It gives you data on indexing, social media profiles, estimated traffic, backlinks, etc. Through its super-fast platform, it generates your site’s on-page and off-page SEO instantly.
Moz assesses the health of your site by studying the important metrics. It lists down your top competitors, the most-ranking keywords, and also offers insights into the opportunities.
Analizing link-building of your competitors is made easy with Moz. This is an important aspect of SEO and helps gauge your position.
10. Long Tail Pro
An impressive tool that you could use for competitor analysis and improving your SEO is Long Tail Pro. It offers you data on popular keywords and opportunities to discover new keywords.
It also provides information about the keywords your competitors are targeting. All relevant inputs, like search volume and keyword competition, can be obtained using this tool.
Competition is the main component that provides the impetus for your business’s growth. Proper analysis of the same with the help of tools can help you scale organically. Without competitor analysis, you will not be able to reach sustainable growth.
Do not forget to repeat the process again and again, as periodic analysis may bring to light more aspects for better comparison and help accelerate growth.