How To Do Deep Competitive Analysis On Your Brand’s Rivals

How To Do Deep Competitive Analysis On Your Brand's Rivals

Competitive analysis is an essential component of brand strategy that helps businesses stay ahead of the curve.

By evaluating the strengths and weaknesses of competitors, businesses can identify opportunities to differentiate themselves in the marketplace and create unique value propositions.

In today’s hyper-competitive business environment, understanding the competition is more important than ever. Without an accurate picture of what others in your industry are doing, it isn’t easy to know how to set your brand apart and appeal to your target audience.

Competitive analysis provides insights into what your competitors are doing well and what they’re not, allowing you to capitalize on their weaknesses and differentiate yourself in the areas where you excel.

By analyzing customer reviews, social media sentiment, and other indicators of consumer behavior, businesses can gain a deeper understanding of what matters most to their target audience and adjust their brand strategy accordingly.

This post is part of a cluster posts series related to “Brand Strategy: The Practical Guide For Brand Owners.

Contents ...

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What is competitive analysis, and why is it important?

Competitive analysis is the process of evaluating the strengths and weaknesses of competitors in the marketplace to inform a company’s business strategy.

It involves analyzing various factors, including product offerings, pricing, marketing tactics, and customer feedback, to gain insights into what competitors are doing well and where they fall short.

By conducting competitive analysis, businesses can identify opportunities to differentiate themselves in the marketplace, better understand their target audience, and make informed decisions about product development, marketing, and sales.

Ultimately, competitive analysis is critical to any successful business strategy, helping companies stay ahead of the market and achieve their goals in today’s dynamic marketplace.

1. What are the important elements of competitive analysis?

The critical elements of competitive analysis include identifying and evaluating the strengths and weaknesses of competitors’ products or services, pricing strategies, marketing tactics, distribution channels, and customer feedback.

It also involves analyzing broader market trends, such as changes in consumer behavior or technological advancements, that could impact the competitive landscape.

The goal of competitive analysis is to gain a comprehensive understanding of the competitive environment and identify opportunities to differentiate oneself in the marketplace.

By examining these essential elements, businesses can develop more effective strategies, make data-driven decisions, and ultimately gain a competitive edge.

2. How, and how often, do you conduct a competitive analysis?

Conducting a competitive analysis involves identifying and analyzing the strengths and weaknesses of your competitors, evaluating their market position, and understanding their strategies and tactics.

The frequency of conducting a competitive analysis may depend on factors such as the industry, market conditions, and business goals. However, it is recommended to conduct a comprehensive analysis at least once a year or whenever there is a significant change in the market or competitive landscape.

To conduct a competitive analysis, businesses can use various tools and techniques such as SWOT analysis, market research, competitor benchmarking, and customer feedback analysis.

Gathering accurate and relevant data and interpreting it objectively is essential to gain valuable insights that can inform strategic decision-making and improve a business’s competitive position.

3. What are some tools or techniques for competitive analysis?

Various tools and techniques are available for conducting a competitive analysis, including SWOT analysis, market research, competitor benchmarking, and customer feedback analysis. SWOT analysis involves identifying a company’s strengths, weaknesses, opportunities, and threats relative to its competitors.

Market research can help businesses understand the size, growth, and trends in the market and gather information about customers and competitors.

Competitor benchmarking involves comparing a company’s performance against its competitors on key metrics such as pricing, quality, and customer satisfaction.

Customer feedback analysis can provide insights into customer preferences, needs, and perceptions of a company’s products or services compared to its competitors. Other tools and techniques may include social media monitoring, product analysis, and industry reports.

4. How do you use the insights from a competitive analysis?

The insights gained from a competitive analysis can inform strategic decision-making and improve a business’s competitive position. The analysis can help businesses identify their strengths and weaknesses compared to their competitors, evaluate market trends and opportunities, and understand customer preferences and perceptions.

Using these insights, businesses can develop strategies to capitalize on their strengths, address their weaknesses, differentiate their offerings, and improve their value proposition.

The insights can also help businesses identify potential threats and risks and develop contingency plans to mitigate them.

Overall, a competitive analysis can provide valuable insights to help businesses make informed decisions and improve their competitiveness in the market.

5. Experts' quotes on the big value of competitive analysis

If you love quotes from people who matter, here are a few about the incredible benefits of competitive analysis to any business of any size. These quotes have been handpicked because they seem to have the advantages down pat.

Jill Konrath

"Competitive analysis is a key component of any successful business strategy. By understanding your competitors, you can identify market trends, customer needs, and areas for improvement in your own products or services. It allows you to identify your unique value proposition and develop strategies to differentiate yourself from the competition. Competitive analysis also helps you anticipate and respond to changes in the market, ensuring that you stay ahead of the curve."

Peter Economy

"Competitive analysis is about understanding your competitors as well as you understand your own business. It's about seeing the world through your competitors' eyes, understanding their motives, and predicting their next moves. The insights you gain from competitive analysis can inform every aspect of your business, from product development and marketing to sales and customer service. By staying ahead of the competition, you can position yourself as a leader in your industry and build a sustainable competitive advantage."

The 8 steps to competitive analysis for your brand strategy

Here is my 8-step process to be used for competitive analysis. It works for both big and small brands. Following this process will ensure you have all the critical analysis points covered. 
8 Steps To Deep Competitive Analysis
(Please use this infographic with credits intact.) 

1. Identify your direct and indirect competitors in the market

What is the difference between direct and indirect competitors?

Direct competitors offer similar products or services to the same target market. They operate in the same industry and typically offer their customers similar features, benefits, and price points.

On the other hand, indirect competitors are businesses that offer products or services that are not precisely the same as the business in question but still compete for the same customers.

For example, a movie theater may have indirect competition from streaming services since both offer entertainment options to customers.

Understanding direct and indirect competitors is essential for conducting a comprehensive competitive analysis and developing effective strategies.

How to identify your direct and indirect competitors in the market

To identify direct competitors, here are ideas that businesses can deploy:

  • Businesses can start by defining their target market and their products or services. They can then conduct market research to identify other businesses that offer similar products or services to the same target market. This can involve reviewing industry reports, completing surveys, and analyzing customer reviews and feedback.
  • Businesses can look beyond their immediate industry and consider other products or services that compete for the same customer’s attention or budget. This can involve conducting a SWOT analysis to identify potential threats, reviewing market trends, and conducting customer research to identify alternative solutions that customers may be considering.
  • Analyzing customer behavior and purchasing patterns can be a valuable way to identify potential competitors that may not be immediately apparent. By gathering data on customer preferences, needs, and purchasing habits, businesses can gain insights into the broader market landscape and identify other businesses competing for the same customers.

The nuances between direct and indirect competition ... video!

This fine video from Solve It Like A Marketer discusses the nuances that can help you identify your direct and indirect competitors. Watch this because it may help solve any niggling doubts you may have.

2. Analyze your competitors' brand positioning and its power

What is brand positioning, and how does it differentiate a brand?

Brand positioning is the process of defining a brand’s unique value proposition and differentiating it from competitors in the minds of consumers.

It involves identifying the key benefits that a brand offers, such as quality, affordability, or innovation, and communicating these benefits in a way that resonates with the target audience.

Effective brand positioning helps to create a distinct identity for the brand, making it easier for consumers to understand what sets it apart from the competition.

By differentiating the brand, businesses can build stronger customer relationships, improve brand loyalty, and drive sales and revenue growth.

How do you analyze your competitors' brand positioning?

The following steps will help systematically analyze competitors’ brand positioning:

  • The first step is to conduct a perceptual mapping exercise. This involves visualizing how customers perceive different brands in the market based on factors such as price, quality, and customer service. By mapping out where competitors fall on this perceptual map, businesses can identify areas of overlap and opportunities to differentiate their brand in customers’ minds.
  • Second, consider the emotional appeal of your competitors’ brand positioning. Analyze the language, tone, and imagery they use to evoke emotions in their target audience. This can give you insights into what motivates their customers to buy and how you can create a similar emotional connection with your brand positioning.
  • Third, evaluate the consistency and coherence of your competitors’ brand positioning across different touchpoints, such as their websites, social media profiles, packaging, and advertising. This can help you understand how they create a consistent brand experience and how you can do the same for your brand.

Competitive positioning vs competitor positioning ... video!

In this very educative video from Brand Master Academy, you’ll look at what a positional map or perceptual map is and how it’s used to visualize your brand’s competitive landscape. You’ll also see the critical difference between competitive positioning and competitor positioning.

3. Evaluate your competitors' key strengths and weaknesses

What are the strengths and weaknesses to look for in any brand?

When evaluating a brand, there are several key strengths and weaknesses to look for.

Strengths include a unique value proposition, strong brand recognition and awareness, a loyal customer base, and a positive brand reputation.

Weaknesses can include a lack of differentiation from competitors, low brand recognition and awareness, negative customer perceptions, and weak brand management or marketing strategies.

Additionally, businesses should assess the brand’s performance across different channels and touchpoints, such as social media, customer service, and product quality, to identify areas for improvement and opportunities to strengthen the brand’s position in the market.

How to evaluate competitors' key strengths and weaknesses

Among the many ways to evaluate competitors’ key strengths and weaknesses are these:

  • Firstly, analyze their product or service offerings. Assess the quality, features, and benefits of their products or services and compare them to yours. Look for areas where they excel and fall short, such as product innovation, pricing, or customer service. This can help you identify opportunities for improvement and differentiation.
  • Secondly, evaluate their marketing strategy. Look at their advertising campaigns, social media presence, and content marketing efforts. Analyze their messaging, targeting, and engagement metrics to see what resonates with their audience and what does not. This can help you identify their strengths and weaknesses in brand awareness, customer engagement, and lead generation.
  • Thirdly, assess their brand reputation. Look for customer reviews, ratings, and feedback about your competitors’ brands. Analyze their feedback’s sentiment, frequency, and themes to see what customers appreciate about their brand and what they criticize. This can help you understand their strengths and weaknesses in brand loyalty, customer satisfaction, and reputation management.

Strengths and weaknesses of your brand vs. competitors ... video!

As this video from OnStrategy says, “A competitive advantage is what makes your organization unique. In the end, focusing and capitalizing on these advantages is vital toward the overall goal of “winning.” Learning to know your brand’s strengths and weaknesses can also show you how to evaluate competitors.

4. Assess your competitors' reach via marketing strategies

What is marketing reach? How is it measured?

Marketing reach refers to the number of people exposed to a marketing message or campaign.

It measures the potential audience a marketer can reach through various channels such as social media, email marketing, print media, TV, or radio.

Marketing reach can be measured using various metrics, such as impressions, clicks, views, or unique visitors. These metrics help marketers determine their marketing efforts’ effectiveness and identify improvement areas.

By increasing their marketing reach, businesses can increase brand awareness, generate more leads, and drive more sales.

What are the ways to assess competitors' reach in marketing?

Here are three ways to assess competitors’ reach in marketing:

  • Firstly, use online tools to monitor their website traffic and social media engagement. Tools such as Alexa, SimilarWeb, or SEMrush can provide you with data on your competitors’ website traffic, organic and paid search rankings, and social media followers. This can give you insights into their audience size, demographics, and engagement level and help you identify their most effective marketing channels.
  • Secondly, analyze their advertising and promotional campaigns. Look for their ads on different channels, such as TV, radio, print, or social media. Pay attention to their targeting, messaging, and call-to-action to understand how they try to attract their audience. Use tools like Adbeat, AdEspresso, or AdSpy to monitor your competitors’ ad campaigns and get insights into their targeting strategies, ad creatives, and budget.
  • Thirdly, conduct surveys or focus groups to gather feedback from your competitors’ customers. Ask them about their experience with your competitors’ products or services, how they found out about them, and what they like or dislike about their brand. This can help you understand your competitors’ strengths and weaknesses regarding product quality, customer service, or brand reputation. You can also ask them about their perception of your brand and how it compares to your competitors.

Assess competitors' market share (a result of their reach)... video!

The idea of market share is allied with the concept of marketing reach. How far does a brand reach as a proportion of the total market available? That is its market share. In this video by the Marketing Business Network, you can learn how market share is calculated to understand how far away your brand is from its competitors.

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5. Study your competitors' pricing strategies and flexibility

When is it smart to overprice or underprice competitors?

Pricing strategies can significantly impact a business’s revenue, profitability, and market share. Depending on the business’s goals, target audience, and competitive landscape, it may be wise to overprice or underprice competitors.

For instance, overpricing may be suitable for businesses that aim to position themselves as premium brands, offer high-quality products or services, or have less price-sensitive target customers.

Underpricing, on the other hand, may be effective for businesses that want to gain market share, undercut their competitors’ prices, or target price-sensitive customers.

Ultimately, the decision to overprice or underprice competitors should be based on a thorough analysis of market demand, production costs, customer value, and competitive positioning and should be aligned with the overall business strategy.

What are the main points to analyze about competitors' pricing strategies?

Here are three main points to analyze about competitors’ pricing strategies:

  • Firstly, analyze their pricing structure. Look at the prices of their products or services and how they are positioned in the market. Evaluate the pricing model they use, such as cost-plus, value-based, or competitor-based pricing. This can give you insights into how they determine their pricing and how it compares to your own pricing structure.
  • Secondly, evaluate their discounts and promotions. Look for any seasonal discounts, special offers, or loyalty programs they offer to their customers. Analyze the effectiveness of their discounting strategy and how it affects their sales and revenue. This can help you determine whether you should offer similar promotions or develop a different pricing strategy.
  • Thirdly, assess their perceived value. Analyze how their target audience perceives the value of their products or services. Look at the quality, features, and benefits they offer, as well as any unique selling points that set them apart from others. This can help you understand their competitive positioning and identify areas for differentiation. You can also compare the perceived value of their offerings to the prices they charge to determine whether they are overpriced or underpriced relative to the market.

Your competitor may use one of these 7 pricing strategies... video!

Whether it’s your brand you want to price correctly or you want to check your competitors’ pricing strategies, it helps to know what the many options are. Go through this video primer, by, on pricing to evaluate your competitor’s mindset.

6. Evaluate your competitors' chosen distribution channels

What are distribution channels and why should we get the mix right?

Distribution channels refer to the methods or channels through which businesses deliver their products or services to their target customers. They can include direct sales, wholesalers, retailers, e-commerce platforms, and other intermediaries.

Getting the distribution channel mix right is essential because it can impact a business’s market coverage, profitability, and customer satisfaction.

The right mix of distribution channels can ensure that products or services reach the target customers at the right time, place, and price and can help businesses reduce distribution costs, improve brand visibility, and enhance customer experience.

By understanding the needs and preferences of their target customers, businesses can choose the most appropriate distribution channels and create a seamless and efficient distribution strategy.

How can we outdo competitors' on their distribution channel mix?

Here are three ways to achieve this:

  • Firstly, analyze your competitors’ distribution channels and identify any gaps or underserved customer needs. Look for opportunities to offer your products or services through channels your competitors have not yet explored, such as niche retailers, online marketplaces, or social media platforms. This can help you expand your reach, increase your market share, and better serve your target audience.
  • Secondly, focus on creating a seamless and efficient distribution strategy. Evaluate your supply chain management, logistics, and fulfillment processes to ensure that your products or services reach your customers on time, in the right quantity and quality, and at a reasonable cost. Use technology tools such as inventory management systems, shipping software, or order tracking tools to streamline your distribution process and enhance your customers’ experience.
  • Thirdly, differentiate your brand by offering value-added services or experiences through your distribution channels. For instance, you can offer personalized recommendations, free samples, or exclusive deals through your website or social media pages. You can also partner with influencers or brand ambassadors to promote your products or services through their channels. This can help you create a loyal customer base, enhance your brand reputation, and attract new customers.

Relook at distribution channels (yours and competitors') ... video!

This is an excellent video from Leaders Talk on the Starbucks case study on distribution channels. All I can say is that it’s a very eye-opening video, even if you think you know the topic.

7. Analyze customer feedback on your competitors' brands

What is the value of feedback to a brand, even if it's bad?

Even if it’s terrible, feedback is valuable to a brand as it provides insights into how customers perceive the brand, its products or services, and its customer service.

Negative feedback can help businesses identify areas for improvement, such as product quality, pricing, or customer service, and take corrective actions to address them. It can also help businesses understand their target audience better, their needs and preferences, and adjust their marketing and communication strategies accordingly.

Furthermore, responding to negative feedback in a timely and empathetic manner can help businesses build trust, loyalty, and reputation among their customers and turn a negative experience into a positive one.

By embracing feedback, businesses can learn from their mistakes, innovate, and stay relevant in a constantly evolving market.

How can you assess your competitors' feedback as a competitive strategy?

Here are three ways to assess your competitors’ feedback as a competitive strategy:

  • Firstly, monitor customer reviews and feedback about your competitors’ brands, products, or services on social media, review sites, or customer forums. Analyze the sentiment, frequency, and themes of the feedback to understand what customers like or dislike about their offerings. This can help you identify areas of improvement or differentiation for your own brand, as well as develop a more compelling value proposition and messaging strategy.
  • Secondly, evaluate your competitors’ responses to negative feedback. Look at how they handle customer complaints, inquiries, or feedback, and how they communicate with their customers in a timely and empathetic manner. Analyze their customer service processes and the tools they use to manage feedback, such as chatbots, email, or phone support. This can give you insights into their customer service quality, brand reputation, and customer retention strategy, and help you develop a more effective feedback management system for your own brand.
  • Thirdly, use feedback analytics tools to analyze the feedback data of your competitors. Tools such as Sprinklr, Brand24, or Mention can help you gather, analyze, and visualize customer feedback from various sources, such as social media, review sites, or surveys. This can give you a comprehensive view of your competitors’ feedback and help you identify patterns, trends, and insights that can inform your competitive strategy. You can also track your competitors’ sentiment score, customer engagement metrics, and share of voice to benchmark their performance and compare it to your own.

The value of customer feedback in competitive analysis ... video!

This is one of Riccardo Osti‘s best videos on why customer feedback is so important. But, as Riccardo says, “This source of information is rich in insights but comes in different forms, and it’s often unstructured. This makes it difficult to interpret at scale.” Learn how to assess customer feedback accurately … yours and your competitors.

8. Develop a SWOT analysis on each of your competitors

What is a SWOT Analysis and why do you need to do one?

A SWOT analysis is a structured approach to evaluate a business’s internal and external environment, focusing on four key elements: Strengths, Weaknesses, Opportunities, and Threats.

Strengths and weaknesses are internal factors that reflect the business’s capabilities and limitations, such as its resources, processes, and culture.

Opportunities and threats are external factors that reflect the market and competitive environment, such as emerging trends, new entrants, or changing customer preferences.

By analyzing these four elements, businesses can better understand their competitive position, market potential, and growth opportunities and develop a strategic plan that aligns with their overall vision and goals. A SWOT Analysis of each competitor can offer a quick snapshot of their market position.

Key factors for a sound SWOT analysis of competitive brands

Here are three factors that contribute to a good SWOT analysis:

  • Comprehensive Data Collection: A good SWOT analysis requires a comprehensive and reliable data collection process. This includes gathering information from various sources, such as market reports, industry publications, financial statements, and customer feedback. It is essential to use reliable data sources and ensure that the data is up-to-date, relevant, and unbiased. 
  • Thorough Analysis: A good SWOT analysis requires a thorough and objective analysis of the data collected. This includes evaluating the data against the four elements of SWOT analysis – strengths, weaknesses, opportunities, and threats. It is essential to analyze the data from multiple perspectives and seek diverse opinions to ensure a comprehensive view of the competitive landscape. It is also important to identify the relationships between different elements and how they impact each other.
  • Strategic Planning: A good SWOT analysis is only useful if it leads to strategic planning and action. Once you have identified your competitors’ strengths, weaknesses, opportunities, and threats, it is essential to develop a strategic plan that leverages your strengths, addresses your weaknesses, capitalizes on opportunities, and mitigates threats. The plan should be adaptable to changing market conditions and align with your overall vision and goals.

You've heard of SWOT but there's also TOWS analysis ... video!

This is a terrific video from Ian Johnson on how the SWOT Analysis that we all are reasonably familiar with can become be moved into an action plan if we do the TOWS Analysis. See how!

To find a special gift waiting for you on this page, click the button below to take a peek, before you read on … 

FAQs and answers on the implementation of competitive analysis

Some of the most commonly asked questions on competitive analysis are listed below … with their quick answers. These are good extra angles to understand and exploit the power of competitive analysis for your business.

1. What are some mistakes to avoid in competitive analysis?

One mistake is to focus solely on direct competitors and overlook indirect competitors or new entrants to the market. Another mistake is only analyzing competitors’ strengths and weaknesses without considering the market trends and external factors that can impact the industry. Additionally, relying on outdated or incomplete information can lead to inaccurate analysis and flawed decision-making. Finally, it is essential to avoid confirmation bias and remain objective when interpreting the data and drawing conclusions.

2. Can competitive analysis help anticipate future trends?

Yes, competitive analysis can help anticipate future trends. By closely monitoring and analyzing competitors’ strategies, products, and services, businesses can gain insights into emerging trends and shifting consumer preferences. Competitive analysis can also reveal gaps in the market that present opportunities for innovation and growth. Additionally, by staying up-to-date on industry news and developments, businesses can anticipate changes in the market and adjust their strategies accordingly. 

3. How to take care of ethical issues in competitive analysis?

Adherence to ethical principles and guidelines is essential to take care of ethical issues in competitive analysis. This includes being transparent about the information being collected and the purpose for which it will be used and obtaining consent from individuals when necessary. It is also essential to ensure the analysis is conducted fairly and unbiasedly without misrepresenting or manipulating data. Additionally, businesses should avoid engaging in unethical practices such as stealing or unlawfully accessing competitors’ confidential information.

4. How do you stay up-to-date with competitors' strategies?

Staying up-to-date with competitors’ strategies requires active monitoring and analysis. This can involve regularly scanning industry news and publications, monitoring competitors’ social media and web presence, attending industry events and conferences, and conducting periodic audits of competitors’ marketing and product strategies. It can also use specialized tools and software to track competitor website changes, keyword rankings, and social media activity. 

5. How do you measure the success of competitive analysis?

One KPI is the ability to identify and respond to emerging trends and changes in the market, which can help businesses stay ahead of the competition. Another KPI is gaining a competitive advantage through improved products, services, or marketing strategies. Additionally, businesses can measure the effectiveness of their competitive analysis by tracking metrics such as market share, customer retention rates, and customer satisfaction scores, as well as revenue and profit growth over time.

Pro tips to take away in summary ...

1. Analyzing competitors is a crucial aspect of brand strategy, which enables businesses to remain competitive. By examining the strengths and weaknesses of their rivals, companies can uncover chances to distinguish themselves in the market, establish distinctive value propositions, and gain deeper insights into their target audience.

2. In today’s fiercely competitive business landscape, comprehending your competition is crucial. Without an accurate assessment of your industry rivals, it’s challenging to distinguish your brand and engage your target market. Competitive analysis highlights your competitors’ strengths and weaknesses, enabling you to leverage their shortcomings and differentiate yourself in your areas of expertise.

3. Businesses can better understand their target audience’s priorities and adjust their brand strategy by examining competitors and scrutinizing their customer reviews, social media sentiment, and other consumer behavior indicators.

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