What Is Competitor Analysis? Definition + Step-by-Step Guide

What is a competitor analysis?

A competitor analysis, also called competitive analysis and competition analysis, is the process of examining similar brands in your industry to gain insight into their offerings, branding, sales, and marketing approaches. Knowing your competitors in business analysis is important if you’re a business owner, marketer, start-up founder, or product developer.

Benefits of conducting competitor analysis

A competitor analysis offers several benefits, including: 

• Understanding industry standards so that you can meet and exceed them   

• Discovering untapped niche markets  

• Differentiating products and services

• Fulfilling customers’ desires and solving their problems better than competitors

• Distinguishing your brand

• Standing out in your marketing 

• Measuring your growth 

How to do competitor analysis 

The sections below provide a competitor analysis framework for evaluating your industry’s competitive landscape. Return to this framework regularly and apply insights to developing your business.

1. Find out who your competitors are. 

Start by reviewing any notes, plans, or other business development legwork you’ve completed and ground yourself in your business values, goals, branding, products, and services. That way, you can easily identify existing brands that target customers might choose over yours.  

Next, gather information on the following:

• High-volume keywords (or search queries) that your target market uses to find information related to your products and services

• URLs that appear at the top of search engine results pages (SERPs) for these keywords

• Social media accounts that come up in searches for relevant hashtags or keywords

Using the information you gathered, list up to 10 brands whose offerings most resemble yours and would present your target customers with comparable alternatives. Pull up competitors’ websites, social media accounts, and other publicly available information, and have this information handy for the steps that follow.

2. Analyze your competitors and their business structures. 

For publicly traded companies, you may be able to review their annual reports and gain insight into how much revenue they’re generating, their debt and liability, and other performance metrics.

By examining how competitors structure their businesses, you can gauge how equipped they are to grow, gain market share, and earn customer loyalty in your target market. Review each competitor’s website and social media profile to gather the following information: 

• How large is the company in terms of the number of leaders and employees?

• How many years has the company been in operation? 

• What job openings do these companies list on Glassdoor, Indeed, or LinkedIn?  What are their areas of expansion?

3. Evaluate competitors’ value propositions. 

A value proposition is a short statement that summarizes a product's benefits and why a customer would choose it over competing products. A value proposition often reads something like the following: We help [target customer] do [outcome, benefit, experience] by doing / offering [product or service].  

In this section, you will find or deduce competitors’ value propositions to compose your value proposition to stand out in the marketplace. Review competitors’ site copy, particularly on the "About" or What We Do" pages, as well as taglines or slogans posted on a home page or social media profile. Answer these questions for each competitor: 

• What problems and pain points do competitors’ products solve? 

• What desires do products fulfill? 

• What benefits or outcomes are explicitly stated? 

• What data do they cite to support their claims about products’ benefits?

• What pricing structure do competitors use, and how are customers responding? 

4. Evaluate competitors’ marketing efforts.

In this section, you will evaluate how competitors position themselves in the marketplace. This will allow you to create a marketing strategy that gets your brand in front of your target audience. 

For each competitor, answer these questions: 

• What social media influencers does this company partner with to leverage their authority, authentic content, and personal connections to target customers?  

• What affiliate marketing or brand ambassador programs does this company offer to leverage the recommendations of satisfied customers? 

• What kind of digital or traditional paid advertising presence does this company have?

• On what marketing channels do competitors publish organic content, including websites, landing pages, social media platforms, and email? 

• What type of content do you see, including articles, videos, ebooks, reports, commercials, and digital ads?  

5. Audit competitors’ brand identities.

In this section, you will learn your competitors’ brand identities to understand the customer experiences they’ve created. 

For each competitor, answer these questions: 

• If this company were a person, how would you describe its personality? 

• What words, phrases, tone, and style does this company use in its messaging?  

• What values do competitors communicate through their messaging? 

• How would you describe the visual elements of this company’s branding? And how do those elements correspond to the brand’s values, voice, and personality? 

• What emotions do the brand elements evoke in customers? 

6. Follow each competitor’s customer journey. 

Study the customer journeys competitors have set up to nurture and convert customers. Your goal is to gauge how seamless, integrated, and logical it is to go from the first touchpoint to making a purchase and beyond.   

Start by following your competitors on social media, subscribing to them via email, and purchasing products and services to experience each customer journey for yourself. 

As you experience the customer journey for each competitor, gather information on the following: 

• What are the different touchpoints along this company’s customer journey?

• What elements make it easy to keep moving along the customer journey? 

• What calls to action and instructions are there to make it clear how to proceed?

• What kinds of content educate and entertain you at each touchpoint?

• What elements create friction or make it difficult to advance to the next step?

• What do you experience after subscribing or making a purchase? Do you find customer support, upsells, and access to a community? 

7. Examine audience engagement. 

In this step, you will scour competitors’ customer reviews, reactions, and comments on their social media posts, social media mentions, media appearances, and even employee reviews on job sites to understand the perception of competitors in the marketplace. With this information, you can strategize how to garner a positive reputation for your brand, learn from competitors’ mistakes and challenges, and work to avoid any pitfalls yourself. 

For each competitor, explore the following:

• How do followers and subscribers interact with this company’s public content?

• What is the general public sentiment regarding this company, based on mentions, product reviews, and social media likes and comments? Include praise as well as complaints. 

• What experiences do employees have based on reviews on job sites like Glassdoor and Indeed? 

Share of voice measures how much of the market your brand owns compared to competitors. By determining the share of voice, you can gauge how visible, authoritative, and popular your brand is in the marketplace.

8. Conduct a SWOT Analysis of your competition.

A SWOT analysis is a classic exercise for identifying the strengths, weaknesses, opportunities, and threats that exist within the competitive landscape. In this section, you’ll conduct a SWOT analysis of competitors to consolidate everything you’ve learned into a succinct story about your competitive position.    

• What strengths recur across competitors’ branding, marketing, customer journeys, and products?

• What weaknesses recur across competitors’ branding, marketing, customer journeys, and products?

• What opportunities do you see for your business to capitalize on?

• What is your competition doing that might pose a threat to your business?

You can also list the strengths and weaknesses of your business as it currently stands and compare them side-by-side with those of competitors. 

For more on SWOT analysis, watch this video from the Business Strategy Specialization:

How to use competitor analysis 

Once you’ve conducted a competitor analysis, your next step is to apply the insights to your business. Use the following prompts to differentiate your brand, products, and services from competitors and gain market share:

1. What product features can you add that improve on competitors’ offerings?

2. What pricing strategy can you use to attract new customers to your offerings?

3. What design features can you add to your brand to make it stand out?

4. How can you compose a value proposition that stands out from competitors? We help [target customer] do [outcome, benefit, experience] by doing / offering [product or service].  

5. How can you design a more seamless, frictionless customer journey that leads consumers to make a purchase and become loyal brand ambassadors? 

6. How can you create content that improves on that of your competitors, including covering new topics, addressing ignored pain points, recommending new solutions, and offering more exciting experiences?  

7. What approaches can you take on marketing channels where your competitors have a presence to distinguish your messaging and present your offerings as the best choice?

8. On which marketing channels do your competitors not (yet) have a presence? What steps can you take to establish and grow a presence on those channels? 

Competitor analysis key takeaways and best practices 

Remember: Conducting a competitor analysis is crucial in developing your business. It can help you differentiate your brand and present your products and services as the best on the market. Return to your competitor analysis efforts regularly, such as every quarter, six months, or year, to account for shifts in competitors’ tactics and new competitors that arrive on the scene. Always look for ways to give your brand and its products a competitive edge. 

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