How to conduct a competitive analysis?

If you’ve ever wondered how to keep your startup ahead of the pack, you’re in the right place. This blog piece describes a foolproof method for conducting a competitive analysis, walking through six steps to strengthen your marketing strategies and earn a bigger market share. Let's get started!

Why Competitive Analysis Matters

Conducting a competitive analysis lets you collect vital data to ensure your business stays ahead. It helps you gauge the viability of your products and services, compare your marketing efforts to your competitors, and discover creative ways to reach new customers. In essence, it’s a strategic tool that can give you an edge in a crowded market.

Step 1: Identify Your Competitors

First things first, identify which competitors you want to analyze. This includes both direct and indirect competitors. Direct competitors offer similar products and serve the same customer base (think Netflix vs. HBO Max). Indirect competitors provide different products within the same category (like Amazon vs. Target). Even my indirect competitor, Michael B. Jordan—not for his acting skills or looks, but for his enviable hairline!

Step 2: Evaluate Their Products

Next, evaluate the products your competitors offer. What makes them unique? Do they offer low-cost or high-end products? Look at how they distribute their products—are they direct to customer, or do they use retail partners? Use this data to estimate their market share.

Step 3: Research Their Sales Process

Investigate your competitors' sales processes. What channels do they use to reach potential leads? What does their sales process look like? Dig into their revenue and sales volume figures if available. This can typically be found on income statements in company earnings reports.

Step 4: Analyze Their Pricing Strategy

How much are your competitors charging for similar products? Compare your pricing with theirs. Do they offer perks like referral discounts or free trials? If they sell online, do they provide free or low-cost shipping? Understanding their pricing strategies can help you find ways to stand out.

💡 To stay competitive, use automated competitor tracking tools to monitor and compare pricing, ensuring you never miss a competitor's price update. These tools can also alert you to any perks they offer, like referral discounts or free shipping, helping you find ways to stand out in the market.

Step 5: Uncover Their Marketing Tactics

Time for some sleuthing! Use tools like Ahrefs or SEMrush to analyze your competitors' web traffic and SEO performance. Check their social media profiles to see which platforms they're most active on, how often they post, and whether they use paid ads. Look at their content mix -are they creating unique content or relying on user-generated content? Are they working with influencers? Take note of any press they’re getting.

Step 6: Conduct a SWOT Analysis

Finally, conduct a SWOT analysis to compare your company with the competition. Identify your strengths, weaknesses, opportunities, and threats. This exercise will help you uncover new tactics to convert customers that your competitors may not be doing and understand what they’re doing well that you can learn from.

Wrapping It Up

Before you know it, you'll have a clear roadmap of strategies to win over more customers and earn greater market share. A thorough competitive analysis is your secret weapon in the startup race.

To streamline this process and ensure you never miss a beat, consider investing in a smart competitor monitoring tool. These tools provide real-time insights, allowing you to adapt swiftly to market changes and outpace your competition. By integrating advanced monitoring solutions into your strategy, you can focus more on innovation and less on manual data collection.

Remember, in the startup world, staying ahead means staying informed. Equip yourself with the best easy to use tools and insights to ensure your business not only survives but thrives!