What Competitor Analysis Can Teach You About Your Business

Phil Davies
Mar 4
4 min read

As the former CEO of IBM, Ginni Rometty said, “You've got to keep reinventing. You'll have new competitors. You’ll have new customers all around you”. However, many brands fear the impact of established and disruptor brands within their industry. So what’s the solution? And how can you triumph?

It’s vital for businesses to use competitor analysis frameworks, also known as competitor analysis models. These tools will reveal the key strengths and weaknesses of other brands, which you can leverage for increased growth. Ever-reactive, this grants your business a competitive edge.

Driving your business forward, this blog will explore the benefits and elements of structured competitor analysis before highlighting valuable tools and competitor analysis templates.

What Is Competitor Analysis and Why Does It Matter?

Competitor analysis involves the collection of high-insight data specific to the marketing strategies, sales and product offerings of others within your market. Never a waste of company resources, this vital process highlights the strengths and weaknesses of those vying for the same customers as your company.

Adding value, this data informs the same facets of your business as those you are researching. For example, if other businesses have missed a gap in the market, you can respond by offering an innovative product, service or marketing message to boost your sales. These opportunities to solve customer pain points are like gold and should not be put aside for ‘one day’. Equally, your competitor analysis framework can identify areas of vulnerability that you should focus on.

The other benefits of competitor analysis for your business include:

Helping you stand out.
Predicting industry trends.
Increasing brand reactivity.
Allowing you to compare sales.
Being aware of external threats.
Spotting gaps within the marketplace.
Increasing your knowledge of the market.
Updating and strengthening your value proposition.
Achieving a competitive edge over other market players.
Increasing confidence when making decisions backed by data.

You can also reflect on these points when looking at your own business strategies.

What Should Feature in a Successful Competitor Analysis Framework?

While various competitor analysis templates exist, there are general principles that should be focused on when assessing your business’ future direction.

Firstly, you’ll need to identify who the competition is. Your competitors can be organised into direct, indirect and potential categories, as follows:

‘Indirect’ are those who offer similar services/products
‘Direct’ includes competitors who offer the same customer group alternative solutions
‘Potential’ covers any brand that could cater to your customer base but currently doesn’t.

An effective competitor analysis framework should also help in assessing the strengths and weaknesses of brands in the same market. This helps you identify where they excel as well as their challenges. Such points could be viewed as benchmarks for your company to surpass. Think of it as a beacon guiding your way in business!

The competitor analysis model should analyse how your competitors approach customer engagement, pricing and marketing. Knowing what worked for them can inform your strategies moving forward. You’ll also benefit from knowing what hasn’t worked as you refine your business’ approach for the avoidance of costly product launches, campaigns and so on.

The fourth element involves unwrapping your competition’s marketing positioning. This relates to how they define themselves in the market and can inform your messaging. By appreciating who they sell their products or services to, you can direct your efforts towards untargeted markets or evolve your pricing to compete. Here, product and service analysis helps you compare the price points, features and quality standards against those of your business.

What Can Different Content Analysis Models Reveal?

A competitor analysis framework is a favoured analytical tool that can be applied to multiple rival brands. There are various options and they should be applied regularly to help you stay ahead of the field.

SWOT Analysis

The ever-popular SWOT Analysis is a method that can be used to evaluate competitors’ (as well as your own) strengths, weaknesses, opportunities and threats. As alluded to earlier, this can help you assess your competition’s performance while informing your business or organisation’s activities.

Strategic Group Analysis

Grouping yourself and your competitors via a strategic approach (such as price, percentage of the market share, product range or marketing tactics) can determine your position in the market. Learning from those competing on similar lines or doing it the best means you can see your business in new ways. It also allows for cautious change based on others’ proven success. This may include adaptation to previously overlooked trends and consumer preferences.

Porter’s Five Forces

Harvard professor Michael Porter’s competitor analysis framework can also be used to assess your standing in terms of the industry’s competitive structure. It centres on these five key market forces:

The intensity of competitive rivalry.
The threat of new entrants.
The bargaining power of new buyers.
The bargaining power of new suppliers.
The threat of substitutes.

The framework also helps businesses looking to implement new approaches within their marketing. This highly proactive model can help in creating a company’s goals and informing their operations given the landscape of their industry.

Perceptual Mapping

This approach to competitor analysis lets businesses know how they’re perceived by customers relative to other brands. For example, you could have a luxury brand reputed for handbags with heritage as well as rivals focused on affordability.

Knowing where you sit within the market reveals opportunities to stand out via brand positioning or pivot to target new customers. These findings (shown on a graph) help brands understand the broader competitive landscape.

Realise Valuable Lessons about Your Business

As part of our professional Data and Insight Services, De Bono Marketing harnesses competitor analysis frameworks. We remain objective in delivering insights, which can inform our suite of related services. Prepare to receive valuable information to boost your business’ strategic growth.