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Learn how can a competitive analysis improve your business.
4 min read
Sales & Marketing head at Scalestack
If there is one important factor for success, many people would say different things. Some would rely on the sales performance, others on the functioning of the systems, and others on the communication and morale of the employees within the company. Although all of these and more tasks are hugely relevant, there is one that is behind all of them, and that is analysis.
If you analyze wrongly what is going on in any part of your organization, then you cannot detect what things are being done in an ineffective way, so you cannot correct them, and your overall deficiency increases. That is why counting on a competitive analysis can set you up for success and not counting on one can set you up for failure.
This blog will cover the basics of how to carry out this kind of analysis, how to define them, and how to realize one from which you can leverage.
A competitive analysis is a developed strategy that involves the research of major competitors to gain insight into their products, sales, and marketing tactics. Competition market analysis can be a powerful tool for establishing stronger business strategies, warding off competitors, and capturing market share.
This type of analysis is really effective at helping you learn the ins and outs of how your competition functions, and identify potential opportunities where you have the possibility to outperform them in some way, and in some area. Plus, it enables you to stay at the top of industry trends and assure that your product is consistently meeting, and exceeding the industry standards.
What does a competitive analysis do? It assists businesses and marketing teams to understand their company’s target market. How do they do that? By examining the strengths and weaknesses of competitors' business strategies, mainly.
Competitive analysis includes the evaluation of competitors' products, price points, and sales and marketing strategies using competitor research tools. A company's competitive landscape is in constant evolution, pacing all the time, so no market is without two or more competing companies selling similar products and services.
There are four main points that back the relevance of having someone performing this analysis.
First of all, it helps you discover your competitor's strengths and weaknesses, as we said. It is the key factor, undoubtedly. From it, you are likely to gain vital information from a critical analysis of your target market.
Second of all, it provides an understanding of your own company's strengths and weaknesses, which is also vital. It is true that some problem areas are more challenging to identify than others. Competitive advantages and limitations can be assessed and improved by following an analysis, enabling your company to capture more market share and stay ahead of rivals.
In third place, it gives you an approach to how you can learn how to best deploy your resources as a business. It gives in-depth market research that pinpoints differentiators between you and your competitors' business strategies. By conducting this kind of analysis, internal teams find out ways to maximize their resources and outperform their competition.
Fourth and last, it gives you a hand by the time you have to discover growth opportunities for your organization. Competitive analysis also helps measure the value proposition of your upcoming products and services. By conducting thorough research, your company is able to identify new areas for growth and the planning of practical actions.
In this section, we will discuss some elements that cannot be left out when performing a competitive analysis. You have to do these things if you want your analysis to be an efficient one.
SWOT stands for Strengths, Weaknesses, Opportunities, and Threats. To identify competitive advantages, businesses analyze the strengths, weaknesses, opportunities, and threats of their competitors based on their SWOT analysis.
SWOTs are a simple but highly influential tool. In addition to building a stronger marketing strategy, a SWOT analysis also helps define broader growth benchmarks, sales, and marketing metrics, and value offers.
All of the following areas must be covered when doing a SWOT analysis. Content strategy, shipping and pricing, brand positioning, marketing strategy, SEO strategy, customer support, etc.
In order to better define your competitor’s strengths and weaknesses during a SWOT analysis, you should have a prearranged list of questions. Here are some to orient you on the type of questions that you should be asking yourself and your employees. How does their product or service compare to ours? Why would a consumer find our offer more appealing? In what areas do they stand out? Where are they weakest? And ours? What could we improve?
This is useful to you to assess threats and create lucrative business opportunities. Pay attention to what your audience answers and what specific changes you are capable now of making that will surely benefit your product or service. Use your marketing skills to take advantage of these findings and address your customers' pain points directly.
2. Social media performance
Your competitor’s social media presence is another thing that you should look closely into.
Your competitors will use their social media platforms to interact with their target audience in different ways. If they're reaching a user base that you are not, they have an advantage over you. For example, consider how different platforms may better serve customer needs than your current procedures.
Think of it the following way. If they partner with influencers on TikTok, it is important to understand whether users are engaging with the sponsorship and if it’s generating customer referrals or not. Use this data to evaluate how to make adjustments to your social media strategy.
Now that you know how to carry out competitive analysis, you just have to plan your own and start practicing it. It is only a matter of time before it gives you results that will lead you to imminent success.