There’s no denying that today’s business landscape is highly competitive. If you want to get ahead, you’ll need to leverage all the advantages you have. To that end, you need to conduct a competitive analysis.
What’s in a competitive analysis?
A competitive analysis looks at your competition and evaluates their strategies. It identifies their strengths and weaknesses, especially against your own product or service offerings.
A competitive analysis is clearly a valuable tool when it comes to gaining a leg up in today’s marketplace. To truly make the most of this tool, however, you need to be sure you’re conducting thorough competitive research. This five-step process will show you exactly how to get the information you need.
1. Create a Framework
If you want the information you gather to be useful, you’ll need to start by creating a framework. What information do you need?
Identify the kinds of information you want to uncover. You’ll likely want to record information about products and services, as well as pricing. What about elevator pitches and mission statements?
Be sure to include strengths, weaknesses, and brand differentiators as categories as well. Once you’ve decided on the kinds of information you want to uncover, be sure to create a template you can use for each competitor.
2. Select Your Targets
Who is your competition? You’ll need to decide who you want to look at for your competitive analysis.
You will want to look at your direct competitors. You’re likely aware of many of these companies. They sell the same products or services as you do. A good example is HubSpot and SalesForce. These two companies offer products that serve the same need.
You likely won’t want to look at your indirect competition. Indirect competition doesn’t offer the same products or services. Rather, their offerings might serve a similar need. You can think of pizza restaurants competing with the grocery store, which sells pizzas that can be made at home.
Determine who your direct competitors are and begin the work of researching.
3. Decide Who Will Conduct the Research
Will you do your competitive research in-house, or will you send it to a partner firm? There are pros and cons to both options. If you decide to keep the task in-house, you may be able to control the information and expand the project if you need to.
If you go with a partner firm, you may be able to save money, complete the research faster, or gain access to more information.
A great way to ensure you’re getting the most thorough research is to split the work between an in-house team and a partner.
4. Gather Information and Go Shopping
Some of the information you need will be readily available from public sources. For example, you’ll likely be able to find out about services or products on the competitor’s website.
Other information may not be so readily available. For example, many companies will ask you to contact them for pricing information. You most likely won’t find an elevator pitch posted online.
Instead, enlist trusted colleagues to shop with your competitors. You can also go undercover. If all else fails, just ask your customers. They may have left another company or they may have recently shopped around.
You’ll also use public records, business databases, research from other firms, and your competitors’ own websites to discover the information you need.
5. Continue Monitoring
You may think your research will end once you’ve completed your competitive analysis. In all truthfulness, you should plan to continue doing periodic research and updating your analysis from time to time.
This will allow you to make adjustments to your business plans, react to your competitors and stay one step ahead.