TECHNOLOGY

How to Chart a Competitive Analysis – A Comprehensive Guide with Free Templates

Competition is increasing across all industries. As Forbes aptly puts it – “It seems that every single month, a new company and potential competitor enters your marketplace. What will separate your company from the competition over time?” Well, what indeed?

In this increasingly competitive global business environment, it’s no longer sufficient to know  about your direct competitors, but to keep your ear to the ground, understand how the  market landscape is changing, learn from your peers, and make sure you’re not only keeping pace to sustain, but working on gaining a sustainable competitive advantage. And, like all things in business, doing this methodically and systematically. 

It is likely that your competitors – or at least some of them – are systematically performing market and competitive intelligence (M&CI) to make informed strategic decisions. If they are doing it, then they are definitely leveraging it to gain a competitive advantage. 

In this article, let us understand what competitive analysis is, why it is important, and how to analyze your competitive landscape. In addition, you get a free competitive analysis template to get started! Let’s begin. 

What is a competitive analysis and why is it important?

Competitive analysis is a methodology to understand how your company compares with your both direct and indirect competitors. It helps you to:

  • Gain a comprehensive understanding of your competitors including their strengths, weaknesses, products, services, and overall value proposition.
  • Predict competitors’ strategic moves and give you opportunities to outsmart them in the market.
  • Understand where each company (including your own), stands in the competitive landscape.
  • Identify potential threats from other products and companies that could satisfy the same needs as your company.
  • Surface potential opportunities that are unmet needs of your target customer segment.
  • Forecast future market conditions, aids in planning, and enhances future business decisions.

There is one common mistake that limits the companies from getting the most out of competitive analysis. The mistake is that it is done at a regular interval – sometimes just once a year. It is a mistake because your competitive landscape is always evolving. New competitors will emerge, and existing competitors will adapt their strategies and tactics. This is why companies conducting competitive analyses on an annual, semiannual, or quarterly basis, do not get the maximum value out of competitive analysis. This has to be a “continuous” process.  

The second common mistake is that the insights and information gleaned through such an analysis are not distributed efficiently throughout the organization. The insights from a competitive analysis enhances the market knowledge of all the functions of the entire organization and impact its overall business performance. Thus, the company must ensure that actionable insights are not only gleaned from the competitive analysis but also personalized and distributed to the key stakeholders.

Now, let’s cut to the chase and understand how to actually perform a competitive analysis.

How to perform a competitive analysis

A competitive analysis structure has to be specific to your organization’s strategic priorities and current situation. However, below are the five broad categories that are commonly used in a competitive analysis:

1. Competitive Landscape

A competitive landscape analysis is the first phase of a competitive analysis. The competitive landscape phase is itself divided into a number of steps. As the first step, you begin by choosing the key players in your competitive landscape based on market existence and key offerings. Make sure to include direct and indirect competitors, as well as established and emerging competitors. 

The second step of a competitive landscape analysis is comparing competitor’s financial performance with your own. For that, you collect the financial metrics of your chosen competitors, including revenue, market share, CAGR, and operating margin, based on your data availability. 

Step three is a brief overview of your competitors, where you collect company information such as their description, employee count, funding details, key geographies, etc., alongside your own. 

Step four is to gather details on key-executives such as C-suite, Sales Head, senior managers, etc., including their background, vision, experience, etc. 

Step five is to compare employee satisfaction levels. Capture their employee satisfaction rating from review sites such as Glassdoor. Make sure to compare them with a market average. 

The final step in a competitive landscape analysis is to collate all this information, and glean key insights to understand how your company is placed in the market vis-a-vis your competitors. This will help identify trends, and also identify opportunities and threats based on these trends.

2. Product Analysis

The second phase of a competitive analysis is the product analysis. In this phase, factors such as key features, pricing, and customer reviews are compared. 

Step one of the product analysis is market outlook comparison. Here, you compare the key offerings, claims and pricing of your competitors vs. your own. It should include a short description of the product(s), their key features, the unique value it offers customers, any claims made by competitors regarding their product, pricing details like costing/licensing, and finally, any commentary provided by industry experts and analysts to give a comparative angle from an expert’s point-of-view.

The second step of a product analysis is the feature comparison, where you deep-dive into the features of your competitors’ product(s), to analyze which features are available, partly available, or unavailable among you and your competitors. Analysis can be done on an overall basis or product by product.

The third step of a product analysis is the customer reviews comparison, where you compare the average ratings and number of reviews of you and your competitors in the last 1 year on review sites like Capterra, G2 or Gartner, and then conduct an analysis on how ratings have changed in last 3 months, positively, negatively, or remained neutral. 

Make sure you also conduct a thorough analysis of reviews by listing positive and negative reviews side-by-side with an example of each. This will help you understand the strengths and weaknesses of competitor’s offerings, and identify the key reasons behind win/loss.

Finally, collate all the information to create an overall synopsis, which should answer questions like “How your company’s products are faring against competitors?”, “What does the product’s future look like?”, and “What is the general view of customers of our company against competitors?”

3. Customer Overview

The third phase of a competitive analysis is an overview of customers, your vs. your competitors’. Here, you list the number of customers, the growth rate of customers (year-on-year or quarter-on-quarter), recent deals cracked, key customers, and other insights such as which industry the majority of customers belong to, or the number of Fortune 500 customers, of each of your competitors as well as your own. Then, you compare these details side-by-side. 

4. Go-to-market Strategy

The fourth phase of a competitive analysis is the analysis of the go-to-market strategy of you and your competitors. The first step of a go-to-market strategy analysis is a positioning/messaging comparison, and should include details on how a competitor portrays itself in front of the customers as per its marketing content, leader’s statements, claims, etc. 

The second step of a go-to-market strategy analysis is understanding your competitors’ key marketing initiatives or programs. Capture both the number of initiatives such as events, discounts/promos, webinars, etc., as well as the theme/motive behind these initiatives. Add other useful insights such as “Who is the target audience for these campaigns?”, here. 

The third step of the go-to-market strategy analysis is a sales channels comparison, where you compare details around sales channels followed, number and names of sales partners, type/ geography of partner, , recent GTM initiatives , etc. Make sure to identify the competitors’ primary sales channel, e.g. online marketplace, partners, resellers, etc. 

Finally, collate all this information to understand the key competitors’ positioning and marketing channels, efforts in direct comparison with your company, as well as observed opportunities and threats imposed by them.

5. Strategic Roadmap

The final phase of a competitive analysis is the strategic roadmap analysis of your company vs. your competitors. This will include information about strategic steps including M&A,

product enhancements, launches, geo-focus, etc., plus a brief commentary on how these initiatives are rendering results/ impacting the growth of the company. Important points are the company’s focus areas and objectives, their key strategies and initiatives, and their future focus. 

Here’s a free competitive analysis template crafted by experts at Contify, to make things easier for you. All you have to do is just fill in information and your competitive analysis is ready! 

How to leverage the insights gleaned from a competitive analysis?

A competitive analysis is only useful if you know how to glean insights from it. Insights that will help empower your organization across sales, marketing, product development, the C-suite, in order to effectively differentiate your product or service. Here’s some tips:

1. Establish key takeaways for every insight

As an example, during your competitor analysis, let’s say you find out that your competitor XYZ has a really strong customer support team, and they highlight this heavily in their positioning. This information in itself, isn’t useful. Now, you dig deeper and find out that the ease of use of their product is really bad. Connect these two pieces together, and you have a key takeaway. They’re doubling down on customer support because they know their ease of use is abysmal. This key takeaway can be used by your sales teams in future conversations with a prospect. 

2. Distribute and centralize key takeaways

Unless you ensure that the right information gets in front of the right people in a timely manner, it’s pretty much useless. Sure, you could distribute this information to key stakeholders using emails or in meetings, but insights can easily get lost in emails. This is especially true for key stakeholders who receive a ton of emails everyday. As for meetings, what’s the last time you remember you actually used a piece of information discussed in a meeting? 

Which is why, it is a good idea to centralize key insights from your competitive analysis, and create a single source of truth that your colleagues can access whenever necessary. A competitive intelligence software can be a handy tool to do that, and can even distribute said insights in various formats such as alerts, reports or newsletters, depending on the preference of the stakeholders. 

3. Act on the key takeaways

Even when you’ve listed key takeaways in your competitive analysis, sometimes the stakeholders may not know what to do with them. Key stakeholders in an organization are fairly busy people, which is why it is a good idea to suggest action items along with key takeaways. For example, “…there is whitespace in our competitor’s content marketing, let’s capitalize on that by writing content on this topic they’ve missed.”