What is a competitive analysis – and how do you carry it out?

Every time I work with a new brand, conducting a competitive analysis is one of my top priorities.

A competitive analysis report helps me understand the brand’s position in the market, identify competitors’ strengths/weaknesses and discover growth opportunities.

In this article, I will break down the steps I follow to conduct competitive analysis and find ways to outperform top brands in the market.

Table of contents

What is a competitive analysis?

Competitive analysis compares your competitors with your brand to understand their key differentiators, strengths and weaknesses. It’s a detailed breakdown of each competitor’s market position, sales and marketing tactics, growth strategy, and other business-critical aspects to see what they’re doing right and find opportunities for your business.

Competitive analysis gives you a clearer picture of the market landscape to make informed decisions for your growth.

However, you must remember that competitive analysis is an opportunity to learn from others. It is not:

• Copy successful competitors to a T.
• Attempting to undercut other people’s prices.
• A unique exercise.

Let’s look at how this exercise can help your business before breaking down my 5-step competitive analysis framework.

Why do a competitor analysis?

If you’re unsure whether to invest time and effort into analyzing your competitors, know that doing so will give you a complete picture of the market and your position in it.

Here are six main reasons I conduct a competitive analysis when working with a brand for the first time.

1. Find out the strengths and weaknesses of competitors.

What are your competitors doing right to drive growth? When you analyze the characteristics of an industry leader, you will learn what they did well to achieve the top position in the market.

By looking at competitors’ strengths and weaknesses, you can identify opportunities for your own company.

Personally, I love analyzing the strengths of competitors. It’s easy to become short-sighted when you only look internally at your website, marketing, and company. Competitor analysis will open your eyes to what the market is up to, what looks good, works well, and would benefit your business.

Competitors’ weaknesses are of equal importance, especially if the competitor is very ambitious and you would like to get where they are. Analyze areas where they are deficient and develop a plan to avoid making the same mistakes.

Pro tip: Look at company and product reviews to find the weaknesses that bother your audience the most. Commonalities can be used in marketing messages to convince people to try you instead, or you can go into product development knowing exactly what problem needs to be solved.

2. Identify opportunities.

Conducting a competitor analysis can be extremely beneficial for brands. It can be a cost-effective way to identify many opportunities to improve your business.

As an example of opportunities you may find, you can get an idea of ​​messaging that works by analyzing what your competitors say about their products or unique selling points. This information could inspire your marketing.

Rachel Andrea Go is a marketing manager who uses Competitor analysis to learn what messages resonate with their audience. She recommends: “Instead of saying, ‘Best project management software,’ one of your competitors might say, ‘Get your time back by letting our software manage your projects.'”

“By calling their software “time-saving,” your competition is positioning their software not only as a solution for project managers, but also as a way to save time.

“Look at the language they use on their websites, landing pages and social media posts to communicate their unique selling points, and pay attention to how their followers react.”

There are tools available to help you thoroughly analyze a competitor. I do a lot of digital competition analysis. In most cases, just through competitor analysis alone, I can find so many opportunities that I could employ my client’s team Months.

Top tip: It’s easy to get carried away with competitor analysis and lose sight of what really matters and drives your business. Don’t get too caught up in shortening the gap to the competition. You need to keep an eye on your business at all times. Do the analysis but think carefully about the opportunities you will take advantage of. They must be a) suitable for your company and b) likely to make a difference.

3. Identify your differentiators.

Think of competitor analysis as a chance to think about your own business and figure out what sets you apart from the crowd.

There is no doubt that there will be some key differentiators between your business and your competitors. Many will do it for good reason, and you’ll be glad to see it.

However, if you keep an open mind as you conduct your analysis, there’s a good chance you’ll find differentiators in the messaging, word choice, and unique selling points that may make you think differently about your own business.

Top tip: You should be fairly strategic in your competitor analysis. It’s common for brands to focus on the most ambitious competitors, but you need to be honest with yourself and consider your market position. Don’t be afraid to dream big, compare the analysis of the biggest players with some that are closer to your company.

5. Get closer to your target group.

A good competitor analysis framework focuses on your target group. It gives you an overview of your customers by assessing what they like, what they don’t like, what they prefer, and what they complain about when evaluating competing brands.

You can find out how your audience talks about competitors, what they love so you can emulate them when it makes sense, and what they loathe so you can avoid them or use them to your advantage.

Top tip: Social media, forums, and review sites are great sources of qualitative data that can help you learn your audience’s feelings in their own words.

6. Discover new competitors.

That might sound backwards. Don’t you need your competitors before you can start competitive analysis? Well yes… and no.

As mentioned above, I’ve seen many brands fall into the trap of analyzing emerging competitors and miss out on brands that are attracting their audience and doing business where they should be.

Dan White is an SEO consultant who carries out competitive analysis for its clients. White says, “One of the big things I focus on is who (my clients) share similar keywords with.” It opens their eyes to understanding who they think their competitors are and who their competitors are , which at Google are two very different things.”

White makes an excellent point. When it comes to digital competitor research, SEO, and content, I often refer to competitors as “business competitors” and “content competitors.”

Think of your competitors as the companies that do the same type of work as you, the companies that you might be losing business to. However, content competitors may serve your audience online, bring them into communities, or offer alternative solutions that could make you forget.

In a digital world, it is almost impossible to know who all your competitors are, and local competitors may not be the only competitors you should keep an eye on.

7. Set benchmarks for success.

A competitor analysis gives you a realistic idea of ​​how to map your progress against success metrics. While every business has its own path to success, you can always take a look at a competitor’s performance to assess whether you’re on the right track.

Top tip: If you have the privilege of checking in regularly, such as quarterly, every six months, or even every year, you can jot down some KPIs to monitor business growth. I do a competitor analysis for my clients about every year. You can compare reports with previous years to track the development of everyone involved.

The conclusion: Whether you’re starting a new business or revamping an existing one, a competitive analysis takes away guesswork and gives you concrete information to develop your business strategy.

What is competitive market research?

Competitive market research is an important task that goes beyond simply comparing products or services. This is an in-depth analysis of the market metrics that differentiate your offerings from those of your competitors.

Thorough market research not only highlights these differences, but also leverages them, laying a solid foundation for a sales and marketing strategy that will truly set your business apart from the competition in a busy market.

In the next section, we’ll cover the basics of a detailed competitive analysis tailored to your brand.

Essential aspects that need to be addressed in competitive analysis research

Before we go through our step-by-step process for conducting a competitor analysis, let’s take a look at the key aspects to consider with each competitor:

• Overview. A summary of the company – location, target market and target group.
• Primary offer. A breakdown of what they sell and how they compare to your brand.
• Pricing strategy. A comparison of their prices for various products with your prices.
• Positioning. An analysis of their core messages to see how they position themselves.
  Customer Feedback: A compilation of what customers say about the brand.

Now it’s time to learn how to conduct a competitive analysis using an example to contextualize each step.

Competition analysis in marketing

Every brand can benefit from regular competitor analysis. By conducting a competitor analysis you can:

• Identify gaps in the market.
• Develop new products and services.
• Discover market trends.
• Market and sell more effectively.

As you can see, learning any of these four components will set your brand on the path to success.

Next, let’s dive into some steps you can take to conduct a comprehensive competitive analysis.

How to Conduct a Competitor Analysis in 5 Quick Steps

As a content marketer, I have conducted competitive analysis for several brands to improve their messaging, plan their marketing strategy, and explore new channels.

The good news for the most savvy marketers is that competitor analysis is becoming easier and less time-consuming. Accordingly HubSpot’s 2024 State of Marketing ReportAI helps significantly in research. 33% ranked it #1, ahead of context creation (31%) and data analysis and reporting (30%).

Here are the five quick steps I follow to analyze competitors. For more steps, see the next section where I share even more.

1. Identify and categorize all competitors.

The first step is simple but strategic. You need to identify all possible competitors in your industry, even the lesser-known ones. The goal is to know all the players in the market instead of arbitrarily ignoring a few.

As you find more and more competitors, categorize them into these categories:

• Direct competitors. These brands offer the same product/service to the same audience as you. When making a purchasing decision, you will often be compared to these brands. For example, Arcade and Storylane are direct competitors in the demo automation category.
• Indirect competitors. These companies solve the same problem but with different solutions. They offer you the opportunity to expand your offering. For example, Scribe and Whatfix solve the problem of documentation + internal training, but in different ways.
• Legacy competitors. These are established companies that have been active in your industry for several years. They enjoy a good reputation in the market and are a trusted name among customers. Ahrefs, for example, is an old competitor in the SEO industry.
• Emerging competitors. These are new entrants with an innovative business model and unique value propositions that pose a threat to existing brands. ChatGPT, for example, proved to be a disruptor in the conversational AI space, outperforming several brands.

Here is a competitive matrix that classifies brands in community and living space:

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Test it

To help you understand each step clearly, we will use Trello as an example and create a competitive analysis report based on these steps.

Here is a table of the main competitors for Trello:

Type of competitors	Names of competitors
Direct competitors	Asana, Basecamp, Monday.com, MeisterTask
Indirect competitors	Slack, introduction, coda
Legacy competitors	Microsoft Project, Jira
Disruptor competitors	ClickUp, Airtable

2. Determine the market position of each competitor.

Once you know all your competitors, start analyzing their market position.

This step will help you understand where you currently stand in terms of market share and customer satisfaction. It also reveals the big players in your industry – the leading competitors that you should prioritize in your analysis report.

In addition, the visualization of the market landscape tells you what is missing in the current state. Even in a saturated market, you can find gaps and opportunities for your brand to thrive.

To map competitors’ market positions, create a chart with two factors: market presence (Y-axis) and customer satisfaction (X-axis). Then place participants in each of these quadrants:

• Niche. These are brands with a small market share, but which have a high priority in terms of customer satisfaction. They’re probably targeting a specific audience segment and doing it well.
• Competitors. These brands rank low in customer satisfaction but have a good market presence. They may be new entrants with a strong sales and marketing strategy.
• Management. These brands own a large market share and have highly satisfied customers. They are the dominant actors with a good reputation among your audience.
• Achievers. This is another category of new entrants that score high in customer satisfaction but have a low market share. They are a good alternative for people who don’t want to buy from big brands.

This visualization shows you exactly how crowded the market is. But it also shows opportunities to gain momentum and compete with existing brands.

Test it

Here is a market landscape grid from G2 documenting all of Trello’s competitors in the project management space. For a leading brand like Trello, the goal would be to look at top brands in two quadrants: Leader and High Performer.

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3. Extensive benchmarking of key competitors.

Step 2 will narrow your focus from dozens of competitors to the most important few to target. Now is the time to thoroughly research each competitor and create a benchmarking report.

Remember that this exercise is not intended to identify deficiencies in every participant. You must objectively determine both the good and bad aspects of each brand.

Here are the key factors to consider when benchmarking competitors:

• Quality. Evaluate the quality of each competitor’s products/services. You can compare product features to see what gives them an advantage over you. You can also evaluate customer reviews to understand what users say about the quality of their offering.
• Price. Document the price points for each competitor to understand their pricing tactics. They can also survey their customers to determine value for money from a user perspective.
• Customer service. Check how they provide support – via chat, phone, email, knowledge base, and more. You can also find customer reviews on various third-party platforms.
• Brand reputation. You should also compare the reputation of each competitor in the market to understand how the brand is perceived by people. Pay attention to anything critical people say about certain competitors.
• Financial health. Where possible, look for performance indicators to assess a brand’s financial progress. You will find data on metrics such as sales growth and profit margins.

This benchmarking exercise involves a combination of primary and secondary research. Invest enough time in this step to ensure that your competitive analysis is completely sound.

Check out this example of a competitive benchmarking report for workforce intelligence tools:

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Test it

Here’s how I benchmarked Asana using these criteria and the information I could find:

Criteria	Asana
Quality	Over 100 integrations Automation rules AI capabilities for project management Kudos for the user-friendly interface
Price	Offers a free tier and paid plans starting at $10.99/month per user. Advanced features and integrations are available at higher prices.
Customer service	Live chat Telephone support Ticket based support Tutorials in Asana Academy Knowledge base and community forum
Brand reputation	Considered one of the best project management tools with a slightly more robust feature set compared to competitors.

4. Dive deep into your marketing strategy.

While the initial steps show you what you can improve about your core product or service, you also need to figure out how competitors market their products.

You need to delve deeply into their marketing strategies to understand how they appeal to buyers. I analyze each marketing channel and then note my observations on how they engage their audience and highlight their brand personality.

Here are some key marketing channels to explore:

• Website. Analyze the website structure and copy to understand its positioning and brand voice.
• E-mail. Subscribe to emails to know their rhythm, text style, content covered and other aspects.
• Paid ads. Use tools like Ahrefs and SEMrush to find out if a competitor is running paid ads on search engines.
• Thought leadership. Track a brand’s thought leadership efforts with content assets like podcasts, webinars, courses, and more.
• Digital PR. Find out if a brand is investing in digital PR to promote their business and analyze their strategy.
• Social media. See how actively brands use different social channels and what type of content works best for them.
• Partnerships. Analyze high-value partnerships to determine whether brands work closely with companies and benefit each other.

You can create a detailed document that captures every detail of a competitor’s marketing strategy. This will give you the right direction for planning your marketing efforts.

5. Conduct a SWOT analysis.

The final step of a competitive analysis is to create a SWOT analysis matrix for each company. This means taking note of your competitors’ strengths, weaknesses, opportunities and threats. Think of it as the final step in consolidating all your research and answering these questions:

• What does your competitor do well? (products, content marketing, social)
• Where do they have an advantage over your brand?
• What is your competitor’s weakest area?
• Where does your brand have an advantage over your competitor?
• In what areas would you consider this competitor a threat?
• What could competitors do better?
• Are there opportunities in the market that your competitor has identified?

You can compare their weaknesses with your strengths and vice versa. This way, you can better position your business and begin to uncover opportunities for improvement within your own brand.

You can use tools like Miro to visualize this data. Once you visualize this data, you’ll have a clearer idea of ​​where you can outperform each competitor.

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Test it

Here is a SWOT analysis matrix I created for Asana as a competitor to Trello:

How to Conduct a Competitor Analysis (Extended Cut)

1. Determine who your competitors are.
2. Find out what products your competitors offer.
3. Research your competitors’ sales tactics and results.
4. Check out your competitors’ prices and the perks they offer.
5. Make sure you maintain competitive shipping rates.
6. Analyze how your competitors market their products.
7. Pay attention to your competition’s content strategy.
8. Learn what technology stack your competitors are using.
9. Analyze the level of engagement with your competitors’ content.
10. Watch how they promote marketing content.
11. Check out their social media presence, strategies and go-to platforms.
12. Conduct a SWOT analysis to know your strengths, weaknesses, opportunities and threats.

To conduct a complete and effective competitive analysis, use these ten templates, whose purpose ranges from sales to marketing to product strategy.

Recommended Resource: 10 Competitive Analysis Templates

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1. Determine who your competitors are.

Take the first step from the top; You need to find out who you are competing with in order to accurately compare the data.

Keep an eye on these brands as they can change position at any time and enter the direct competition zone. Using our example, Stitch Fix could launch a training line, which would certainly be a game-changer for Fabletics.

This is also one of the reasons why you should regularly conduct a competitor analysis. The market can and will change at any time, and if you don’t monitor it constantly, you won’t notice these changes until it’s too late.

2. Determine what products your competitors offer.

You want to analyze your competitor’s entire product range and the quality of the products or services they offer. You should also pay attention to their prices and any discounts they offer to their customers.

Questions to consider include:

• Is it a low-cost or high-cost provider?
• Do they work primarily on volume sales or one-time purchases?
• What is their market share?
• What are the characteristics and needs of your ideal customers?
• Do they use different pricing strategies for online purchases compared to brick-and-mortar stores?
• How does the company differ from its competitors?
• How do they sell their products/services?

3. Understand your competitors’ sales tactics and results.

Conducting a sales analysis of your competitors can be a bit tricky.

You want to find answers to questions like:

• What does the sales process look like?
• What channels do you sell through?
• Do they have multiple locations and what advantage does that give them?
• Are they expanding? Reduction?
• Are there resale programs for partners?
• What are your customers’ reasons for not buying? For terminating their relationship with the company?
• How much do you earn per year? What about the overall sales volume?
• Do they regularly discount their products or services?
• How involved is a seller in the process?

This helpful information will give you an idea of ​​how competitive the sales process is and what information you need to prepare your sales reps to compete in the final buying phase.

For publicly traded companies, you can find annual reports online, but you’ll need to do some research to find this information from private companies.

You can find some of this information by searching your CRM and reaching out to the customers who have mentioned they are considering your competitor.

Find out why they chose your product or service over others.

When a competitor is identified, let your sales team dig deeper and ask why they are considering switching to your product. If you have already lost the deal, be sure to contact the prospect to find out why you lost to your competitor.

4. Look at your competitors’ prices and the perks they offer.

There are a few important factors that go into pricing your product correctly – and one of the most important is understanding how much your competitors are charging for a similar product or service.

If you believe your product offers superior features compared to those of a competitor, you might consider making your product or service more expensive than industry standards.

However, if you do this, you should make sure your sales reps are prepared to explain why your product is worth the additional cost.

Alternatively, you may feel like there is a gap in affordable products in your industry. If that’s the case, you might try charging less than your competitors and targeting potential customers who don’t want to spend money on a high-quality product.

Of course, other factors also play a role in correctly pricing a product, but it’s important that you stay on top of industry pricing to ensure you’re pricing your product in a way that appears appropriate for potential customers.

Additionally, take a look at the perks your competitors offer and how you can use those perks to stay ahead of the competition. For example, maybe your competitors offer a big referral discount or a one-month free trial.

These perks could be the reason you are losing customers. So if it feels appropriate for your brand, think about where you could offer these perks – or offer some unique perks yourself if the competition doesn’t offer any.

5. Make sure you maintain competitive shipping rates.

Did you know that shipping is expensive? Main reason for shopping cart abandonment?

Nowadays, free shipping is a huge perk that can entice consumers to choose one brand over another. If you work in an industry where shipping is an important factor – such as e-commerce – you should take a look at your competitors’ shipping costs and make sure you’re meeting (if not exceeding) those prices.

If most of your competitors offer free shipping, consider exploring the option for your own business. If free shipping isn’t a viable option for your business, consider how you could differentiate yourself in other ways—including loyalty programs, holiday discounts, or social media giveaways.

6. Analyze how your competitors market their products.

In the above section, I have given you a deep insight into the marketing strategy. You can build on the above with the following ideas.

Analyzing your competitors’ website is the quickest way to assess their marketing efforts. This is a great way to see how accessible and engaging their assets are, and if you can, try experimenting with it A/B testing your landing pages or even website. Please note the following points and note the relevant URL for future reference:

• Do you have a blog?
• Do they create white papers or e-books?
• Do they publish videos or webinars?
• Do you have a podcast?
• Do they use static visual content like infographics and cartoons?
• What about slide decks?
• Is there an FAQ section?
• Are there selected articles?
• Do you see press releases?
• Is there a media package?
• How about case studies?
• Do they publish buying guides and spec sheets?
• What online and offline advertising campaigns do they run?

7. Be aware of your competition’s content strategy.

Then look at the quantity of these items. Do you have several hundred blog posts or just a small handful? Are there five white papers and only one e-book?

Next, determine the frequency of these content assets. Do they publish something new every week or once a month? How often does a new e-book or case study appear?

If you come across a large content archive, there is a good chance that your competitor is publishing content on a regular basis. Depending on the topics they discuss, this content can help you refine your lead generation strategies.

From there, you should move on to assessing the quality of their content. Because if the quality is poor, it doesn’t matter how often they post because their audience won’t get much benefit from it.

Select a small handful of samples to review rather than tackling each individual part to make the process more manageable.

Your sampler should contain content that covers a variety of topics so that you have a fairly complete picture of what your competitor is sharing with their target audience.

When analyzing your competitors’ content, consider the following questions:

• How accurate is its content?
• Are there any spelling or grammatical errors?
• How deep is their content? (Is it at the introductory level that just scratches the surface, or does it cover more advanced topics with high-level ideas?)
• What tone do they use?
• Is the content structured in a readable manner? (Do they use bullet points, bold headings, and numbered lists?)
• Is their content free and available to everyone, or do their readers have to subscribe?
• Who writes their content? (Internal team? One person? Multiple contributors?)
• Do articles have a visible byline or biography attached?

As you continue browsing the content, pay attention to the photos and images your competitors are using.

Do you quickly scroll past generic stock photos or are you impressed by custom illustrations and images? If they use stock photos, do they at least have overlays of text quotes or calls to action that are specific to their business?

If the photos are custom-made, do they come from outside graphics professionals or do they appear to have been created in-house?

If you know your competitor’s content marketing strategy well, it’s time to find out if it’s really working for them.

8. Learn what technology stack your competitors are using.

To help your own business, understanding what types of technology your competitors are using can be crucial Reduce friction and increase dynamics within your organization.

For example, maybe you’ve seen positive reviews about a competitor’s customer service – upon research, you discover that the customer is using powerful customer service software that you haven’t used before.

This information should give you the ability to outperform your competitors’ processes.

To find out what software your competitors use, enter the company’s URL Built withan effective tool for uncovering the technology your competitors’ website is running on, along with third-party plugins ranging from analytics systems to CRMs.

Alternatively, you can also take a look at competitor job listings, particularly for engineering or web developer jobs. The job posting will likely mention what tools a candidate needs to be familiar with – a creative way to gain insight into the technology your competitors are using.

9. Analyze the level of interaction with your competitors’ content.

To assess how engaging your competitors’ content is to their readers, you need to see how their audience responds to what they post.

Check the average number of comments, shares, and likes on your competitors’ content and find out if:

• Certain topics are better received than others.
• The comments are negative, positive or mixed.
• People tweet about certain topics more often than others.
• Readers respond better to Facebook updates about specific content.
• Don’t forget to note whether your competitor categorizes their content using tags and whether they have social media follow and share buttons attached to each piece of content.

10. Watch how they promote their marketing content.

From engagement, you go straight to your competitor’s content promotion strategy.

• Keyword density in the text itself
• Image ALT text tags
• Use of internal linking

The following questions can also help you prioritize and focus on what to pay attention to:

• What keywords are your competitors focusing on that you haven’t yet tapped into?
• Which of your contents are frequently shared and linked to? How does your content compare?
• Which social media platforms does your target group use?
• What other websites link to your competitor’s website but not yours?
• Who else is sharing what your competitors are posting?
• Who is sending traffic to your competitor’s website?
• What is the difficulty level of the keywords you want to focus on? There are several free (and paid) tools that give you a comprehensive SEO assessment of your competitors.

11. Look at their social media presence, strategies and go-to platforms.

The final area you should evaluate when marketing is your competitors’ social media presence and engagement rates.

How does your competition encourage engagement with their brand on social media? Do you see social sharing buttons on every article? Does your competitor have links to their social media channels in the header, footer, or elsewhere? Are these clearly visible? Are calls to action used with these buttons?

If your competitors are using a social network that you may not be on, it’s worth learning more about how this platform can help your business too.

To determine whether a new social media platform is worth your time, check your competitors’ engagement rates on these sites. First, visit the following websites to see if your competition has an account on these platforms:

• Facebook.
• Twitter.
• Instagram.
• Snapchat.
• LinkedIn.
• YouTube.
• Pinterest.

Then consider the following quantitative elements of each platform:

• Number of fans/followers.
• Frequency and consistency of publications.
• Content engagement. (Do users leave comments or share their posts?)
• Content virality. (How many shares, repins and retweets do their posts receive?)

With the same critical eye that you used to assess your competition’s content marketing strategy, carefully analyze their social media strategy.

What type of content do they publish? Are they more focused on driving people to landing pages to generate new leads? Or are they publishing visual content to drive engagement and brand awareness?

How much of this content is original? Do they share curated content from other sources? Are these sources regular contributors? What is the overall tone of the content?

How does your competition interact with their followers? How frequently do your followers interact with your content?

After collecting this data, create an overall score for the quality of your competitor’s content. This will help you compare the rest of your competitors using a similar rating scale.

Competitive product analysis

Product analysis drills down to discover key differences and similarities across products that share the same general market.

If a competitor sells products in a similar market niche to yours, you want to make sure you don’t lose market share to the competition.

Using the example above, we can drill down and discover some of the key differentiators of product offerings.

1. Evaluate your current product prices.

The first step in any product analysis is to assess current prices.

Nintendo offers three models of its Switch console: the smaller Lite version costs $199, the standard version costs $299, and the new OLED version costs $349.

Sony now offers two versions of its PlayStation 5 console: the standard version costs $499 and the digital version, which does not include a disc drive, costs $399.

2. Compare key features.

Next is a comparison of the most important features. In the case of our console example, this means comparing features such as processing power, memory, and disk space.

Special feature	PS5 standard	Nintendo Switch
Hard disk space	825GB	32GB
R.A.M.	16 GB	4GB
USB ports	4 ports	1 USB 3.0, 2 USB 2.0
Ethernet connection	Gigabit	None

3. Identify the differentiators.

Now that we’ve compared the basic features, it’s time to dive deeper into what differentiates them. While a look at the graph above suggests that the PS5 is outperforming its competition, this data only tells part of the story.

Here’s why: The big selling point of the standard and OLED Switch models is that they can be played either as handheld consoles or docked to a base station connected to a TV. Additionally, this “switch” is seamless, allowing players to play anytime, anywhere.

The PlayStation offering has now focused on market-exclusive games that are only available on the PlayStation system in order to differentiate itself from the competition.

4. Identify gaps in the market.

The final step of a competitive product analysis is to look for gaps in the market that could help your company gain an edge.

When it comes to the console market, delivering games via cloud-based services rather than physical hardware is a potential opportunity that is becoming increasingly important.

Companies like Nvidia and Google have already made progress in this area, and if they can overcome bandwidth and latency issues, it could change the market in a big way.

Example of a competitive analysis

How do you compare to the competition? How are you similar and what makes you different? This is the goal of competitive analysis.

By understanding where your brand and your competitors overlap and diverge, you are better able to make strategic decisions that can help grow your brand.

Of course, it’s one thing to understand the benefits of competitive analysis and another to actually conduct an analysis that produces actionable results. Don’t worry – we have a quick example for you.

Sony vs. Nintendo: Not all fun and games.

Let’s take a look at the popular gaming system manufacturers Sony and Nintendo.

Sony’s latest offering – the PlayStation 5 – recently launched but has been plagued by supply shortages.

Nintendo’s Switch console has been around for several years now, but it remains a consistent bestseller, especially among teenagers and children.

This scenario is familiar to many companies on both sides of the coin; Some have introduced new products to compete with established leaders, while others want to ensure reliable sales don’t decline.

Using some of the steps listed above, here is a quick example of a competitive analysis.

1. Determine who your competitors are.

In our example it’s Sony vs. Nintendo, but it’s also worth considering Microsoft’s Xbox, which occupies the same general market vertical.

This is crucial for effective analysis. Even if you focus on specific competitors and how they compare, it’s worth considering other similar market offerings.

2. Determine what products your competitors offer.

PlayStation offers two PS5 versions, digital and standard, at different prices, while Nintendo offers three versions of its console.

Both companies also sell peripherals – Sony, for example, sells virtual reality (VR) add-ons, while Nintendo sells gaming peripherals such as steering wheels, tennis rackets and various controller configurations.

3. Understand your competitors’ sales tactics and results.

When it comes to sales tactics and marketing, Sony and Nintendo take very different approaches.

Thanks in part to the recent semiconductor shortage, Sony has driven demand through shortages – there remain very small quantities of PS5 consoles available. Nintendo has now taken a more comprehensive approach and is targeting families as its primary customer base.

These efforts are supported by the Switch Lite product line, which is smaller and less expensive, making it a popular choice for children.

The numbers reveal it: As of September 2021, Nintendo sold 14.3 million consoles while Sony sold 7.8 million.

4. Look at your competitors’ prices and the perks they offer.

Sony has the higher price: the standard PS5 costs $499, while Nintendo’s most expensive offering costs $349. Both offer robust digital marketplaces and the ability to easily download new games or services.

Flexibility and loyalty are the most important differentiating features. The Switch is flexible – users can dock it to their TV and play like a standard console, or pick it up and take it anywhere as a handheld gaming system.

The PS5, on the other hand, has superior graphics hardware and processing power for gamers who want a gaming experience with the highest fidelity.

5. Analyze how your competitors market their products.

When comparing Nintendo and Sony’s marketing efforts, the difference is immediately apparent: Sony’s ads show realistic in-game footage and emphasize the exclusive nature of their game titles.

The company has managed to secure deals with several high-profile game developers for exclusive access to new and existing IPs.

Nintendo, on the other hand, uses brightly lit displays that show happy families playing together or children using their smaller Switches while traveling.

6. Analyze the level of engagement with your competitors’ content.

Engagement helps drive sales and encourage repeat purchases.

While there are several ways to measure engagement, social media is one of the simplest: In general, more followers mean more engagement and greater market impact.

In our example, Sony has a clear lead over Nintendo: While the official PlayStation Facebook page has 38 million followers, Nintendo only has 5 million.

Competitive analysis templates

Competitive analysis is complex, especially when you are evaluating multiple companies and products at the same time.

To streamline the process, we’ve created 10 free templates to help you see how you compare to the competition – and what you can do to increase your market share.

Let’s break down our SWOT analysis template. This is what it looks like:

Download free templates

Strengthen. Identify your strengths. This may include specific pieces of intellectual property, products that are unique to the market, or a workforce that outperforms the competition.

Weaken. Here it is worth considering potential issues around pricing, leadership, staff turnover and new competitors in the market.

Opportunities. This part of the SWOT analysis may focus on new market niches, evolving consumer preferences, or new technologies being developed by your company.

Threats. This may include new taxes or regulations on existing products, or an increasing number of similar products in the same market, which could negatively impact your overall share.

Competitive Analysis: FAQs

What is a competitive analysis framework?

A competitive analysis framework is a structured approach used to evaluate potential competitors and understand their strengths, weaknesses, opportunities and threats.

This framework serves as a guide for companies to identify competitive advantages, understand market positioning and make strategic decisions.

Depending on the industry and company goals, this framework can focus on areas such as product features, market share, pricing, customer feedback, and more.

How do you conduct a good competitive analysis?

Conducting a thorough competitive analysis involves several steps:

• Identify competitors. Start by listing the main direct and indirect competitors in your market.
• Rate their products/services. Analyze what they sell and how it compares to your offerings.
• Analyze market position. Determine their market share, brand perception and unique value proposition.
• Review their marketing strategies. Monitor their advertising, content marketing, PR efforts, and online presence.
• Assess your financial health. If available, review financial statements, annual reports, or investor presentations.
• Collect customer feedback. Reviews, testimonials and surveys can provide insight into competitors’ strengths and weaknesses.
• Check and update regularly. The market is evolving and competitors are changing their strategies. Therefore, it is important that you keep your analysis up to date.

What are the five parts of a competitive analysis?

The five key components of a competitive analysis include:

1. Company overview. A brief snapshot of the participant, including their history, size and mission.
2. Product/service analysis. An examination of their key products or services and how they compare to yours.
3. Marketing strategy. Insights into your advertising tactics, target group and unique selling points.
4. Operational analysis. An understanding of their supply chain, distribution and customer service practices.
5. Strengths and weaknesses. A clear breakdown of where the competitor excels and where they may be vulnerable.

What are the 3 C’s in a competitive analysis?

The 3 C’s refer to a strategic model that considers three main factors when understanding the broader business environment:

1. Company. Understand your own strengths, weaknesses, opportunities and threats.
2. Customers. Know who your target audience is, what they value and how they behave.
3. Competitors. Analysis of direct and indirect competitors to identify market dynamics and potential threats.

Is SWOT analysis a competitive analysis?

Yes, SWOT analysis is a type of competitive analysis. SWOT stands for Strengths, Weaknesses, Opportunities and Threats. It is a strategic planning tool for identifying and analyzing these four elements of a business.

While a SWOT analysis may internally focus on a company’s own characteristics, when used as a competitive analysis tool, it evaluates a competitor’s SWOT to understand where your company has advantages or might be vulnerable.

How does your company perform?

In my years of experience, I have found that competitive analysis is critical to business growth, but it starts with understanding your position. My top recommendation: Before you compare competitors, determine your own starting point.

Take an objective look at your business using the same metrics we discussed for evaluating competitors. This self-assessment not only prepares you for a more accurate SWOT analysis, but also helps you identify your own strengths and weaknesses.

Remember that a competitive analysis is not a one-time task. Markets develop and so do competitors. Regular analysis helps you stay one step ahead of trends and adapt your strategies accordingly.

By combining thorough research with the templates and steps we cover, you’ll be well-equipped to understand your market position and make informed decisions to advance your business.

Editor’s Note: This post was originally published before July 2018 but has been updated for completeness.