How to analyze competitors and why?

Let’s start with the fact that by analyzing competitors, we can learn a lot from them. The scheme is simple: we look at what they do, refine it, and make it better.

Why conduct an analysis?

• to create your own unique selling proposition and differentiate from competitors.
• to find out what internet marketing strategy your competitors are using. Identify their main traffic sources and estimate their marketing budget.
• to learn about the functional features of competitors’ websites and their weaknesses – take these into account when developing your own site.

Competitive analysis shows:

• Who is a real competitor in the fight for the customer
• What strategy competitors are applying
• What unique selling proposition competitors have
• In which direction you should develop to increase market reach and profit
• How to differentiate from competitors and find your advantage
• How to demonstrate the uniqueness of the product and attract additional target audiences

Basic rules for competitor analysis:

• Understand the purpose of competitor analysis
• Select at least 10 competitors
• Define criteria for competitor analysis
• Do not hesitate to conduct a detailed analysis based on all criteria
• Document your conclusions

Competitor Analysis

How does competitor analysis take place?

First of all, we analyze the niche and learn about our real competitors.

To get a detailed picture of the market, switch to incognito mode in your browser. Why incognito? In this mode, previous search history and visits are not taken into account. Enter key queries related to your niche into the search engine and look at the organic results of competitors. Compile a list of main competitors in the results who are similar to you in terms of product line.

There are several types of competitors:

• Direct. the most important and dangerous, selling a similar product
• Indirect. require attention. They have related similar products that satisfy the same need but in different ways.
• Latent. potentially dangerous. Businesses where both products and consumers are different.

Let’s consider an example.

On the left, list the entire range of services and compare whether similar services exist among competitors. In this example, you identified them. As a result, we can see that our direct competitors are “Sheriif,” “Komandor,” and, for example, “Sirius.” Indirect competitors for us may be “Venbest” and “Orlan.”

After identifying the main competitors, we need to clarify what we want to do with them: analyze the product or website, etc.

But generally, we always start with product analysis. For this, we compile a list of key competitors and create a table for easier comparison of metrics. These can include:

• Service metrics: list of services, cost, content, availability of service packages, location, unique selling proposition, payment formats, etc.
• Metrics for product companies: product range, list of brands, how many and what categories of products are represented from each brand, pricing and justification of price, package offers, unique selling proposition, additional services, delivery, etc.

Product Matrix

You need to study the competitors’ products from all angles, paying attention even to the details. This will help identify your features and unique differences. To do this, you need to understand what the main products are, upselling, package offers, etc.

Characteristics to analyze:

• assortment
• appearance
• packaging
• characteristics
• warranty support
• sales format
• term
• degree of popularity
• etc.

Pricing

Each product has its own cost. Of course, it is determined by many factors. You need to find out what is included in their price and how justified it is. Then you should put yourself in the customer’s shoes and assess the final cost itself. It is also separately recommended to analyze the discount policy.

Positioning Map

As variables, use any two significant characteristics of the product for the potential audience, for example, the variables:

• price and quality
• price and comfort
• necessity and luxury
• etc.

Fig. 2 – Example of a positioning map

By plotting competitors on the map, you also place yourself. This way, you can see which of your competitors is closest to you.

Next, we can analyze the marketing of competitors. For this, we need to find out:

• which promotion channels they use
• how they position themselves
• how they present information to the target audience in advertising layouts
• whether they use unique selling propositions in advertising messages

Retention, monetization, and customer return

• whether they use email marketing or SMS distribution
• whether they have a sales funnel
• whether they send commercial proposals and if so, what kind
• merchandising and POS materials
• whether they conduct master classes
• whether they give additional gifts, discounts
• whether they use a loyalty program

We also conduct a mystery shopper analysis. This marketing analysis method involves a marketer posing as a potential buyer, calling competitors’ firms, and analyzing the speed and quality of the sales departments’ work, and even the sales funnel.

What to pay attention to:

• the speed of response to inquiries to the company – how quickly they answer the phone, respond to requests from the website, or to callback requests.
• Whether the conditions stated on the website match reality – whether the product is in stock, its price, and delivery conditions.
• The manner of communication of the managers – whether they are polite, try to solve the customer’s problem or sell anything, and whether they keep their promises.
• adherence to the working hours
• whether they use CRM
• the provision of services / delivery of goods – whether the promises made to the client are kept

Website Analysis

It is very important to analyze competitors’ websites before creating your own: their structure, usability, how clear and simple everything is for the consumer.

What should you pay attention to?

• whether the navigation system on the website is well thought out (logic, information layout, blocks, buttons, transitions, etc.).
• whether it is clear what the company does when opening the website
• whether the website is responsive to mobile devices
• how quality the website layout is
• content filling
• design: modern or outdated
• website structure (to pages)
• contact elements – phone, application forms, online consultations, chat-bot
• list of services/product categories
• availability of cost
• additional services/features
• Special offers
• bonuses / loyalty programs
• presence of a blog and content strategy
• functionality of the website and personal account

Social Media Analysis

It is important to understand which social media platforms competitors in your niche are using, how they communicate with consumers, how well they maintain communication, etc.

What should you pay attention to?

• which social media platforms are used and how they are presented
• number of subscribers and their activity (likes, comments)
• presence of a content plan, categorization, and frequency of publications
• most popular type of content
• presence of advertising campaigns on social media
• profile mentions by other users

After conducting the analysis, we should draw conclusions about each competitor: what insights emerged; what they do well and what they do poorly; what we will take as a basis for the product/website.

SWOT Analysis

Based on this, we recommend conducting a SWOT analysis. Strengths weaknesses are internal factors of the company that you can control. Opportunities and threats are external uncontrollable factors.

Fig. 3. – SWOT analysis scheme

SWOT analysis helps answer the following questions:

• Can it be said that the company is utilizing its strengths 100%?
• What advantages does the company have? If there are none, which of the strengths can become advantages?
• Which opportunities will help the company become successful?
• Which threats are the most serious? And what needs to be done to protect against them.

Competitive analysis is an important tool for business development and increasing profitability. It helps identify potential risks and dangers in the market, as well as opportunities to enhance competitiveness and position the product as a leader relative to competitors.

Additionally, conducting competitive analysis helps businesses stay informed about the latest trends in their industry and even track innovations and technological progress that may impact their operations.

Finally, conducting competitive analysis helps businesses better understand their customers and their needs. This allows businesses to develop products and services that meet customer needs and better promote their brand in the market.

To delve deeper into the topic, you have the opportunity to view the report in video format with answers to questions.