what factors determine the competitors included in a business plan

How to Write a Competitive Analysis for Your Business Plan

11 min. read

Updated January 3, 2024

Do you know who your competitors are? If you do, have you taken the time to conduct a thorough competitor analysis?

Knowing your competitors, how they operate, and the necessary benchmarks you need to hit are crucial to positioning your business for success. Investors will also want to see an analysis of the competition in your business plan.

In this guide, we’ll explore the significance of competitive analysis and guide you through the essential steps to conduct and write your own. 

You’ll learn how to identify and evaluate competitors to better understand the opportunities and threats to your business. And you’ll be given a four-step process to describe and visualize how your business fits within the competitive landscape.

• What is a competitive analysis?

A competitive analysis is the process of gathering information about your competitors and using it to identify their strengths and weaknesses. This information can then be used to develop strategies to improve your own business and gain a competitive advantage.

• How to conduct a competitive analysis

Before you start writing about the competition, you need to conduct your analysis. Here are the steps you need to take:

1. Identify your competitors

The first step in conducting a comprehensive competitive analysis is to identify your competitors. 

Start by creating a list of both direct and indirect competitors within your industry or market segment. Direct competitors offer similar products or services, while indirect competitors solve the same problems your company does, but with different products or services.

Keep in mind that this list may change over time. It’s crucial to revisit it regularly to keep track of any new entrants or changes to your current competitors. For instance, a new competitor may enter the market, or an existing competitor may change their product offerings.

2. Analyze the market

Once you’ve identified your competitors, you need to study the overall market. 

This includes the market size , growth rate, trends, and customer preferences. Be sure that you understand the key drivers of demand, demographic and psychographic profiles of your target audience , and any potential market gaps or opportunities.

Conducting a market analysis can require a significant amount of research and data collection. Luckily, if you’re writing a business plan you’ll follow this process to complete the market analysis section . So, doing this research has value for multiple parts of your plan.

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3. Create a competitive framework

You’ll need to establish criteria for comparing your business with competitors. You want the metrics and information you choose to provide answers to specific questions. (“Do we have the same customers?” “What features are offered?” “How many customers are being served?”)

Here are some common factors to consider including: 

• Market share
• Product/service offerings or features
• Distribution channels
• Target markets
• Marketing strategies
• Customer service

4. Research your competitors

You can now begin gathering information about your competitors. Because you spent the time to explore the market and set up a comparison framework—your research will be far more focused and easier to complete.

There’s no perfect research process, so start by exploring sources such as competitor websites, social media, customer reviews, industry reports, press releases, and public financial statements. You may also want to conduct primary research by interviewing customers, suppliers, or industry experts.

You can check out our full guide on conducting market research for more specific steps.

5. Assess their strengths and weaknesses

Evaluate each competitor based on the criteria you’ve established in the competitive framework. Identify their key strengths (competitive advantages) and weaknesses (areas where they underperform).

6. Identify opportunities and threats

Based on the strengths and weaknesses of your competitors, identify opportunities (areas where you can outperform them) and threats (areas where they may outperform you) for your business. 

You can check out our full guide to conducting a SWOT analysis for more specific questions that you should ask as part of each step. 

• How to write your competitive analysis

Once you’ve done your research, it’s time to present your findings in your business plan. Here are the steps you need to take:

1. Determine who your audience is

Who you are writing a business plan for (investors, partners, employees, etc.) may require you to format your competitive analysis differently. 

For an internal business plan you’ll use with your team, the competition section should help them better understand the competition. You and your team will use it to look at comparative strengths and weaknesses to help you develop strategies to gain a competitive advantage.

For fundraising, your plan will be shared with potential investors or as part of a bank loan. In this case, you’re describing the competition to reassure your target reader. You are showing awareness and a firm understanding of the competition, and are positioned to take advantage of opportunities while avoiding the pitfalls.

2. Describe your competitive position

You need to know how your business stacks up, based on the values it offers to your chosen target market. To run this comparison, you’ll be using the same criteria from the competitive framework you completed earlier. You need to identify your competitive advantages and weaknesses, and any areas where you can improve.

The goal is positioning (setting your business up against the background of other offerings), and making that position clear to the target market. Here are a few questions to ask yourself in order to define your competitive position:

• How are you going to take advantage of your distinctive differences, in your customers’ eyes? 
• What are you doing better? 
• How do you work toward strengths and away from weaknesses?
• What do you want the world to think and say about you and how you compare to others?

3. Visualize your competitive position

There are a few different ways to present your competitive framework in your business plan. The first is a “positioning map” and the second is a “competitive matrix”. Depending on your needs, you can use one or both of these to communicate the information that you gathered during your competitive analysis:

Positioning map

The positioning map plots two product or business benefits across a horizontal and vertical axis. The furthest points of each represent opposite extremes (Hot and cold for example) that intersect in the middle. With this simple chart, you can drop your own business and the competition into the zone that best represents the combination of both factors.

I often refer to marketing expert Philip Kohler’s simple strategic positioning map of breakfast, shown here. You can easily draw your own map with any two factors of competition to see how a market stacks up.

It’s quite common to see the price on one axis and some important qualitative factor on the other, with the assumption that there should be a rough relationship between price and quality.

Competitive matrix

It’s pretty common for most business plans to also include a competitive matrix. It shows how different competitors stack up according to the factors identified in your competitive framework. 

How do you stack up against the others? Here’s what a typical competitive matrix looks like:

For the record, I’ve seen dozens of competitive matrices in plans and pitches. I’ve never seen a single one that didn’t show that this company does more of what the market wants than all others. So maybe that tells you something about credibility and how to increase it. Still, the ones I see are all in the context of seeking investment, so maybe that’s the nature of the game.

4. Explain your strategies for gaining a competitive edge

Your business plan should also explain the strategies your business will use to capitalize on the opportunities you’ve identified while mitigating any threats from competition. This may involve improving your product/service offerings, targeting underserved market segments, offering more attractive price points, focusing on better customer service, or developing innovative marketing strategies.

While you should cover these strategies in the competition section, this information should be expanded on further in other areas of your business plan. 

For example, based on your competitive analysis you show that most competitors have the same feature set. As part of your strategy, you see a few obvious ways to better serve your target market with additional product features. This information should be referenced within your products and services section to back up your problem and solution statement. 

• Why competition is a good thing

Business owners often wish that they had no competition. They think that with no competition, the entire market for their product or service will be theirs. That is simply not the case—especially for new startups that have truly innovative products and services. Here’s why:

Competition validates your idea

You know you have a good idea when other people are coming up with similar products or services. Competition validates the market and the fact that there are most likely customers for your new product. This also means that the costs of marketing and educating your market go down (see my next point).

Competition helps educate your target market

Being first-to-market can be a huge advantage. It also means that you will have to spend way more than the next player to educate customers about your new widget, your new solution to a problem, and your new approach to services. 

This is especially true for businesses that are extremely innovative. These first-to-market businesses will be facing customers that didn’t know that there was a solution to their problem . These potential customers might not even know that they have a problem that can be solved in a better way. 

If you’re a first-to-market company, you will have an uphill battle to educate consumers—an often expensive and time-consuming process. The 2nd-to-market will enjoy all the benefits of an educated marketplace without the large marketing expense.

Competition pushes you

Businesses that have little or no competition become stagnant. Customers have few alternatives to choose from, so there is no incentive to innovate. Constant competition ensures that your marketplace continues to evolve and that your product offering continues to evolve with it.

Competition forces focus & differentiation

Without competition, it’s easy to lose focus on your core business and your core customers and start expanding into areas that don’t serve your best customers. Competition forces you and your business to figure out how to be different than your competition while focusing on your customers. In the long term, competition will help you build a better business.

• What if there is no competition?

One mistake many new businesses make is thinking that just because nobody else is doing exactly what they’re doing, their business is a sure thing. If you’re struggling to find competitors, ask yourself these questions.

Is there a good reason why no one else is doing it?

The smart thing to do is ask yourself,  “Why isn’t anyone else doing it?”

It’s possible that nobody’s selling cod-liver frozen yogurt in your area because there’s simply no market for it. Ask around, talk to people, and do your market research. If you determine that you’ve got customers out there, you’re in good shape.

But that still doesn’t mean there’s no competition.

How are customers getting their needs met?

There may not be another cod-liver frozen yogurt shop within 500 miles. But maybe an online distributor sells cod-liver oil to do-it-yourselfers who make their own fro-yo at home. Or maybe your potential customers are eating frozen salmon pops right now. 

Are there any businesses that are indirect competitors?

Don’t think of competition as only other businesses that do exactly what you do. Think about what currently exists on the market that your product would displace.

It’s the difference between direct competition and indirect competition. When Henry Ford started successfully mass-producing automobiles in the U.S., he didn’t have other automakers to compete with. His competition was horse-and-buggy makers, bicycles, and railroads.

Do a competitive analysis, but don’t let it derail your planning

While it’s important that you know the competition, don’t get too caught up in the research. 

If all you do is track your competition and do endless competitive analyses, you won’t be able to come up with original ideas. You will end up looking and acting just like your competition. Instead, make a habit of NOT visiting your competition’s website, NOT going into their store, and NOT calling their sales office. 

Focus instead on how you can provide the best service possible and spend your time talking to your customers. Figure out how you can better serve the next person that walks in the door so that they become a lifetime customer, a reference, or a referral source.

If you focus too much on the competition, you will become a copycat. When that happens, it won’t matter to a customer if they walk into your store or the competition’s because you will both be the same.

Tim Berry is the founder and chairman of Palo Alto Software , a co-founder of Borland International, and a recognized expert in business planning. He has an MBA from Stanford and degrees with honors from the University of Oregon and the University of Notre Dame. Today, Tim dedicates most of his time to blogging, teaching and evangelizing for business planning.

Table of Contents

• Don't let competition derail planning

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How to Write Competitive Analysis in a Business Plan (w/ Examples)

Free Competitive Analysis Kit

• Vinay Kevadia
• January 9, 2024

14 Min Read

Every business wants to outperform its competitors, but do you know the right approach to gather information and analyze your competitors?

That’s where competitive analysis steps in. It’s the tool that helps you know your competition’s pricing strategies, strengths, product details, marketing strategies, target audience, and more.

If you want to know more about competitor analysis, this guide is all you need. It spills all the details on how to conduct and write a competitor analysis in a business plan, with examples.

Let’s get started and first understand the meaning of competitive analysis.

What is Competitive Analysis?

A competitive analysis involves collecting information about what other businesses in your industry are doing with their products, sales, and marketing.

Businesses use this data to find out what they are good at, where they can do better, and what opportunities they might have. It is like checking out the competition to see how and where you can improve.

This kind of analysis helps you get a clear picture of the market, allowing you to make smart decisions to make your business stand out and do well in the industry.

Competitive analysis is a section of utmost value for your business plan. The analysis in this section will form the basis upon which you will frame your marketing, sales, and product-related strategies. So make sure it’s thorough, insightful, and in line with your strategic objectives.

Let’s now understand how you can conduct a competitive analysis for your own business and leverage all its varied benefits.

How to Conduct a Competitive Analysis

Let’s break down the process of conducting a competitive analysis for your business plan in these easy-to-follow steps.

It will help you prepare a solid competitor analysis section in your business plan that actually highlights your strengths and opens room for better discussions (and funding).

Let’s begin.

1. Identify Your Direct and Indirect Competitors

First things first — identify all your business competitors and list them down. You can have a final, detailed list later, but right now an elementary list that mentions your primary competitors (the ones you know and are actively competing with) can suffice.

As you conduct more research, you can keep adding to it.

Explore your competitors using Google, social media platforms, or local markets. Then differentiate them into direct or indirect competitors.

Direct competitors

Businesses offering the same products or services, and targeting a similar target market are your direct competitors.

These competitors operate in the same industry and are often competing for the same market share.

Indirect competitors

On the other hand, indirect competitors are businesses that offer different products or services but cater to the same target customers as yours.

While they may not offer identical solutions, they compete for the same customer budget or attention. Indirect competitors can pose a threat by providing alternatives that customers might consider instead of your offerings.

2. Study the Overall Market

Now that you know your business competitors, deep dive into market research. Market research should involve a combination of both primary and secondary research methods.

Primary research

Primary research involves collecting market information directly from the source or subjects.  Some examples of primary market research methods include:

• Purchasing competitors’ products or services
• Conducting interviews with their customers
• Administering online surveys to gather customer insights

Secondary research

Secondary research involves utilizing pre-existing gathered information from some relevant sources. Some of its examples include:

• Scrutinizing competitors’ websites
• Assessing the current economic landscape
• Referring to online market databases of the competitors.

Have a good understanding of the market at this point to write your market analysis section effectively.

3. Prepare a Competitive Framework

Now that you have a thorough understanding of your competitors’ market, it is time to create a competitive framework that enables comparison between two businesses.

Factors like market share, product offering, pricing, distribution channel, target markets, marketing strategies, and customer service offer essential metrics and information to chart your competitive framework.

These factors will form the basis of comparison for your competitive analysis. Depending on the type of your business, choose the factors that are relevant to you.

4. Take Note of Your Competitor’s Strategies

Now that you have an established framework, use that as a base to analyze your competitor’s strategies. Such analysis will help you understand what the customers like and dislike about your competitors.

Start by analyzing the marketing strategies, sales and marketing channels, promotional activities, and branding strategies of your competitors. Understand how they position themselves in the market and what USPs they emphasize.

Evaluate, analyze their pricing strategies and keep an eye on their distribution channel to understand your competitor’s business model in detail.

This information allows you to make informed decisions about your strategies, helping you identify opportunities for differentiation and improvement.

5. Perform a SWOT Analysis of Your Competitors

A SWOT analysis is a method of analyzing the strengths, weaknesses, opportunities, and threats of your business in the competitive marketplace.

While strengths and weaknesses focus on internal aspects of your company, opportunities and threats examine the external factors related to the industry and market.

It’s an important tool that will help determine the company’s competitive edge quite efficiently.

It includes the positive features of your internal business operations. For example, a strong brand, skilled workforce, innovative products/services, or a loyal customer base.

It includes all the hindrances of your internal business operations. For example, limited resources, outdated technology, weak brand recognition, or inefficient processes.

Opportunities

It outlines several opportunities that will come your way in the near or far future. Opportunities can arise as the industry or market trend changes or by leveraging the weaknesses of your competitors.

For example, details about emerging markets, technological advancements, changing consumer trends, profitable partnerships in the future, etc.

Threats define any external factor that poses a challenge or any risk for your business in this section. For example, intense competition, economic downturns, regulatory changes, or any advanced technology disruption.

This section will form the basis for your business strategies and product offerings. So make sure it’s detailed and offers the right representation of your business.

And that is all you need to create a comprehensive competitive analysis for your business plan.

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How to Write Competitive Analysis in a Business Plan

The section on competitor analysis is the most crucial part of your business plan. Making this section informative and engaging gets easier when you have all the essential data to form this section.

Now, let’s learn an effective way of writing your competitive analysis.

1. Determine who your readers are

Know your audience first, because that will change the whole context of your competitor analysis business plan.

The competitive analysis section will vary depending on the intended audience is the team or investors.

Consider the following things about your audience before you start writing this section:

Internal competitor plan (employees or partners)

Objective: The internal competitor plan is to provide your team with an understanding of the competitive landscape.

Focus: The focus should be on the comparison of the strengths and weaknesses of competitors to boost strategic discussions within your team.

Use: It is to leverage the above information to develop strategies that highlight your strengths and address your weaknesses.

Competitor plan for funding (bank or investors)

Objective: Here, the objective is to reassure the potential and viability of your business to investors or lenders.

Focus: This section should focus on awareness and deep understanding of the competitive landscape to persuade the readers about the future of your business.

Use: It is to showcase your market position and the opportunities that are on the way to your business.

This differentiation is solely to ensure that the competitive analysis serves its purpose effectively based on the specific needs and expectations of the respective audience.

2. Describe and Visualise Competitive Advantage

Remember how we determined our competitive advantage at the time of research. It is now time to present that advantage in your competitive analysis.

Highlight your edge over other market players in terms of innovation, product quality, features, pricing, or marketing strategy. Understanding your products’ competitive advantage will also help you write the products and services section effectively.

However, don’t limit the edge to your service and market segment. Highlight every area where you excel even if it is better customer service or enhanced brand reputation.

Now, you can explain your analysis through textual blocks. However, a more effective method would be using a positioning map or competitive matrix to offer a visual representation of your company’s competitive advantage.

3. Explain your strategies

Your competitor analysis section should not only highlight the opportunities or threats of your business. It should also mention the strategies you will implement to overcome those threats or capitalize on the opportunities.

Such strategies may include crafting top-notch quality for your products or services, exploring the unexplored market segment, or having creative marketing strategies.

Elaborate on these strategies later in their respective business plan sections.

4. Know the pricing strategy

To understand the pricing strategy of your competitors, there are various aspects you need to have information about. It involves knowing their pricing model, evaluating their price points, and considering the additional costs, if any.

One way to understand this in a better way is to compare features and value offered at different price points and identify the gaps in competitors’ offerings.

Once you know the pricing structure of your competitors, compare it with yours and get to know the competitive advantage of your business from a pricing point of view.

Let us now get a more practical insight by checking an example of competitive analysis.

Competitive Analysis Example in a Business Plan

Here’s a business plan example highlighting the barber shop’s competitive analysis.

1. List of competitors

Direct & indirect competitors.

The following retailers are located within a 5-mile radius of J&S, thus providing either direct or indirect competition for customers:

Joe’s Beauty Salon

Joe’s Beauty Salon is the town’s most popular beauty salon and has been in business for 32 years. Joe’s offers a wide array of services that you would expect from a beauty salon.

Besides offering haircuts, Joe’s also offers nail services such as manicures and pedicures. In fact, over 60% of Joe’s revenue comes from services targeted at women outside of hair services. In addition, Joe’s does not offer its customers premium salon products.

For example, they only offer 2 types of regular hair gels and 4 types of shampoos. This puts Joe’s in direct competition with the local pharmacy and grocery stores that also carry these mainstream products. J&S, on the other hand, offers numerous options for exclusive products that are not yet available in West Palm Beach, Florida.

LUX CUTS has been in business for 5 years. LUX CUTS offers an extremely high-end hair service, with introductory prices of $120 per haircut.

However, LUX CUTS will primarily be targeting a different customer segment from J&S, focusing on households with an income in the top 10% of the city.

Furthermore, J&S offers many of the services and products that LUX CUTS offers, but at a fraction of the price, such as:

• Hairstyle suggestions & hair care consultation
• Hair extensions & coloring
• Premium hair products from industry leaders

Freddie’s Fast Hair Salon

Freddie’s Fast Hair Salon is located four stores down the road from J&S. Freddy’s has been in business for the past 3 years and enjoys great success, primarily due to its prime location.

Freddy’s business offers inexpensive haircuts and focuses on volume over quality. It also has a large customer base comprised of children between the ages of 5 to 13.

J&S has several advantages over Freddy’s Fast Hair Salon including:

• An entertainment-focused waiting room, with TVs and board games to make the wait for service more pleasurable. Especially great for parents who bring their children.
• A focus on service quality rather than speed alone to ensure repeat visits. J&S will spend on average 20 more minutes with its clients than Freddy’s.

While we expect that Freddy’s Fast Hair Salon will continue to thrive based on its location and customer relationships, we expect that more and more customers will frequent J&S based on the high-quality service it provides.

2. Competitive Pricing

John and Sons Barbing Salon will work towards ensuring that all our services are offered at highly competitive prices compared to what is obtainable in The United States of America.

We know the importance of gaining entrance into the market by lowering our pricing to attract all and sundry that is why we have consulted with experts and they have given us the best insights on how to do this and effectively gain more clients soon.

Our pricing system is going to be based on what is obtainable in the industry, we don’t intend to charge more (except for premium and customized services) and we don’t intend to charge less than our competitors are offering in West Palm Beach – Florida.

3. Our pricing

• Payment by cash
• Payment via Point of Sale (POS) Machine
• Payment via online bank transfer (online payment portal)
• Payment via Mobile money
• Check (only from loyal customers)

Given the above, we have chosen banking platforms that will help us achieve our payment plans without any itches.

4. Competitive advantage

5. SWOT analysis

Why is a Competitive Environment helpful?

Somewhere we all think, “What if we had no competition?” “What if we were the monopoly?” It would be great, right? Well, this is not the reality, and have to accept the competition sooner or later.

However, competition is healthy for businesses to thrive and survive, let’s see how:

1. Competition validates your idea

When people are developing similar products like you, it is a sign that you are on the right path. Having healthy competition proves that your idea is valid and there is a potential target market for your product and service offerings.

2. Innovation and Efficiency

Businesses competing with each other are motivated to innovate consistently, thereby, increasing their scope and market of product offerings. Moreover, when you are operating in a cutthroat environment, you simply cannot afford to be inefficient.

Be it in terms of costs, production, pricing, or marketing—you will ensure efficiency in all aspects to attract more business.

3. Market Responsiveness

Companies in a competitive environment tend to stay relevant and longer in business since they are adaptive to the changing environment. In the absence of competition, you would start getting redundant which will throw you out of the market, sooner or later.

4. Eases Consumer Education

Since your target market is already aware of the problem and existing market solutions, it would be much easier to introduce your business to them. Rather than focusing on educating, you would be more focused on branding and positioning your brand as an ideal customer solution.

Being the first one in the market is exciting. However, having healthy competition has these proven advantages which are hard to ignore.

A way forward

Whether you are starting a new business or have an already established unit, having a practical and realistic understanding of your competitive landscape is essential to developing efficient business strategies.

While getting to know your competition is essential, don’t get too hung up in the research. Research your competitors to improve your business plan and strategies, not to copy their ideas.

Create your unique strategies, offer the best possible services, and add value to your offerings—that will make you stand out.

While it’s a long, tough road, a comprehensive business plan can be your guide. Using modern business planning software is probably the easiest way to draft your plan.

Use Upmetrics. Simply enter your business details, answer the strategic questions, and see your business plan come together in front of your eyes.

Build your Business Plan Faster

with step-by-step Guidance & AI Assistance.

Frequently Asked Questions

Is swot analysis a competitive analysis.

SWOT analysis is just a component of a competitive analysis and not the whole competitive analysis. It helps you identify the strengths and weaknesses of your business and determine the emerging opportunities and threats faced by the external environment.

Competitive analysis in reality is a broad spectrum topic wherein you identify your competitors, analyze them on different metrics, and identify your competitive advantage to form competitive business strategies.

What tools can i use for competitor analysis?

For a thorough competitor analysis, you will require a range of tools that can help in collecting, analyzing, and presenting data. While SEMrush, Google Alerts, Google Trends, and Ahrefs can help in collecting adequate competitor data, Business planning tools like Upmetrics can help in writing the competitors section of your business plan quite efficiently.

What are the 5 parts of a competitive analysis?

The main five components to keep in mind while having a competitor analysis are:

• Identifying the competitors
• Analyzing competitor’s strengths and weaknesses
• Assessing market share and trends
• Examining competitors’ strategies and market positioning
• Performing SWOT analysis

What is the difference between market analysis and competitive analysis?

Market analysis involves a comprehensive examination of the overall market dynamics, industry trends, and factors influencing a business’s operating environment.

On the other hand, competitive analysis narrows the focus to specific competitors within the market, delving into their strategies, strengths, weaknesses, and market positioning.

About the Author

Vinay Kevadiya

Vinay Kevadiya is the founder and CEO of Upmetrics, the #1 business planning software. His ultimate goal with Upmetrics is to revolutionize how entrepreneurs create, manage, and execute their business plans. He enjoys sharing his insights on business planning and other relevant topics through his articles and blog posts. Read more

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How to Perform a Best-in-Class Competitor Analysis (w/ Template)

Get a full competitive analysis framework that's been real-world tested, and learn the tips and tricks for capturing competitor data and conducting research

You will learn

• The value of running a competitor analysis and how to get your stakeholders on board
• Clear and actionable steps for figuring out who your competitors are
• An easy-to-follow playbook for creating a competitor analysis steeped in research and data

Competitor analysis can be hard .

It’s particularly hard (and confusing and incredibly time-consuming) if you’re relatively new in business . Most of the data is ridiculously difficult to get. Even if you manage to dig something up, you always seem to be left with more questions than answers.

How did they manage to get $10M in funding?

Did that absurdly expensive ad campaign pay off?

Did their CEO leave because things aren’t going well at the company?

What does it all mean?

At least that’s what I felt when I was just getting started with competitive analysis. Whether you’re facing a similar struggle or just aren’t sure where to start, I hope this article will help you navigate through every step of the process.

In this article, I will share the competitive analysis framework my team and I have developed (through weeks of research and dozens of iterations), and give you some tips on where to look for data that isn’t publicly available so you can have a competitive advantage .

But before we start…

What is competitor analysis?

Competitor analysis is the process of evaluating your direct competitors’ companies, products, and marketing strategies.

To make your analysis truly useful, it’s important to:

• Pick the right competitors to analyze
• Know which aspects of your competitors’ business are worth analyzing
• Know where to look for the data
• Understand how you can use the insights to improve your own business.

Which brings us to why competitor analysis is worth doing in the first place.

Who can benefit from an analysis framework?

This framework will work well for entrepreneurs , business owners , startup founders , product managers , creators , and marketers .

It covers business metrics, a product analysis, and a marketing assessment, with the marketing bit being a little more in-depth. Feel free to skip certain parts if you’re only interested in one aspect, or better yet, delegate some steps to respective teams if you can.

It doesn’t matter much what kind of product you’re selling or how mature your business is. To use this framework, you may already have a fully functional product, an MVP, or even just a product idea. I’ll be using certain analysis tools to facilitate and automate certain bits of the process. Most of them are either freemium or have a free trial available, so all that you’ll need to invest into the analysis is your own time.

Done properly, competitive analysis will give you plenty of quantitative and qualitative data to back your own business decisions and business strategy (and no, I’m not talking about cloning your competitors’ strategies to come up with a second best product, although this can sometimes work ).

Namely, it can help you:

• Develop (or validate) your Unique Value Proposition
• Prioritize your product development by focusing on the aspects of competitors’ products customers value the most
• Improve your product by capitalizing on competitors’ weaknesses customers complain about
• Find your competitors' strengths to get benchmarks to measure your growth against
• Uncover market segments that aren’t fully served by competitors
• Create a new product category by identifying gaps between what your competitors offer and what the customers need

Who even are your competitors?

I can sense you rolling your eyes at me, but hear me out.

If you’re serious about competitive analysis, it’s not enough to just evaluate the two Industry Leaders everyone’s talking about (that kind of analysis will likely get you depressed real quick).

The competitors you pick for the analysis determine the insights you’ll get at the end, and the decisions you’ll make, based in part on those insights. That’s why including different kinds of competitors (big and small, direct and indirect) into the analysis is critical if you want the results to be comprehensive.

Here’s a handy way to think about your competition that’s based off of Myk Pono’s classification :

It’s best to include at least one competitor from each category into your analysis to make it truly comprehensive.

Whether you can instantly think of over a dozen competitors or can barely recall five, it’s a good idea to turn to Google or a different a search engine ( DuckDuckGo , anyone?) and look up your product category. Examine the products within the top 50 results, along with the ads that are displayed in response to your query — more likely than not, you’ll come across companies you’ve forgotten about, or maybe even learn about a few newcomers.

To give you an example, I’m going to imagine I’m launching a vacation rental website — an alternative to AirBnB. Here’s what my list of competitors may look like broken down by categories:

Now that you have a comprehensive list of your competitors with similar products, it’s time to start the actual analysis.

As you go through the process, feel free to use this Google Sheets template I’ve created.

In the spreadsheet, I like to divide the factors into collapsable sections (yes, these do get pretty lengthy). I also tend to add comments under each aspect with details or links that provide more info. Depending on the stage you’re at with your business, you can also add in a column for your own product to quickly see how it compares to competitors.

What’s included in a competitor analysis framework

• Business & Company metrics 1.1. Company overview 1.2. Funding 1.3. Revenue & customers
• Product 2.1. Product features 2.2. Pricing 2.3. Perks 2.4. Technology
• Customers & awareness 3.1. Share of Voice 3.2. Sentiment 3.3. Key topics 3.4. Geography 3.5. Social media platforms
• Marketing 4.1. SEO 4.2. Social media 4.3. Advertising 4.4. Influencers and other partners 4.5. Content Marketing 4.6. Customer acquisition 4.7. Sales 4.8. Customer service 4.9. Unique strengths

I’ll go into depth about each section below, and again feel free to grab this competitor analysis template to follow along .

1. Business & Company metrics

1.1. company overview.

Your analysis should start with digging up the basic info about your competitors: things like the company’s founding year, the names of the CEO and other key people, locations of the company’s offices, how many employees work there, etc.

You’ll usually find bits of this information on competitors’ websites.

The company’s LinkedIn profile is often useful, particularly for employee counts.

And for info on key people, offices, and founding date, CrunchBase is a great resource.

Your competitors’ job openings can also be found on their websites, LinkedIn, and job search sites like Glassdoor and Indeed . Knowing who they are hiring and which teams they are expanding will give you an idea of what steps they’re about to take, both product- and marketing-wise. Are they about to hire their first sales rep or content marketer? Are they looking for a developer with a specific skill set? Combined with what you know about your industry, your competition’s job openings will tell you a lot about where they are going with their business.

You could also take things one step further and see if you can get an understanding of competitors’ corporate culture. The best place to dig through employee reviews is Glassdoor . There, you can find out what employees think about the culture, the team, the pay, the management – and those are often honest opinions because a lot of the feedback is anonymous.

1.2. Funding

Knowing when, how much, and from whom your competitors received funding can also be important, particularly if you plan on raising capital yourself. It will give you a solid idea on how much funding you can expect to get.

On top of that, venture capitalists (VCs) tend to invest in only one company in a given category so as not to cannibalize their own investments. If an VCs’ name is missing from your competitors’ funding history, they might be a good candidate for you: they missed out on the chance to work with a successful competitor, but now they have the opportunity to invest into a promising startup in the industry (you!).

1.3. Revenue & customers

Your competitors’ revenue and number of customers deserve a separate section in your spreadsheet. For some companies, you’ll be able to find estimates on Owler , but those will often be very rough. A Google search for the name of your competitor combined with the words “revenue,” “customers,” etc. might lead you to interviews or press releases where the companies share this information (because, well, everyone likes to brag).

That said, I bet you won’t be able to find every competitor’s revenue figures this way. To help you dig deeper, I have two hacks to share that go beyond a simple Google search:

Hack #1: Set up alerts for competitors’ interviews and conference presentations.

This one requires some time, but it’s very effective in the long run: you’ll be surprised at just how much your competitors give away at event presentations and in interviews, without being aware of you listening. All you need to do is sign up for Awario (there’s a free 14-day trial available), create an alert for the names of your competitors’ CEOs or other key figures (don’t forget to put the names in double quotes to search for an exact match), and select YouTube as the source for the search. And that’s it! You can now binge-watch those videos right in Awario, without having to leave the tool for a minute, noting your findings along the way.

Hack #2: Use this revenue formula

Jason Lemkin of SaaStr offers a simple formula you can use to calculate a competitor’s revenue estimate, provided you know how many people work there. Take the number of employees the company has listed on its LinkedIn profile and multiply that by $150,000 if well-funded ($200,000 if modestly funded). This should give you an estimate you can work with.

Employee count * $150,000 = Revenue estimate

These details, combined with company info like founding year and employee counts, are important so you can use them as a benchmark against your own growth. How much time did it take each of your competitors to get to the revenue figures they have today? Are you doing as well as a current market leader back when it was an early-stage business?

It’s time to evaluate your competitors’ products or services, the actual things they’re selling. What kind of technology are they using to build it? What is their core selling point? Are there any perks that come with the product: a freemium version, complementary free tools, or services?

2.1. Product features

Let’s get down to the core of your competitors’ business – their product and its key features. A word of caution: this will likely be the longest bit of your spreadsheet.

It’s a good idea to divide the features into groups of related ones to keep things organized.

2.2. Pricing

Assessing competitors’ pricing pages is another crucial step in your analysis (if pricing isn’t available on their website, try reaching out to their sales team).

Here are some questions to consider:

• Can you uncover a segment of the market that doesn’t seem to be fully served by competitors’ plans?
• Say, do they have an affordable plan for startups or small businesses? Discounts for students or non-profits?
• Are there data-heavy options available for agencies and big brands, with Enterprise features like an API or white-label options?

Another thing you can draw from competitors’ pricing strategies is great ideas for A/B testing . Do they offer monthly or annual plans? (If it’s both, what is the default option?) How many packages have they got? Identify the opportunities for your experiments, and prioritize the ones that are common for several competitors.

Dig through your competitors’ websites to see if they offer something complimentary with their product. Do they have a free trial or a freemium version? Are there any “free” tools their customers get access to, or perhaps a perks program in partnership with other tools?

2.4. Technology

Competitors’ technology is an important aspect to assess for tech companies. BuiltWith is a great (and free) tool to figure out the tech stack that a competitor uses. Just type in the URL, and you’ll be able to see what technology the website runs on, along with any third-party scripts and plugins it uses, everything from analytics systems, email marketing services, to A/B testing tools, and CRMs.

A lean alternative to BuiltWith is What Runs , which is a browser extension that analyzes any webpage you’re on.

On top of that, looking at competitors’ job postings (yes, again) is a great way to see what kind of technology stack they’re using by analyzing the skills they require from candidates. To look for job openings, check your competitors’ websites and job search sites like Glassdoor and Indeed .

3. Customers & awareness

Your next big step in analyzing the competition is looking at what their customers have to say about them. In this section, you’ll look at each brand’s Share of Voice, the sentiment behind their mentions, the key topics customers bring up when they talk about your competitors, and more. To measure these, you’ll need a social listening tool like Awario or Mention .

3.1. Share of Voice

Ideally, you’d want to measure the market share for each of your competitors. But alas, it’s nearly impossible. One substitute metric you could use is Share of Voice – the volume of mentions your competitors get on social media and the web compared to each other.

To measure share of voice , create an alert for each competitor’s brand in Awario, give the tool some time to collect the mentions, and jump to the Alert Comparison report to see how much each competitor is talked about on social and the web.

It’s a good idea to keep these alerts running for the long-term (as opposed to just looking at Share of Voice once). This way, you’ll be able to see spikes in their volume of mentions, track what their customers are saying, and see how their (and your own) Share of Voice evolves over time.

3.2. Sentiment

The caveat of measuring the level of awareness a competitor has is that awareness isn’t always a good thing. What if there’s been a data scandal one of the competitors is involved in? What if their customer service is horrible, causing an influx of negative mentions?

That’s not the only reason why measuring the sentiment behind the mentions of your competitors is important. It will also help you understand what these companies’ customers love and hate about their product the most.

On top of that, it can also serve as a benchmark when you analyze the sentiment behind the mentions of your own brand and product. Let’s say, 40% of your mentions are positive, 20% are negative, and the rest are neutral. How do you know if that’s a good thing or a bad thing without a benchmark?

3.3. Key topics

What do your customers focus on when they mention your competitors’ products or write customer reviews?

What do they love and hate the most?

Identifying the key topics within your competitors’ mentions will give quick answers to these questions so you don’t have to dig through mentions by hand. You can find these topic clouds in a social listening dashboard. From there, you can click on any topic to explore the mentions in-depth.

Interestingly, these topic clouds can also offer insight into various aspects of your competitors’ business – and they may help you fill the gaps in other sections in your competitor analysis spreadsheet. Here’s one example: those are the key topics for Loom, a screen recording app, from which you can learn a few useful things if you look closely.

Looks like the company a) has just raised some money, b) offers remote jobs, and c) has just announced a new feature they’re building. And you discovered all that at a glance! Of course, you can further explore any topic by clicking on it to see all the mentions that contain the word/phrase.

3.4. Geography

Looking at the geography and demographics of your competitors’ mentions will let you figure out which markets they are focusing on the most (and, with any luck, find an area that isn’t too saturated yet). You’ll find a map of each brand’s mentions in Awario’s dashboard and reports, along with the breakdown of mentions by language.

Try adjusting the date range in the report to see if there’s been any changes in languages/countries recently. This could mean that your competitors are focusing on a new emerging market – an opportunity you might be interested to explore.

3.5. Social media platforms

Just like with geography, this one will give you an idea on where your competitors’ audience hangs out so you can use these findings in your own marketing strategy and social media strategy. On top of that, if you see platforms that appear to be heavily underused (but do look relevant), those may also be worth experimenting with. Just like with the previous factors, you can compare the platforms side-by-side using Awario’s Alert Comparison report.

4. Marketing

From the SEO perspective, there are two most important things about competition you should focus on: the keywords they rank for and the backlinks they’ve got. The former will give you a solid idea on what type of search terms bring them traffic and sales (so you can shape your own keyword strategy), and the latter will show what authoritative websites in your niche link to them (those will likely be relevant to your website too).

For both tasks, you can use SEO PowerSuite (you can get the free version here ). The toolkit includes 4 apps for different aspects of SEO, but we’ll only need 2 of those to analyze competitors.

Rank Tracker will help you with the keywords. Navigate to the tool’s Ranking Keywords module and type in a competitor’s URL. You’ll see a list of terms they rank for, along with the search volume for each term in your country of choice. It’s a good idea to move the most popular terms to Target Keywords right away so you can keep them for your records. Repeat the process for every competitor, noting their estimated search traffic and top keywords they rank for.

For backlink analysis, you’ll need SEO SpyGlass. Launch the tool and create a project for one of your competitors. Next, jump to Domain Comparison . One by one, specify your competitors’ websites and take a look at how they compare.

Next, jump to Link Intersection – a module that shows you the domains that link to more than one of your competitors. You can sort them by InLink Rank to see the most authoritative websites on your list. Those are likely relevant industry websites that will make a great addition to your backlink profile – make sure to save them so you can reach out and see if you can get a backlink from there.

4.2. Social media

The next step is analyzing what, when, and how your competitors are doing on social media. Rival IQ is a useful tool for this task, and they have a 14-day free trial available. Once you’ve signed up for the tool, specify your competitors’ websites, and the platform will automatically pull their social media profiles.

From there, you’ll be able to see which social networks they’re active on, how many followers they have, how much engagement their posts get, etc. Those insights will be handy to benchmark your own strategy against. The tool will also show you the best times and days of the week to post, based on the engagement competitors’ posts get.

On top of that, it may be a good idea to research if your competitors have a community on social media – a Facebook group or a subreddit dedicated to their product. How big is the community? Are the users engaged?

4.3. Advertising

To get an idea of your competitors’ ad strategy, SimilarWeb is a great (and free) starting point. Enter the URL of a competitor’s website and navigate to the Search section – it will show you if your competitors have any search ads running, and, if they do, what their target keywords are.

The Display section below will show you whether a competitor is running any display ads, and, if they are, which platforms bring them the most traffic.

For Facebook ads, simply open a competitor’s Facebook page and click on Info and ads .

Alternatively, you can use Facebook’s Ad Library to search for your competitors’ ads. Unfortunately, these tools won’t reveal targeting rules your competitors use, but you’ll still get a solid idea of how many ads they’re running, and perhaps get inspiration for your own advertising efforts.

If native ads or other kinds of paid content are a thing in your niche, you can also try searching for “sponsored by [competitor]”, “author” “[competitor]”, etc. in a search engine of your choice (the quotes will make sure you’re looking for an exact match, and all of the words in the query are taken into account). Take note of authoritative platforms you come across and try reaching out to them to inquire about sponsored posts.

4.4. Influencers and other partners

At this point, we’re interested in exploring the partnerships your competitors have that help spread the word about their products. We’ll look at influencers endorsing your competition, publishers they work with, and media platforms they guest blog on, if any.

For the analysis, you’ll need the same social media monitoring alerts for your competitors’ brand you’ve already created in Awario. In your feed, make sure to group the mentions by Authors and sort them by Reach to see the most influential posts first (Reach is calculated based on the number of followers and engagements on social media, and based on the site’s estimated traffic for results from news, blogs, and the web).

This will let you see the most influential posts that mention your competition, including social media posts and blog articles from around the web. Take note of the influencers or publishers they work with – chances are they will be happy to work with you as well.

On top of that, you can also turn to SimilarWeb to see what referral sources are bringing the most visits to your competitors’ websites. Chances are you’ll also find a bunch of blogs and media platforms that generate substantial traffic to their sites.

4.5. Content Marketing

If content is part of your competitors’ strategy, it’s important that you analyze their blog and what they tend to write about. Are the readers engaged? Do the posts get shared around social media a lot? Does the competitor accept guest posts?

BuzzSumo is a great tool to help you out. It will show you the most shared posts on any blog within the past year, so you can get inspiration for your own posts and a better idea of what kind of content resonates with your target audience the best.

4.6. Customer acquisition

I know, a lot of the points above were actually customer acquisition techniques; but this section is reserved for the ones that weren’t outlined before. Do your competitors have a referral strategy? Do they have an affiliate program? Do they sponsor or exhibit at industry conferences? Do they acquire customers in any other creative way?

If applicable, it’s also important to analyze your competitors’ sales strategy. Do they do product demos? What does contacting a rep look like? Is there a phone number you can call?

The best thing to do is try and book a demo (or a call) with every company yourself, taking careful note of every step. Do they require filling out dozens of fields for you to talk to sales? Will they refuse to hold a demo just because your company is “too small”? Is their time zone convenient? How long does it take them to reply?

All of this will help you spot strengths and weaknesses in your competitors’ sales strategy to help you shape your own.

4.8. Customer service

Does every competitor offer Customer Support for all customers, or does it start with a particular plan? What channels do they provide support on: is it email, live chat, phone, social media, or all of the above? What is their response time? Do they offer Account Management for Enterprise customers?

Analyzing your competitors’ customer service will help you improve your own. The truth is, in large companies, customer care is often almost non-existent; for a new business in the industry, that’s a great area to capitalize on. If that’s true in your case, make sure to highlight the quality of your customer service on your website.

4.9. Unique strengths

Is there anything else that gives a competitor on your list an unfair advantage over everyone else? For example, is their CEO or somebody else on the team an industry influencer? Does the company publish amazing books that are also free? Have the founders launched successful products before? Make note of each competitor’s unique strengths that are hard to emulate.

What’s next?

Once you’re done with every step of competitive analysis, I’m sure you’ve got a clear understanding of the market and more than a handful of ideas on how to improve your own product. While the research is still fresh in your mind, one bonus step I’d highly recommend to everyone performing the analysis is to map your competitors on a Strategy Canvas (from the book Blue Ocean Strategy ).

A Strategy Canvas is a chart that breaks down your competitors by various aspects of their businesses and products (the pricing and other aspects specific to your product category).

The easiest way to plot this is a line chart, with each factor assigned a score depending on how well it is executed.

Here’s an example from the book: a Strategy Canvas for Southwest, one of the first low-cost airlines in the US, compared to the 2 categories that could be considered its competitors: air travel at the time and car travel.

Source: Blue Ocean Strategy

Depending on the kind of competitors you’ve analyzed, you’ll likely see that most of them follow one or two distinct patterns: those will be the major categories you’re competing with (though they may not be as different as cars and airplanes). It’s time to plot your own product on the canvas and see how it compares to the competitors.

Finally, think of ways to make your product stand out. From your research, recall the things your audience needs more and less of. Blue Ocean Strategy offers a nice way to think about the factors on the canvas in terms of applying them to your own product, called the Eliminate-Reduce-Raise-Create Grid.

• Think of features you could eliminate to lower the cost of your solution : the ones that seem superfluous, are rarely mentioned by customers, and are particularly costly. For Southwest vs. traditional airlines, those were seating class choices and hub connectivity.
• Think of the factors you can reduce way below the industry standard : the ones that need to be there, but can be leveled down significantly. It’s great if price is going to be one of them! For Southwest, those were the prices, meals, and lounges.
• Time to think about the aspects you’ll raise well above the industry standard , especially if they won’t cost you a fortune. What do customers wish they’d get more of? For Southwest, that was the friendliness of the service and the speed of travel.
• Lastly, try and create new features that your closest competitors don’t offer (or borrow them from another product category). With Southwest, it was the frequent departures that traditional airlines didn’t have – but car travel did.

Remember: the idea of a competitive analysis isn’t to steal what they’re doing, it is to understand where your business falls in the market and find new opportunities to make your product stand out.

Eventually, focusing on your customers and gaps between supply and demand will serve you much better than focusing on the competition. And that’s what competitor analysis is for – finding ways to serve the customer better.

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How to create a competitive analysis (with examples)

Competitive analysis involves identifying your direct and indirect competitors using research to reveal their strengths and weaknesses in relation to your own. In this guide, we’ll outline how to do a competitive analysis and explain how you can use this marketing strategy to improve your business.

Whether you’re running a business or playing in a football game, understanding your competition is crucial for success. While you may not be scoring touchdowns in the office, your goal is to score business deals with clients or win customers with your products. The method of preparation for athletes and business owners is similar—once you understand your strengths and weaknesses versus your competitors’, you can level up. 

What is a competitive analysis?

Competitive analysis involves identifying your direct and indirect competitors using research to reveal their strengths and weaknesses in relation to your own. 

Direct competitors market the same product to the same audience as you, while indirect competitors market the same product to a different audience. After identifying your competitors, you can use the information you gather to see where you stand in the market landscape. 

What to include in a competitive analysis

The purpose of this type of analysis is to get a competitive advantage in the market and improve your business strategy. Without a competitive analysis, it’s difficult to know what others are doing to win clients or customers in your target market. A competitive analysis report may include:

A description of your company’s target market

Details about your product or service versus the competitors’

Current and projected market share, sales, and revenues

Pricing comparison

Marketing and social media strategy analysis

Differences in customer ratings

You’ll compare each detail of your product or service versus the competition to assess strategy efficacy. By comparing success metrics across companies, you can make data-driven decisions.

How to do a competitive analysis

Follow these five steps to create your competitive analysis report and get a broad view of where you fit in the market. This process can help you analyze a handful of competitors at one time and better approach your target customers.

1. Create a competitor overview

In step one, select between five and 10 competitors to compare against your company. The competitors you choose should have similar product or service offerings and a similar business model to you. You should also choose a mix of both direct and indirect competitors so you can see how new markets might affect your company. Choosing both startup and seasoned competitors will further diversify your analysis.

Tip: To find competitors in your industry, use Google or Amazon to search for your product or service. The top results that emerge are likely your competitors. If you’re a startup or you serve a niche market, you may need to dive deeper into the rankings to find your direct competitors.

2. Conduct market research

Once you know the competitors you want to analyze, you’ll begin in-depth market research. This will be a mixture of primary and secondary research. Primary research comes directly from customers or the product itself, while secondary research is information that’s already compiled. Then, keep track of the data you collect in a user research template .

Primary market research may include: 

Purchasing competitors’ products or services

Interviewing customers

Conducting online surveys of customers 

Holding in-person focus groups

Secondary market research may include:

Examining competitors’ websites

Assessing the current economic situation

Identifying technological developments 

Reading company records

Tip: Search engine analysis tools like Ahrefs and SEMrush can help you examine competitors’ websites and obtain crucial SEO information such as the keywords they’re targeting, the number of backlinks they have, and the overall health of their website. 

3. Compare product features

The next step in your analysis involves a comparison of your product to your competitors’ products. This comparison should break down the products feature by feature. While every product has its own unique features, most products will likely include:

Service offered

Age of audience served

Number of features

Style and design

Ease of use

Type and number of warranties

Customer support offered

Product quality

Tip: If your features table gets too long, abbreviate this step by listing the features you believe are of most importance to your analysis. Important features may include cost, product benefits, and ease of use.

4. Compare product marketing

The next step in your analysis will look similar to the one before, except you’ll compare the marketing efforts of your competitors instead of the product features. Unlike the product features matrix you created, you’ll need to go deeper to unveil each company’s marketing plan . 

Areas you’ll want to analyze include:

Social media

Website copy

Press releases

Product copy

As you analyze the above, ask questions to dig deeper into each company’s marketing strategies. The questions you should ask will vary by industry, but may include:

What story are they trying to tell?

What value do they bring to their customers?

What’s their company mission?

What’s their brand voice?

Tip: You can identify your competitors’ target demographic in this step by referencing their customer base, either from their website or from testimonials. This information can help you build customer personas. When you can picture who your competitor actively targets, you can better understand their marketing tactics. 

5. Use a SWOT analysis

Competitive intelligence will make up a significant part of your competitor analysis framework, but once you’ve gathered your information, you can turn the focus back to your company. A SWOT analysis helps you identify your company’s strengths and weaknesses. It also helps turn weaknesses into opportunities and assess threats you face based on your competition.

During a SWOT analysis, ask yourself:

What do we do well?

What could we improve?

Are there market gaps in our services?

What new market trends are on the horizon?

Tip: Your research from the previous steps in the competitive analysis will help you answer these questions and fill in your SWOT analysis. You can visually present your findings in a SWOT matrix, which is a four-box chart divided by category.

6. Identify your place in the market landscape

The last step in your competitive analysis is to understand where you stand in the market landscape. To do this, you’ll create a graph with an X and Y axis. The two axes should represent the most important factors for being competitive in your market. 

For example, the X-axis may represent customer satisfaction, while the Y-axis may represent presence in the market. You’ll then plot each competitor on the graph according to their (x,y) coordinates. You’ll also plot your company on this chart, which will give you an idea of where you stand in relation to your competitors. 

This graph is included for informational purposes and does not represent Asana’s market landscape or any specific industry’s market landscape. 

Tip: In this example, you’ll see three companies that have a greater market presence and greater customer satisfaction than yours, while two companies have a similar market presence but higher customer satisfaction. This data should jumpstart the problem-solving process because you now know which competitors are the biggest threats and you can see where you fall short. 

Competitive analysis example

Imagine you work at a marketing startup that provides SEO for dentists, which is a niche industry and only has a few competitors. You decide to conduct a market analysis for your business. To do so, you would:

Step 1: Use Google to compile a list of your competitors. 

Steps 2, 3, and 4: Use your competitors’ websites, as well as SEO analysis tools like Ahrefs, to deep-dive into the service offerings and marketing strategies of each company. 

Step 5: Focusing back on your own company, you conduct a SWOT analysis to assess your own strategic goals and get a visual of your strengths and weaknesses. 

Step 6: Finally, you create a graph of the market landscape and conclude that there are two companies beating your company in customer satisfaction and market presence. 

After compiling this information into a table like the one below, you consider a unique strategy. To beat out your competitors, you can use localization. Instead of marketing to dentists nationwide like your competitors are doing, you decide to focus your marketing strategy on one region, state, or city. Once you’ve become the known SEO company for dentists in that city, you’ll branch out. 

You won’t know what conclusions you can draw from your competitive analysis until you do the work and see the results. Whether you decide on a new pricing strategy, a way to level up your marketing, or a revamp of your product, understanding your competition can provide significant insight.

Drawbacks of competitive analysis

There are some drawbacks to competitive analysis you should consider before moving forward with your report. While these drawbacks are minor, understanding them can make you an even better manager or business owner. 

Don’t forget to take action

You don’t just want to gather the information from your competitive analysis—you also want to take action on that information. The data itself will only show you where you fit into the market landscape. The key to competitive analysis is using it to problem solve and improve your company’s strategic plan .

Be wary of confirmation bias

Confirmation bias means interpreting information based on the beliefs you already hold. This is bad because it can cause you to hold on to false beliefs. To avoid bias, you should rely on all the data available to back up your decisions. In the example above, the business owner may believe they’re the best in the SEO dental market at social media. Because of this belief, when they do market research for social media, they may only collect enough information to confirm their own bias—even if their competitors are statistically better at social media. However, if they were to rely on all the data available, they could eliminate this bias.

Update your analysis regularly

A competitive analysis report represents a snapshot of the market landscape as it currently stands. This report can help you gain enough information to make changes to your company, but you shouldn’t refer to the document again unless you update the information regularly. Market trends are always changing, and although it’s tedious to update your report, doing so will ensure you get accurate insight into your competitors at all times. 

Boost your marketing strategy with competitive analysis

Learning your competitors’ strengths and weaknesses will make you a better marketer. If you don’t know the competition you’re up against, you can’t beat them. Using competitive analysis can boost your marketing strategy and allow you to capture your target audience faster.

Competitive analysis must lead to action, which means following up on your findings with clear business goals and a strong business plan. Once you do your competitive analysis, you can use the templates below to put your plan into action.

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What is a Competitive Analysis — and How Do You Conduct One?

Published: April 24, 2024

Every time I work with a new brand, my first order of business is to conduct a competitive analysis. 

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

In this article, I’ll break down the exact steps I follow to conduct competitor analysis and identify ways to one-up top brands in the market. 

We’ll cover:

What is competitive analysis?

What is competitive market research, competitive analysis in marketing.

• How To Conduct Competitive Analysis in 5 Steps

How to Do a Competitive Analysis (the Extended Cut)

Competitive product analysis, competitive analysis example, competitive analysis templates.

• Competitive Analysis FAQs

Competitive analysis is the process of comparing your competitors against your brand to understand their core differentiators, strengths, and weaknesses. It’s an in-depth breakdown of each competitor’s market position, sales & 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. 

That said, you have to remember that competitive analysis is an opportunity to learn from others. It isn’t:

• Copying successful competitors to the T.
• Trying to undercut others’ pricing.
• A one-and-done exercise.

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

4 Reasons to Perform Competitive Analysis 

If you’re on the fence about investing time and effort in analyzing your competitors, know that it gives you a complete picture of the market and where you stand in it.

Here are four main reasons why I perform a competitive analysis exercise whenever working with a brand for the first time:

• Identify your differentiators. Think of competitor analysis as a chance to reflect on your own business and discover what sets you apart from the crowd. And if you’re only starting out, it helps you brainstorm the best opportunities to differentiate your business.
• Find competitors’ strengths. What are your competitors doing right to drive their growth? Analyzing the ins and outs of an industry leader will tell you what they did well to reach the top position in the market.
• Set benchmarks for success. A competitor analysis gives you a realistic idea of mapping your progress with success metrics. While every business has its own path to success, you can always look at a competitor’s trajectory to assess whether you’re on the right track.
• Get closer to your target audience. A good competitor analysis framework zooms in on your audience. It gives you a pulse of your customers by evaluating what they like, dislike, prefer, and complain about when reviewing competing brands.

The bottom line: Whether you’re starting a new business or revamping an existing one, a competitive analysis eliminates guesswork and gives you concrete information to build your business strategy.

10 Free Competitive Analysis Templates

Track and analyze your competitors with these ten free planning templates.

• SWOT Analysis
• Battle Cards
• Feature Comparison
• Strategic Overview

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Competitive market research is a vital exercise that goes beyond merely comparing products or services. It involves an in-depth analysis of the market metrics that distinguish your offerings from those of your competitors.

A thorough market research doesn't just highlight these differences but leverages them, laying a solid foundation for a sales and marketing strategy that truly differentiates your business in a bustling market.

In the next section, we’ll explore the nuts and bolts of conducting a detailed competitive analysis tailored to your brand.

10 Competitive Analysis Templates

Fill out the form to access the templates., essential aspects to cover in competitive analysis research .

Before we walk through our step-by-step process for conducting competitor analysis, let’s look at the main aspects to include for every competitor:

• Overview. A summary of the company — where it’s located, target market, and target audience.
• Primary offering. A breakdown of what they sell and how they compare against your brand.
• Pricing strategy. A comparison of their pricing for different products with your pricing.
• Positioning.  An analysis of their core messaging to see how they position themselves. Customer feedback: A curation of what customers have to say about the brand.

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

Every brand can benefit from regular competitor analysis. By performing a competitor analysis, you'll be able to:

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

As you can see, learning any of these four components will lead your brand down the path of achievement.

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

How to Conduct Competitive Analysis in 5 Quick Steps

As a content marketer, I’ve performed a competitive analysis for several brands to improve their messaging, plan their marketing strategy, and explore new channels. Here are the five steps I follow to analyze competitors.

1. Identify and categorize all competitors.

The first step is a simple yet strategic one. You have to identify all possible competitors in your industry, even the lesser-known ones. The goal here is to be aware of all the players in the market instead of arbitrarily choosing to ignore a few.

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

• Direct competitors. These brands offer the same product/service as you to the same target audience. People will often compare you to these brands when making a buying decision. For example, Arcade and Storylane are direct competitors in the demo automation category.
• Indirect competitors. These businesses solve the same problem but with a different solution. They present opportunities for you 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 operating in your industry for several years. They have a solid reputation in the market and are a trusted name among customers. For example, Ahrefs is a legacy competitor in the SEO industry.
• Emerging competitors. These are new players in the market with an innovative business model and unique value propositions that pose a threat to existing brands. For example, ChatGPT came in as a disruptor in the conversational AI space and outperformed several brands. 

Here’s a competitive matrix classifying brands in the community and housing space:

Testing It Out

To help you understand each step clearly, we’ll use the example of Trello and create a competitor analysis report using these steps.

Here’s a table of the main competitors for Trello:

able of the main competitors for Trello:

2. Determine each competitor’s market position.

Once you know all your competitors, start analyzing their position in the market. This step will help you understand where you currently stand in terms of market share and customer satisfaction. It’ll also reveal the big guns in your industry — the leading competitors to prioritize in your analysis report.

Plus, visualizing the market landscape will tell you what’s missing in the current state. You can find gaps and opportunities for your brand to thrive even in a saturated market.

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

• Niche. These are brands with a low market share but rank high on customer satisfaction. They’re likely targeting a specific segment of the audience and doing it well.
• Contenders. These brands rank low on customer satisfaction but have a good market presence. They might be new entrants with a strong sales and marketing strategy.
• Leaders. These brands own a big market share and have highly satisfied customers. They’re the dominant players with a solid reputation among your audience.
• High performers. These are another category of new entrants scoring high on customer satisfaction but with a low market share. They’re a good alternative for people not looking to buy from big brands.

This visualization will tell you exactly how crowded the market is. But it’ll also highlight ways to gain momentum and compete with existing brands.

Here’s a market landscape grid by 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: “Leaders” and “High Performers.” 

Image Source

3. Extensively benchmark key competitors.

Step 2 will narrow down your focus from dozens of competitors to the few most important ones to target. Now, it’s time to examine each competitor thoroughly and prepare a benchmarking report.

Remember that this exercise isn’t meant to find shortcomings in every competitor. You have to objectively determine both the good and bad aspects of each brand.

Here are the core factors to consider when benchmarking competitors:

• Quality. Assess the quality of products/services for each competitor. You can compare product features to see what’s giving them an edge over you. You can also evaluate customer reviews to understand what users have to say about the quality of their offering.
• Price. Document the price points for every competitor to understand their pricing tactics. You can also interview their customers to find the value for money from users’ perspectives.
• Customer service. Check how they deliver support — through chat, phone, email, knowledge base, and more. You can also find customer ratings on different third-party platforms.
• Brand reputation. You should also compare each competitor’s reputation in the market to understand how people perceive the brand. Look out for anything critical people say about specific competitors.  
• Financial health. If possible, look for performance indicators to assess a brand's financial progress. You can find data on metrics like revenue growth and profit margins. 

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

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

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

4. Deep dive into their marketing strategy.

While the first few steps will tell you what you can improve in your core product or service, you also need to find how competitors market their products.

You need to deep-dive into their marketing strategies to learn how they approach buyers. I analyze every marketing channel, then note my observations on how they speak to their audience and highlight their brand personality.

Here are a few key marketing channels to explore:

• Website. Analyze the website structure and copy to understand their positioning and brand voice.
• Email. Subscribe to emails to learn their cadence, copywriting style, content covered, and other aspects.
• Paid ads. Use tools like Ahrefs and Semrush to find if any competitor is running paid ads on search engines.
• Thought leadership. Follow a brand’s thought leadership efforts with content assets like podcasts, webinars, courses, and more.
• Digital PR. Explore whether a brand is investing in digital PR to build buzz around its business and analyze its strategy.
• Social media. See how actively brands use different social channels and what kind of content is working best for them.
• Partnerships. Analyze high-value partnerships to see if brands work closely with any companies and mutually benefit each other.

You can create a detailed document capturing every detail of a competitor’s marketing strategy. This will give you the right direction to plan your marketing efforts. 

5. Perform a SWOT analysis.

The final step in a competitive analysis exercise is creating a SWOT analysis matrix for each company. This means you‘ll take note of your competitor’s strengths, weaknesses, opportunities, and threats. Think of it as the final step to consolidate all your research and answer these questions:

• What is your competitor doing well?
• Where do they have an advantage over your brand?
• What is the weakest area for your competitor?
• Where does your brand have the advantage over your competitor?
• In what areas would you consider this competitor a threat?
• Are there opportunities in the market that your competitor has identified?

You can use tools like Miro to visualize this data. Once you visually present this data, you’ll get a clearer idea of where you can outgrow each competitor. 

Here’s a SWOT analysis matrix I created for Asana as a competitor of Trello:

• Determine who your competitors are.
• Determine what products your competitors offer.
• Research your competitors' sales tactics and results.
• Take a look at your competitors' pricing, as well as any perks they offer.
• Ensure you're meeting competitive shipping costs.
• Analyze how your competitors market their products.
• Take note of your competition's content strategy.
• Learn what technology stack your competitors use.
• Analyze the level of engagement on your competitors' content.
• Observe how they promote marketing content.
• Look at their social media presence, strategies, and go-to platforms.
• Perform a SWOT Analysis to learn their strengths, weaknesses, opportunities, and threats.

To run a complete and effective competitive analysis, use these ten templates, which range in purpose from sales to marketing to product strategy.

Featured Resource: 10 Competitive Analysis Templates

1. Assess your current product pricing.

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

Nintendo offers three models of its Switch console: The smaller lite version is priced at $199, the standard version is $299, and the new OLED version is $349.

Sony, meanwhile, offers two versions of its PlayStation 5 console: The standard edition costs $499, and the digital version, which doesn’t include a disc drive, is $399.

2. Compare key features.

Next is a comparison of key features. In the case of our console example, this means comparing features like processing power, memory, and hard drive space.

3. Pinpoint differentiators.

With basic features compared, it’s time to dive deeper with differentiators. While a glance at the chart above seems to indicate 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 as either handheld consoles or docked with a base station connected to a TV. What’s more, this “switching” happens seamlessly, allowing players to play whenever, wherever.

The Playstation offering, meanwhile, has leaned into market-exclusive games that are only available on its system to help differentiate them from their competitors.

4. Identify market gaps.

The last step in a competitive product analysis is looking for gaps in the market that could help your company get ahead.

When it comes to the console market, one potential opportunity gaining traction is the delivery of games via cloud-based services rather than physical hardware.

Companies like Nvidia and Google have already made inroads in this space, and if they can overcome issues with bandwidth and latency, it could change the market at scale.

How do you stack up against the competition? Where are you similar, and what sets you apart? This is the goal of competitive analysis.

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

Of course, it’s one thing to understand the benefits of competitive analysis, and it’s another to actually carry out an analysis that yields actionable results. Don’t worry — we’ve got you covered with a quick example.

Sony vs. Nintendo: Not all fun and games.

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

Sony’s newest offering — the Playstation 5 — recently hit the market but has been plagued by supply shortages.

Nintendo’s Switch console, meanwhile, has been around for several years but remains a consistent seller, especially among teens and children.

This scenario is familiar for many companies on both sides of the coin; some have introduced new products designed to compete with established market leaders, while others are looking to ensure that reliable sales don’t fall.

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

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 critical for effective analysis; even if you’re focused on specific competitors and how they compare, it’s worth considering other similar market offerings.

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

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

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

In part thanks to the recent semiconductor shortage, Sony has driven up demand via scarcity — very low volumes of PS5 consoles remain available. Nintendo, meanwhile, has adopted a broader approach by targeting families as its primary customer base.

This effort is bolstered by the Switch Lite product line, which is smaller and less expensive, making it a popular choice for children.

The numbers tell the tale : Through September 2021, Nintendo sold 14.3 million consoles, while Sony sold 7.8 million.

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

Here, the key differentiators are flexibility and fidelity. The Switch is flexible — users can dock it with their television and play it like a standard console or pick it up and take it anywhere as a handheld gaming system.

The PS5, meanwhile, has superior graphics hardware and processing power for gamers who want the highest-fidelity experience.

5. Analyze how your competitors market their products.

If you compare the marketing efforts of Nintendo and Sony, the difference is immediately apparent: Sony’s ads feature realistic in-game footage and speak to 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, meanwhile, uses brightly lit ads showing happy families playing together or children using their smaller Switches while traveling.

6. Analyze the level of engagement on your competitor's content.

Engagement helps drive sales and encourage repeat purchases.

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

When it comes to our example, Sony enjoys a significant lead over Nintendo: While the official Playstation Facebook page has 38 million followers, Nintendo has just 5 million.

Competitive analysis is complex, especially when you’re assessing multiple companies and products simultaneously.

To help streamline the process, we’ve created 10 free templates that make it possible to see how you stack up against the competition — and what you can do to increase market share.

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

Don't forget to share this post!

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How to Write a Competitive Analysis: a Comprehensive Guide

• May 3, 2024
• Business Plan , How to Write

Writing a competitive analysis is like mapping out the playing field of your business. It helps you see who you’re up against, what you’re doing well, and where you could do better.

Whether you’re just starting or looking for ways to grow, understanding your competition is crucial. Let’s dive into how you can get a clear picture of your competition, and how to use it in your business plan.

What is a Competitive Analysis?

A competitive analysis is a comprehensive evaluation designed to assess the competitive landscape in which a business operates. It involves identifying your main competitors and critically analyzing their strategies, strengths, weaknesses, products, services, and market positioning.

The purpose of this analysis is not only to understand who your competitors are but also to evaluate how they meet their customers’ needs and how your offerings compare.

Key Components:

Here are the key components we include in a competitive analysis:

• Competitor Identification : Begins with identifying both direct competitors (those offering similar products or services) and indirect competitors (those offering alternative solutions to the same customer needs).
• Product and Service Comparison : Involves comparing your products and services against those of your competitors to identify similarities, differences, advantages, and disadvantages.
• Market Positioning : Examines how each competitor positions themselves in the market, including their marketing strategies , target audiences, and brand messaging.
• Strengths and Weaknesses : Assesses the internal factors that contribute to competitors’ success or shortcomings, such as proprietary technology, brand reputation, financial resources, and operational efficiencies.
• Opportunities and Threats : Identifies external factors that could represent opportunities or threats to your competitors, providing insights into potential market shifts, regulatory changes, technological advancements, and evolving customer preferences.
• Customer Base Analysis : Looks at the type of customers your competitors are attracting, their loyalty programs, customer service strategies, and feedback channels.

Why Do We Conduct Competitive Analysis?

The primary purpose of a competitive analysis is to equip businesses with the knowledge to make strategic decisions that enhance their competitive advantage. It helps in:

• Differentiation : Understanding what competitors offer allows a business to differentiate its products or services more effectively, highlighting unique features or benefits that address gaps in the market.
• Strategy Development : Insights gained can inform strategic decisions around marketing, sales, product development, and customer service, ensuring they are tailored to outmaneuver competitors.
• Anticipating Competitor Moves : By analyzing competitors’ strengths and weaknesses, businesses can better anticipate future moves, whether it’s a new product launch, market expansion, or pricing strategy .
• Market Trends Identification : Keeps businesses informed about broader market trends and customer preferences, ensuring they remain relevant and responsive to market demands.
• Risk Mitigation : Identifying threats in the competitive landscape allows businesses to develop contingency plans to address potential challenges proactively.

Why Do We Use a Competitive Analysis in a Business Plan?

We use a competitive analysis in a business plan for several key reasons:

• Market Understanding : It helps to gain a deep understanding of the market dynamics, including how saturated the market is, what the competitors offer, and where there might be gaps in the market.
• Strategic Positioning : By identifying your competitors’ strengths and weaknesses, you can better position your own business to compete effectively. It allows you to highlight what makes your business unique and attractive to potential customers.
• Opportunity Identification : Competitive analysis can reveal market trends and shifts that present new opportunities for your business, whether through innovation, market expansion, or diversification.
• Risk Management : Understanding the competitive landscape helps in anticipating potential threats and challenges your business might face, allowing you to develop strategies to mitigate these risks.
• Investor Confidence : Including a competitive analysis in your business plan demonstrates to investors and stakeholders that you have a realistic grasp of your industry and are aware of the competitive challenges. It reassures them that you are prepared to navigate these challenges effectively.
• Informed Decision Making : The insights gained from a competitive analysis can inform various aspects of your business strategy, from marketing and pricing to product development and customer service. This ensures that decisions are made based on a comprehensive understanding of the competitive environment.

How to Conduct a Competitive Analysis?

Preparing a competitive analysis involves several structured steps to ensure a comprehensive understanding of your competitive landscape. Here’s how to go about it:

1. Identify Your Competitors

• Direct Competitors : These businesses offer the same products or services as you do to the same target market .
• Indirect Competitors : These businesses offer different products or services that satisfy the same customer needs as yours.

Start with a broad list and then narrow it down to the most significant competitors for a detailed analysis.

2. Gather Information

Collect data on your identified competitors. Useful sources include:

• Competitors’ websites and social media profiles
• Customer reviews and feedback on platforms like Yelp, Google, or industry-specific forums
• Industry reports and market analysis documents
• Press releases and news articles

Look for information on their products, services, pricing, marketing strategies, target customers , market share, and any other relevant data.

3. Analyze Their Offerings

Compare your competitors’ products or services to your own. Consider:

• The range of products or services offered
• Quality and pricing
• Unique features or benefits
• Customer service and support
• Branding and marketing strategies

4. Evaluate Their Strengths and Weaknesses

Based on the information gathered, assess each competitor’s strengths and weaknesses. Consider their operational efficiency, customer loyalty, market positioning, innovation capabilities, and financial stability.

5. Identify Opportunities and Threats

From your analysis, determine:

• Opportunities : Areas where your competitors are not meeting customer needs effectively, market segments they are overlooking, or strategic alliances they haven’t formed.
• Threats : Competitors’ strategies that could pose a challenge to your business, such as aggressive pricing, new product launches, or market expansion plans.

6. Assess Their Marketing Strategies

Look at how your competitors are marketing their products or services:

• Which channels are they using? (e.g., social media, email marketing, SEO, PPC)
• What key messages are they conveying?
• How are they positioning their brand?

7. Summarize Your Findings

Create a detailed report summarizing your findings for each competitor, highlighting their key strengths, weaknesses, the opportunities they present to you, and the threats they pose.

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What Is Competitive Analysis and How to Do It Effectively

• 15 min read

Rebecca Strehlow, Copywriter at Crunchbase

Whether you’re an entrepreneur, market researcher or marketing enthusiast, knowing your competitors inside and out is a crucial part of the job. 

Competitive analysis is more than a quick online search; instead, it’s a systematic process that allows you to gain valuable insights into your competitive environment. By examining the strengths, weaknesses, strategies and market positions of rival companies, you can make informed decisions that help you come out on top.

Let’s dive into what competitor analysis is and how to do it, as well as the tools and templates you need to thrive in the modern market.

What is competitive analysis? 

Competitor analysis, often referred to as competitive analysis, is the systematic process of gathering and evaluating information about your competitors to gain a deep understanding of the competitive landscape in your industry. It involves delving into your competitors’ business models, marketing practices, product offerings, target audiences and much more.

This practice helps you keep a pulse on competing products in the market and make well-informed decisions for your business. It also enables you to find opportunities for growth, anticipate trends and proactively respond to potential threats.

Benefits of competitor analysis

The advantages of doing competitive analysis can have a meaningful impact on your bottom line. Here are just some of its key benefits: 

• Informed decision-making: By understanding your competitors’ strategies, you can make well-informed decisions about your own business. This includes choices related to product development, marketing and pricing.
• Identification of market opportunities: Competitor analysis can reveal gaps in the market or areas where your competitors may be underperforming. These insights can help you identify new opportunities for growth and expansion.
• Risk mitigation: By staying aware of your competitors’ activities, you can better anticipate potential threats and challenges. This proactive approach enables you to develop strategies to effectively mitigate risks and overcome threats before they happen.
• Benchmarking: Comparing your business to competitors helps establish benchmarks for performance. This allows you to measure your progress and identify areas where you excel or need improvement.
• Product and service enhancement: Analyzing competitors’ products and services can inspire improvements in your offerings, leading to increased customer satisfaction and loyalty.
• Improved marketing strategy: Understanding how your competitors market their products or services can help you refine your own marketing strategy to better reach your target audience.
• Adaptation to market shifts: The business environment is constantly evolving. Competitor analysis helps you stay agile and adapt to changes in customer preferences, technology and market trends.
• Competitive advantage: Armed with insights from competitive analysis, you can develop strategies to gain a competitive advantage in your industry.
• Long-term sustainability : Consistent competitor analysis allows your business to plan for the long term by identifying potential challenges and opportunities that may arise in the future.

Together, these benefits can empower you to thrive in the face of competition and establish a strong presence in the market. 

How to do competitor analysis 

To harness these advantages, you’ll need to learn how to perform competitive analysis effectively. The process is quite structured and involves several key steps to ensure that you gather relevant data and gain actionable insights.

• Identify your competitors
• Define your objectives
• Collect data
• Look for the 4 Ps
• Conduct a SWOT analysis

1. Identify your competitors

To pinpoint your competitors, create a list of organizations that compete with you both directly and indirectly in the marketplace. 

Direct competitors are organizations that offer similar products or services to the same target audience. In other words, they’re the businesses that potential customers could choose instead of your company.

To identify your direct competition, start by examining businesses that operate in the same industry or niche. Ask yourself questions such as:

• Who offers products or services that are nearly identical to ours?
• Who targets the same customer segments and geographical areas as we do?
• Who are our primary rivals when it comes to market share and sales?

Once you have identified these direct competitors, you can create a list or spreadsheet to keep track of their names, key characteristics and any available data that will be useful in your analysis.

Next, you’ll want to identify your indirect competitors. Indirect competitors serve a similar target market as your company, but may offer different products or services. They are indirect rivals because they can influence consumer choices, even though they are not in direct competition with your business. To identify indirect competitors:

• Look for businesses that serve the same customer needs, even if their products or services are not identical to yours.
• Consider how customers might choose between your offerings and those of indirect competitors.
• Examine businesses that could potentially expand into your market.

Including both direct and indirect competitors in your analysis provides a more holistic view of your competitive landscape and helps you anticipate shifts in consumer preferences or market dynamics.

Remember that the business environment is constantly changing, and new competitors may emerge over time. Regularly updating your list of competitors is essential to ensure that your competitor analysis stays relevant.

2. Define your objectives

The next step in competitive analysis is to clearly outline your objectives. This will ensure that you’re gathering relevant information that directly supports your business strategy. Here’s how to define your objectives effectively:

• Clarify your goals: Begin by outlining your overarching goals. Common objectives may include improving market share, optimizing pricing strategies, enhancing product development or refining marketing tactics.
• Identify your information needs: Use your goals to determine exactly what kind of information you’ll need. Ask yourself: What kind of data or insights will be most helpful in achieving your stated objectives? For example, if you want to improve product development, you may need data on your competitors’ product features, customer reviews and pricing.
• Develop KPIs: Write down the key performance indicators that are most relevant to your objectives. KPIs are quantifiable metrics that will help you measure your progress. For instance, if your goal is to enhance marketing strategies, relevant KPIs might include website traffic, conversion rates or social media engagement.
• Determine a time frame: Understanding the time frame of this project will influence the depth and scope of your analysis. Are you conducting a one-time competitor analysis, or is this an ongoing process? 
• Align with business strategy: Ensure that the above aligns with your overall business strategy. Your competitor analysis should directly contribute to the success and growth of your business.
• Adapt when necessary: Be open to adjusting your objectives as needed. The business landscape can change rapidly, and you may need to adapt in response to new opportunities or challenges.

When you define your objectives, you give yourself a clear roadmap for your research. This helps you focus on gathering the most pertinent data and ensures that your analysis directly benefits your business. Whether you’re looking to outperform competitors in a particular area or gain a broader understanding of the competitive landscape, well-defined objectives are the cornerstone of a successful analysis. 

3. Collect data

Effective data collection is another fundamental step in the competitor analysis process, as the quality and relevance of the data you gather directly influence the insights you gain. Begin by identifying data sources that will give you the information you’re looking for. These sources can include both online and offline channels.

Online sources are often the richest and most accessible. Common data sources for competitive monitoring include:

• Crunchbase : Crunchbase is a valuable resource for gathering data about companies, including your competitors. It offers details about a company’s firmographics, funding, leadership team, investor relationships and key metrics. This data helps you understand your competitors’ financial health, investment history, growth strategies and potential areas of expansion. 
• Company websites: Competitor websites are valuable sources of information about your competitors’ products, services, pricing and promotional strategies. They provide direct insights into how your competitors present themselves to customers and the market. 
• Social media: Social media platforms such as Facebook , X (formerly Twitter) , Instagram and LinkedIn offer a glimpse into your competitors’ marketing and promotional efforts. Analyze their posts, content engagement and follower interactions to understand their messaging and customer engagement strategies. You can also use social media to monitor comments, reviews and conversations to gauge customer sentiment and identify your competitors’ strengths and weaknesses.
• Customer review sites: Review sites like G2 , Capterra or dedicated industry-specific review platforms also offer candid customer feedback. Analyze the reviews to understand customer satisfaction levels, identify pain points and discover areas where your competitors excel or underperform. Some reviews may also mention pricing, which can help you determine how customers perceive the value of your competitors’ products or services.
• Market reports: Market research companies like Nielsen , Gartner , Forrester and Euromonitor International often produce comprehensive market reports across various industries. They often include data on market size, growth projections and emerging opportunities, helping you assess the overall landscape your competitors operate in. Market reports may also include company profiles, giving you information about their market share, strategies and financial performance. 
• Industry publications: Business publications and journals often publish in-depth articles and analysis about trends, innovations and market players. They can provide valuable information about your competitors’ strategies, market positioning and noteworthy developments. Crunchbase News , which offers data-driven reporting on private markets, is a great place to start.
• Government databases: Government databases can provide access to financial and regulatory information about companies, including your competitors. This data may include financial statements, business registrations and industry-specific regulatory compliance, helping you understand their financial health and legal compliance.

As you gather this data, make sure you have an organized place to put it. A good idea is to create a competitor matrix, also referred to as a competitor grid, which is a spreadsheet for organizing your research. List out your competitors on one axis of the grid (either the horizontal or vertical axis is fine). On the other axis, list the data points you’re looking to collect, such as company location, market position, price and branding.

A couple additional notes: pay attention to both your data accuracy as well as any ethical considerations. Confirm that the information you gather is up to date and reliable, as outdated or inaccurate data can lead to erroneous conclusions. On top of that, be mindful of legal requirements. Respect privacy rights, copyright and intellectual property laws when gathering data.

4. Look for the 4 Ps

Next, you’ll want to analyze your competitors’ marketing strategies. A systematic way to approach this is by looking at the 4 Ps of marketing, also known as the marketing mix. These are product, price, place and promotion, which you can break down into the following questions:

• What are the key features and attributes of our competitors’ products?
• How does the quality of our competitors’ products compare to ours?
• Are there any unique or innovative features in our competitors’ products that we should be aware of?
• What is the product life cycle of our competitors’ offerings, and how does that impact their market presence?
• How do our competitors brand and position their products in the market?
• Do our competitors offer a wide product range, or do they focus on a niche market?
• What are the customer reviews and feedback on our competitors’ products, and what strengths or weaknesses do they highlight?
• How do our competitors handle product updates, customer support and warranties?
• What are the pricing strategies employed by our competitors (e.g., premium, value, competitive or penetration pricing)?
• How do our competitors price their products or services compared to our pricing?
• What types of discounts, promotions or special offers do our competitors use, and how frequently do they change them?
• Do our competitors offer bundle pricing or product packages?
• How do our competitors handle pricing changes and adjustments based on market conditions or demand?
• What is the perceived value of our competitors’ products or services in relation to their pricing?
• Are there any loyalty programs or customer rewards related to pricing that our competitors offer?
• How do competitors communicate their pricing to customers, and does it align with their branding and positioning strategies?

Place (distribution)

• What distribution channels do our competitors use to reach their customers (e.g., direct sales, retailers, e-commerce or wholesalers)?
• How extensive is the geographic reach of our competitors’ distribution networks?
• Are there specific partnerships or collaborations that our competitors have with distributors or retailers?
• What is the availability and accessibility of our competitors’ products or services, both online and offline?
• How do our competitors handle inventory management, logistics and fulfillment to ensure timely delivery to customers?
• Do our competitors have a physical presence, and how does it impact their brand and customer engagement?
• What is the overall customer experience with the distribution and availability of our competitors’ offerings?
• Are there any supply chain or distribution challenges that our competitors face?
• What are the core elements of our competitors’ marketing and advertising strategies (e.g., online ads, content marketing, social media, traditional media)?
• How do our competitors position their brand, and what is their unique selling proposition?
• What messaging and tone do our competitors use in their advertising and marketing campaigns?
• How do our competitors engage with customers on social media, and how do they manage their online reputation?
• What content marketing tactics do our competitors employ to educate and engage their audience?
• Do our competitors use influencer marketing or partnerships with other brands or organizations?
• What customer feedback, testimonials or case studies do our competitors use in their promotional materials?
• How do our competitors measure the success and impact of their promotional efforts, and what adjustments do they make based on these metrics?

These questions will force you to think hard about your competitors and the ways they position their product or service in the market. Be sure to make a note of these data points so you have an organized spreadsheet with your competitive analysis. 

5. Conduct a SWOT analysis

Now, conduct a SWOT analysis using all the data and insights you’ve gathered. A SWOT analysis is a competitive analysis framework for systematically evaluating your competitors’ strengths, weaknesses, opportunities and threats. Create a table or slide deck with the following notes about each competitor:

• Strengths: Consider areas like product quality, brand reputation, financial stability and unique capabilities. What does your competitor excel at? What are their key assets and resources? What advantages do they have over your business and other competitors?
• Weaknesses: Analyze your competitors’ weaknesses, which are internal factors that put them at a disadvantage. Evaluate areas where they struggle, such as customer service issues, product limitations or operational inefficiencies. Where does your competitor fall short? What are their operational or financial weaknesses? Are there aspects of their products or services that receive consistent criticism?
• Opportunities: Consider the external factors and opportunities that your competitors can capitalize on. These may include market trends, emerging customer needs, technological advancements or changes in regulations. Here, you’ll want to ask yourself the following questions: What market opportunities are your competitors pursuing? Are there emerging trends that they are well-positioned to benefit from? How do they adapt to changing market conditions and customer demands?
• Threats: Evaluate the external factors and threats that pose risks to your competitors’ business. These could be increased competition, economic downturns, changing consumer preferences or regulatory challenges. What are the external threats that our competitors face? How do market or industry conditions pose risks to their operations? Are there competitive pressures that could erode their market share?

After identifying the strengths, weaknesses, opportunities and threats of your competitors, it’s time to analyze the findings. Look for connections and relationships between these factors. For example, how do strengths offset weaknesses, or how can opportunities be leveraged to mitigate threats? Consider how these factors impact your competitors’ overall competitive positioning.

Competitive analysis templates

Competitive analysis is a complex task, but you don’t have to start from scratch. These competitor analysis templates provide a structured framework for gathering and analyzing data about your competitors:

• Competitor research template
• Competitor matrix template
• Social media competitor analysis template
• SWOT analysis template

1. Competitor research template

This advanced search template is a helpful starting point for gathering data about competing companies. You can customize the template by adding multiple search filters, such as industry, geographic location and funding information, to pull up the companies that match your competitor profiles. The more you fine-tune your search, the more precise your list of competitors will be.

2. Competitor matrix template

A competitor matrix template , like this one from HubSpot , allows you to systematically compare key features, pricing and other attributes of your products or services with those of your competitors. By comparing these attributes side by side, you can better assess your biggest threats and identify areas where your business can excel.

3. Social media competitor analysis template

This social media competitor analysis template offers a structured framework for assessing and comparing your social media performance with that of your competitors. With sections for tracking key metrics, content strategies, audience engagement and more, this template simplifies the process of understanding how your social media efforts stack up against the competition. 

4. SWOT analysis template

This SWOT analysis template represents one of the most important types of competitive analysis templates. A template can simplify the SWOT analysis process and ensure that nothing falls through the cracks, helping you identify areas for improvement, capitalize on advantages and mitigate potential risks.

Competitive analysis examples

To understand how competitive analysis works in practice, let’s explore a few real-world examples that highlight its significance within different industries:

1. Apple vs. Samsung

Tech giants Apple and Samsung have long been rivals in the smartphone market. Both companies must scrutinize each other’s product launches, innovations and market share to stay competitive. Their competitive analysis involves a deep dive into one another’s product features, pricing strategies, branding and marketing tactics. 

2. Coca-Cola vs. Pepsi

Coca-Cola and PepsiCo have engaged in one of the most iconic and enduring business rivalries. Competitor analysis here includes assessing their advertising campaigns, product diversification, distribution networks and customer preferences. These two giants need to continuously monitor each other’s market positioning in order to win over consumers.

3. Amazon vs. Walmart

Amazon and Walmart are leaders in e-commerce and retail. They must perform ongoing competitive analysis to compare delivery speeds, pricing structures, customer experience and market expansion strategies. Both companies are committed to staying ahead by understanding the strengths and weaknesses of the other.

4. Airbnb vs. Booking.com

Another iconic competitor analysis example is within the online travel industry. Airbnb and Booking.com are key competitors that need to evaluate each other’s user reviews, property listings, pricing and website user experience. Both platforms continuously track each other’s offerings to enhance their competitive position.

5. Nike vs. Adidas

Nike and Adidas are major players in the athletic apparel industry. These companies closely follow each other’s strategies to dominate the market. Their competitive analysis includes examining product innovations, brand endorsements, athlete sponsorships and global market presence. 

Competitor analysis tools 

In order to conduct robust competitive analysis like the companies above, you’re going to need the right tools. These include everything from online databases to website monitoring platforms. Here are our top recommendations: 

1. Crunchbase

Crunchbase is a comprehensive business intelligence tool that provides best-in-class data about both public and private companies, including your competitors. You’ll get insights into funding, leadership teams, key metrics and investor relationships, allowing you to understand your competitors’ financial health, investment history and market focus. This information is vital for identifying potential threats in the market, as well as opportunities to differentiate yourself. Learn more about market research on Crunchbase .

2. Brandwatch

Brandwatch is a social listening and consumer intelligence platform that helps you monitor your competitors’ social media mentions, customer sentiment and brand reputation. This allows you to gauge public sentiment about your competitors and identify areas where you can strengthen your brand’s image and stand out in the market.

SEMrush is most commonly known as an SEO platform, but it’s also a useful competitive analysis tool. It helps you analyze your competitors’ digital marketing strategies, keywords, backlinks and advertising efforts. Ultimately, this gives you insights into your competitors’ online presence and helps you identify their strengths and weaknesses in the digital space. Note that you can view SEMrush web traffic data directly from Crunchbase .

4. SimilarWeb

SimilarWeb is a market intelligence platform that offers insights into website traffic, audience demographics and online performance. It allows you to benchmark your website’s performance against those of your competitors, discover their traffic sources and understand their online audiences.

IPqwery is a competitive analysis tool that offers insights into your competitors’ patent portfolios, technological innovations and intellectual property strategies. This allows you to assess innovation, identify potential partnerships, and evaluate the intellectual property landscape. IPqwery data is available with Crunchbase Data Boost .

Achieve sustainable growth with competitor analysis

Competitive analysis doesn’t only involve gathering information, but it’s also about turning insights into actions that drive your business forward. Competitor analysis is an important part of market research for startups and large companies alike, as it’s fundamental for long-term success. By carefully assessing your rivals and industry trends, you can adapt your strategies and stay ahead of the curve. 

• market research
• Originally published October 26, 2023, updated December 19, 2023

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• How to Raise Money With Your Business Plan
• Customers and Investors Don't Want Products. They Want Solutions.
• Write Your Business Plan | Part 4 Overview Video
• 5 Essential Elements of Your Industry Trends Plan
• How to Identify and Research Your Competition
• Who Is Your Ideal Customer? 4 Questions to Ask Yourself.
• How to Identify Market Trends in Your Business Plan
• How to Define Your Product and Set Your Prices
• How to Determine the Barriers to Entry for Your Business
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How to Identify and Research Your Competition Emphasizing your competitive advantage is an essential part of any business plan.

By Eric Butow Oct 27, 2023

Key Takeaways

• Why competitive analysis matters
• Questions to ask about your industry
• How to find similar companies

Opinions expressed by Entrepreneur contributors are their own.

This is part 3 / 9 of Write Your Business Plan: Section 4: Marketing Your Business Plan series.

Successful entrepreneurs are renowned for intuitively feeling a market's pulse, project trends before anyone else detects them, and identifying needs that even customers are unaware of. After you are famous, perhaps you can claim a similar psychic connection to the market. But for now, you'll need to reinforce your claims to market insight by presenting solid research in your plan.

Market research aims to understand the reasons consumers will buy your product. It studies consumer behavior, specifically how cultural, societal, and personal factors influence that behavior. For instance, market research aiming to understand consumers who buy in-line skates might study the cultural importance of fitness, the societal acceptability of marketing directed toward children and teens, and the effect of personal influences such as age, occupation, and lifestyle in directing a skate purchase.

Related: 4 Effective Ways To Accomplish This Missing Step That Most Entrepreneurs Overlook

Market research is often split into two varieties: primary and secondary. Primary research studies customers directly, whereas secondary research studies information others have gathered about customers. Primary research might be telephone interviews or online polls with randomly selected target group members. You can also study your own sales records to gather primary research. Secondary research might come from reports on other organizations' websites or blogs about the industry.

Conducting market research provides answers to those unknown elements. It will greatly reduce risk as you start your business. It will help you understand your competitive position and the strengths and weaknesses of your competitors. And it will improve your marketing and sales process."

Related: You Need Consumer Insights To Ensure The Success Of Your Business. Here Are Five Ways To Find Them.

Questions to Ask About Your Industry

To start preparing your industry analysis and outlook, dig up the following facts about your field:

• What is your total industry-wide sales volume? In dollars? In units?
• What are the trends in sales volume within your industry?
• Who are the major players and your key competitors? What are they like?
• What does it take to compete? What are the barriers to entry?
• What technological trends affect your industry?
• What are the main modes of marketing?
• How does government regulation affect the industry?
• In what ways are changing consumer tastes affecting your industry?
• What are recent demographic trends affecting the industry?
• How sensitive is the industry to seasons and economic cycles?
• What are key financial measures in your industry (average profit margins, sales commissions, etc.)?

Related: 5 Essential Elements of Your Industry Trends Plan

How to Find Similar Companies

Find a close match when looking at comparable businesses (and their data). For comparative purposes, consider:

• Companies of relative size.
• Companies serving the same geographic area could be global if you plan to be a web-based business.
• Companies with a similar ownership structure. If you are two partners, look for businesses run by a couple of partners rather than an advisory board of twelve.
• Relatively new companies. While you can learn from long-standing businesses, they may be successful today because of their twenty-five-year business history and reputation.

You will want to use the data you have gathered to determine how much business you could do and to figure out how you will fit into and adapt to the marketplace.

Related: How to Make Your Business Stand Out

How To Do Original Research

One limitation of in-house market information is that it may not include exactly what you're looking for. For instance, if you'd like to consider offering consumers financing for their purchases, it's hard to tell how they'd like it since you don't already offer it.

You can get around this limitation by conducting original research—interviewing customers who enter your store, for example, or counting cars that pass the intersection where you plan to open a new location—and combining it with existing data. Follow these steps to spending your market research dollars wisely:

Determine what you need to know about your market. The more focused the research, the more valuable it will be.

• Prioritize the results of the first step. You can't research everything, so concentrate on the information that will give you the best (or quickest) payback.
• Review less expensive research alternatives. Small Business Development Centers and the Small Business Administration can help you develop customer surveys. Your trade association will have good secondary research. Be creative.
• Estimate the cost of performing the research yourself. Keep in mind that with the internet you should not have to spend a ton of money. If you're considering hiring a consultant or a researcher, remember this is your dream, these are your goals, and this is your business.
• Don't pay for what you don't need.

Related: The One Simple Task That Will Help Your Startup Succeed

More in Write Your Business Plan

Section 1: the foundation of a business plan, section 2: putting your business plan to work, section 3: selling your product and team, section 4: marketing your business plan, section 5: organizing operations and finances, section 6: getting your business plan to investors.

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How to Do a Competitive Analysis

Regular competitive analyses can help you spot opportunities to innovate, promote your business, enhance your products or services, and outshine your competition.

Table of Contents

A competitive analysis is a tool you can use to discover where your business is doing well, where you need to improve and which trends you need to get ahead of. Complete a competitive analysis when your company isn’t moving forward as fast as you want or when competitors are securing orders from your ideal customers.

In this article, we’ll explain the concept of a competitive analysis and how to perform one for your business.

How to complete a competitive analysis

Josh Rovner, business consultant and bestselling author of Unbreak the System: Diagnosing and Curing the Ten Critical Flaws in Your Company (Lioncrest Publishing, 2020), shared with us nine steps for completing a competitive analysis.

1. Identify the products or services you want to evaluate.

For most analyses, they will be the products or services that generate the highest revenues or demonstrate the most significant potential for growth.

2. Seek direct competitors.

These companies compete for roughly the same market with comparable products or services. For example, accountants competing against other accountants.

3. Pinpoint indirect competitors.

These companies target the same market but with different products or services. For example, accountants competing against bookkeepers.

4. Examine replacement competitors.

These companies offer a different product or service, but address the same issue as your products or services (for example, apps that assist entrepreneurs).

5. Determine which parts of your competitors’ businesses are worth investigating.

These aspects could be pricing, distribution and delivery strategies, market share, new products or services coming to market, who their long-standing, highest-spending customers are, the quality of after-sales support, and which sales and marketing channels they use.

6. Research all identified competitors.

You may only find minimal accounting and operational records for most competitors, especially nonpublic companies. Other useful information – like target customers, product features, type of staff employed and price points – will be easier to find.

7. Document your research in a written analysis.

Make sure your document is substantive and actionable, but not so long that your staff won’t read it. Comparison charts and graphs are useful to help you and your team visualize your position in the market in relation to your competitors.

8. Identify areas to improve and execute the changes.

Could you improve the quality of your products or services by adding or amending a feature, lowering the price to be more affordable or improving after-sales support? Could you achieve a better ROI on your marketing budget by investing in a more capable CRM for better lead management ?

Rovner recommends including information about related trends in your market and region for a more complete picture of the entire competitive landscape. “Document what threats are out there that could have a negative impact on your business, and document the opportunities out there that you could take advantage of better than your competitors.”

9. Track your results.

Measure your sales with a profit and loss statement to determine if the changes were successful.

Competitive analysis explained

A competitive analysis – also known as a competitor analysis – is a way of evaluating how well your business and its products or services are performing compared to other companies selling similar products or services in your market.

“A competitor analysis focuses on identifying market participants positioned to encroach on your opportunity and isolates each participant’s operational strengths, substantive weaknesses, product offerings, market dominance, and missed opportunities,” said David Taffet, CEO of Petal.

Competitor analyses help you improve your business in these ways:

• Identify your strengths and weaknesses. When you know where you’re ahead of the competition, you can focus your marketing message to press home that advantage. When you know where you’re behind, you can better understand how you need to improve your products, services or after-sales to exceed your competitors.
• Understand the marketplace you operate in. You know who many of your competitors are but you won’t know all of them right off the bat and may not be aware of the latest entrants to the market . Identifying your primary competitors (as well as any upcoming threats), and how they differ from your business is key to beating them.
• Evaluate trends in your sector. Which new or improved product, service or feature are competitors offering to gain an advantage? Which trends have they seen that you haven’t yet? By examining the behaviors and actions of other companies in your marketplace, you can judge whether they’ve taken the right course and whether you should be going head-to-head with them. [Related content: Top E-Commerce Challenges Facing SMBs ]
• Plan future growth. Want to be the third-largest firm in your sector instead of the fourth? A competitive analysis gives you the information you need to get there, including how much more you need to sell, the demographics to market and any skill gaps your organization has.

Factors your competitor analysis should include

Colin Schacherbauer, executive marketing assistant at Investor Deal Room, recommended the following 10 components for an effective competitor analysis.

Feature matrix

Find all the features that each direct competitor’s product or service has. Keep this information in a competitor insight spreadsheet to visualize how companies stack up against one another.

Market share percentage

Evaluating the marketplace by percentage helps identify the main competitors in your area. Don’t exclude larger competitors entirely, as they have much to teach you about how to succeed in your industry. Instead, practice the 80/20 rule: Keep an eye on 80% direct competitors (companies with similarly sized market shares) and 20% top competitors.

Pinpoint how much your competitors charge and where they fall on the quantity versus quality spectrum.

What type of marketing plan does each competitor employ? Look at competitors’ websites, their social media strategy, the type of events they sponsor, their SEO strategies, their taglines and current marketing campaigns. [Follow these tips to create a great business marketing plan .]

Differentiators

What makes your competitors unique and what do they advertise as their best qualities? How is that different from your company?

Identify what your competitors are doing well and what works for them. Do reviews indicate they have a superior product? Do they have high brand awareness? Can you test a competitor’s products yourself to see where they are performing better?

Identify what each competitor could be doing better to give you a competitive advantage. Do they have a weak social media strategy? Do they lack an online store? Is their website outdated?

Look at where your competitors are located and the regions they service. Are they brick-and-mortar companies or is the bulk of their business performed online?

Evaluate your competitors’ objectives, employee satisfaction and company culture . Are they the type of business that advertises the year it was established or are they recent startups? Read employee reviews for further insight into competitors’ culture. [Learn the best ways to improve your company culture .]

Customer reviews

Analyze your competitors’ customer reviews, both positive reviews and negative ones. In a 5-star system, look at 5-star, 3-star and 1-star reviews. Three-star reviews are often the most honest.

Benefits of carrying out a competitive analysis

In an era of digital innovation , no business can remain preserved in time and expect to survive. Companies can disappear overnight if they don’t pay attention to new trends. A clear example of this is Blockbuster’s catastrophic error of initially dismissing Netflix’s services. Today, Netflix is a juggernaut, while Blockbuster is virtually extinct.

Even if your sector is not susceptible to this type of seismic change, it’s worth knowing what drives your clients’ decision-making processes. By keeping a regular eye on your marketplace through a competitive analysis, you’ll also be aware of these trends:

• Changes to competitors’ existing products or services that make them more attractive
• New complementary products or services from your contenders that you could also offer or alter
• The threat posed by new market entrants or transformative products

“In some cases, you may find that you are at a competitive disadvantage, in which case you may need to make a change in order to maintain your sales volumes,” Rovner said. “In other cases, you may notice that you have an advantage that could enable you to make a change that increases your sales or profit.”

How often you should perform a competitive analysis

Regular competitive analysis is key. You may want to do the analysis once a year on a large scale and quarterly on a smaller scale.

“Too many businesses do a competitor analysis early on and then neglect it once their brand is established,” Schacherbauer added. “Industries are constantly changing, and each time a new company enters your space, they are doing a competitor analysis on you. It’s important to continually evaluate your competitors.”

Analyzing your business regularly against your competitors will reveal opportunities to improve your products, better serve your target customers and increase levels of profitability. You may also want to consider using another model – like Porter’s Five Forces – to further analyze the competition.

“Understanding one’s competitors allows one to distinguish oneself from the competition, focus on the underserved market opportunities, determine the services to offer, identify the best practices to employ and isolate the worst practices and rotten players,” Taffet said.

How competitive analyses help small businesses

Your successful business today won’t necessarily be a successful tomorrow if you don’t keep an eye on the competition. By employing a competitive analysis, you can evaluate the current marketplace and where you stand compared to your competitors. With that knowledge, you can make adjustments to set your company up for continued success.

Skye Schooley contributed to the writing and reporting in this article. Source interviews were conducted for a previous version of this article.

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How to Write the Competitor Analysis Section of the Business Plan

Writing The Business Plan: Section 4

Susan Ward wrote about small businesses for The Balance for 18 years. She has run an IT consulting firm and designed and presented courses on how to promote small businesses.

The competitor analysis section can be the most difficult section to compile when writing a business plan because before you can analyze your competitors, you have to investigate them. Here's how to write the competitor analysis section of the business plan.

First, Find Out Who Your Competitors Are

If you're planning to start a small business that's going to operate locally, chances are you already know which businesses you're going to be competing with. But if not, you can easily find out by doing an internet search for local businesses, looking in the online or printed local phone book, or even driving around the target market area. 

Your local business may also have non-local competitors that you need to be aware of.

If you're selling office supplies, for instance, you may also have to compete with big-box retailers within a driving distance of several hours and companies that offer office supplies online. You want to make sure that you identify all your possible competitors at this stage.

Then Find Out About Them

You need to know:

• what markets or market segments your competitors serve;
• what benefits your competitors offer;
• why customers buy from them;
• as much as possible about their products and/or services, pricing, and promotion.

Gathering Information for Your Competitor Analysis

A visit is still the most obvious starting point - either to the brick and mortar store or to the company's website. Go there, once or several times, and look around. Watch how customers are treated. Check out the prices.

You can also learn a fair bit about your competitors from talking to their customers and/or clients - if you know who they are. Other good "live" sources of information about competitors include a company's vendors or suppliers and a company's employees. They may or may not be willing to talk to you, but it's worth seeking them out and asking.

And watch for trade shows that your competitors may be attending. Businesses are there to disseminate information about and sell their products or services; attending and visiting their booths can be an excellent way to find out about your competition.

You'll also want to search for the publicly available information about your competitors. Online publications, newspapers, and magazines may all have information about the company you're investigating for your competitive analysis. Press releases may be particularly useful. 

Once you've compiled the information about your competitors, you're ready to analyze it. 

Analyzing the Competition

Just listing a bunch of information about your competition in the competitor analysis section of the business plan misses the point. It's the analysis of the information that's important.

Study the information you've gathered about each of your competitors and ask yourself this question: How are you going to compete with that company?

For many small businesses, the key to competing successfully is to identify a market niche where they can capture a  specific target market  whose needs are not being met.

• Is there a particular segment of the market that your competition has overlooked?
• Is there a service that customers or clients want that your competitor does not supply? 

The goal of your competitor analysis is to identify and expand upon your competitive advantage - the benefits that your proposed business can offer the customer or client that your competition can't or won't supply.

Writing the Competitor Analysis Section

When you're writing the business plan, you'll write the competitor analysis section in the form of several paragraphs. 

The first paragraph will outline the competitive environment, telling your readers who your proposed business's competitors are, how much of the market they control and any other relevant details about the competition.

The second and following paragraphs will detail your competitive advantage, explaining why and how your company will be able to compete with these competitors and establish yourself as a successful business.

Remember; you don't have to go into exhaustive detail here, but you do need to persuade the reader of your business plan that you are knowledgeable about the competition and that you have a clear, definitive plan that will enable your new business to successfully compete.

How to Write the Competitive Analysis of a Business Plan

Written by Dave Lavinsky

If you are writing a business plan, hopefully by this point you’ve conducted thorough market research to identify industry trends and identified the target market for your business. Now it’s time to conduct a competitor analysis. This section is included in virtually every simple business plan template , and the information you include will depend on several factors such as how many competitors there are, what they offer, and how large they are in comparison to your company.

Download our Ultimate Business Plan Template here

What is a Competitive Analysis?

A competitive analysis is a type of market research that identifies your competitors, their strengths and weaknesses, the strategies they are using to compete with you, and what makes your business unique. Before writing this section it’s important to have all the information you collected during your market research phase. This may include market data such as revenue figures, cost trends, and the size of the industry.

Why Do You Need the Competitive Analysis?

If you are planning to raise capital, the investor will require a business plan that includes the competitive analysis section. This section will also come in handy while writing a business plan template , if your company is considering increasing prices or adding new products and services. You can use the information you find to determine how well-positioned your business is to perform in the competitive landscape.

3 Steps to Writing a Competitive Analysis

The steps to developing the competitive analysis section of your business plan include:

• Identify your competition.
• Select the appropriate competitors to analyze.
• Determine your competitive advantage.

1. Identify Your Competition

To start, you must align your definition of competition with that of investors. Investors define competition as to any service or product that a customer can use to fulfill the same need(s) as the company fulfills. This includes companies that offer similar products, substitute products, and other customer options (such as performing the service or building the product themselves). Under this broad definition, any business plan that claims there are no competitors greatly undermines the credibility of the management team.

When identifying competitors, companies often find themselves in a difficult position. On one hand, you may want to show that the business is unique (even under the investors’ broad definition) and list few or no competitors. However, this has a negative connotation. If no or few companies are in a market space, it implies that there may not be a large enough base of potential customers to support the company’s products and/or services.

2. Select the Appropriate Competitors to Analyze

Once your competition has been identified, you want to consider selecting the most appropriate competitors to analyze. Investors will expect that not all competitors are “apples-to-apples” (i.e., they do not offer identical products or services) and therefore will understand if you chose only companies that are closest in nature. So, you must detail both direct and, when applicable, indirect competitors.

Direct competitors are those that serve the same potential customers with similar products and services. If you sell your products or services online, your direct competitors would also include companies whose website ranks in the top 5 positions for your same target keyword on Google Search.

For example, if you are a home-based candle-making company , you would consider direct competitors to be other candle makers that offer similar products at similar prices. Online competitors would also include companies who rank for the following keywords: “homemade candles”, “handmade candles”, or “custom candles.”

Indirect competitors are those that serve the same target market with different products and services or a different target market with similar products and services.

In some cases, you can identify indirect competitors by looking at alternative channels of distribution. For example, a small business selling a product online may compete with a big-box retailer that sells similar products at a lower price.

After selecting the appropriate competitors, you must describe them. In doing so, you must also objectively analyze each of their strengths and weaknesses and the key drivers of competitive differentiation in the same market.

For each competitor, perform a SWOT Analysis and include the following information:

• Competitor’s Name
• Overview of Competitor (where are they located; how long have they been operating)
• Competitor’s Product or Service
• Competitor’s Pricing
• Estimated Market Share
• Location(s)
• Potential Customers (Geographies & Segments)
• Competitor’s Strengths
• Competitor’s Weaknesses

By understanding what your competitors offer and how customers perceive them, you can determine your company’s competitive advantage against each competitor.

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3. Determine Your Competitive Advantage

Perhaps most importantly, you must describe your company’s competitive advantages over the other companies in the space, and ideally how the company’s business model creates barriers to entry. “Barriers to entry” are reasons why it would be difficult for new companies to enter into or compete in the same market.

For instance, you may have a patent that provides value to your customers and makes them less likely to switch suppliers, which protects your business from potential competitors. Or, you may have more resources than the competition and thus be able to provide superior customer service.

Below is a list of areas in which you might have a competitive advantage:

• Size of the Company – Large companies have more resources and can usually offer lower prices than smaller businesses. This is a significant barrier to entry, as starting a small business and competing with a larger company may be difficult.
• Product or Service Differentiation – If your product or service is unique in some way, this will make it less likely that customers will switch to a competitor.
• Experience & Expertise – Experience and knowledge are valuable attributes that can help differentiate you from the competition.
• Location – If you are located in an area where there is high demand for your product or service, this can be a barrier to entry because competitors will not want to open new locations.
• Patents & Copyrights – Protecting intellectual property can prevent others from entering the same market and competing with your company.
• Brand Recognition – Customers are loyal to brands they have come to trust, which protects the company from new competitors.
• Customer Service – Providing excellent customer service can help you retain customers and prevent them from switching suppliers.
• Lowest Cost Offerings – If you can offer a lower price than your competitors, this makes it more difficult for them to compete with you.
• Technology – New technology that enables you to provide a better product or service than your competitors can be an advantage.
• Strategic Partnerships & Alliances – Collaborating with a company that your customers want to work with can help keep them from switching.
• Human Resources – If you have a highly skilled and talented workforce, it can be difficult for competitors to find and employ the same skills.
• Operational Systems – Strong operational systems that lead to greater efficiencies can protect your business from the competition.
• Marketing Strategy – Investing in strong marketing campaigns can make your business difficult to compete with.

For instance, you could say that your [enter any of the bullets from above] is better than your competitors because [insert reason].

The competitive landscape is one of the most important considerations in developing a business plan since it sets the stage by providing information on past and current competitors and their respective strengths and weaknesses. A strong understanding of the competitive landscape is needed before you can develop a strategy for differentiating your company from the competition. Follow the above competitive analysis example and you will be well-prepared to create a winning competitor analysis section of your business plan.

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Other Resources for Writing Your Business Plan

How to Write a Great Business Plan Executive Summary

How to Expertly Write the Company Description in Your Business Plan

The Customer Analysis Section of Your Business Plan

How to Write the Market Analysis Section of a Business Plan

The Management Team Section of Your Business Plan

Financial Assumptions and Your Business Plan

How to Create Financial Projections for Your Business Plan

Everything You Need to Know about the Business Plan Appendix

Business Plan Conclusion: Summary & Recap

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How to Perform a Competitor Analysis (Examples & Templates)

Written by: Masooma Memon

Thorough competitor analysis is a crucial aspect of any marketing plan .

It helps you understand how challenging it could be to crack a market, what strategies could work, and how you can best position your brand.

It can also tell you what strategies won’t work, what the customer’s expectations are and how much they’re willing to pay.

Without it, you likely won’t survive a day in a new market.

You need to study your competition not only when you’re starting out but also periodically after cementing your feet in the market. This way, you can stay on top of your game, consistently growing your market share.

Not sure where to start?

We’ve got an easy, 6-step competitor analysis template for you in this guide. We’ll also share templates to help you document your findings.

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Table of Contents

What is a competitor analysis, the benefits of competitor analysis for businesses, how to conduct a competitor analysis (step-by-step), 10 competitor analysis templates to use right away, ready to try out this competitor analysis template.

Competitor analysis is the strategic research of your competitors to study their strengths and weaknesses.

By taking the time to analyze your current and potential competitors, you can identify areas for improvement. You want to look out for things like their value proposition, product, marketing and sales tactics.

Besides helping you find gaps in the market, studying your competition helps in the following ways:

• Identify ways to outperform your competitors.
• Understand market trends so you can make sure your business is consistently meeting and even exceeding industry standards.
• Learn what your competitors are doing right. This is important for staying relevant in your market and growing your market share.
• Find out how your product is different from other similar products. This helps you improve brand positioning and informs your marketing copy.

A competitor analysis seeks to study all available information on your competitors, including their pricing, differentiators, positioning, product portfolio, strengths and weaknesses.

The steps below will help you uncover all this and more.

Step 1: Create a List of Your Competitors

Chances are you can recall who your competitors are in a breath.

But if you’re new, identifying who your direct and indirect competitors are will take some time.

Keep in mind that direct competitors offer products and services similar to yours, positioning them as a substitute for your business. They also mostly target the same audience.

On the flip side, indirect competitors are businesses that don’t necessarily offer the same product or service. However, their offering can solve the same customer problem that your business solves.

An easy, cost-effective way to identify competitors is by typing in your product type into the Google search bar.

Let’s suppose you have a project management software . A quick Google search on this will turn up names of companies offering the same type of software.

For creating a comprehensive list of competitors, make sure you google synonyms too. This could be a “project management tool” for the example above.

Another useful tactic is to conduct the same research on social media .

Type in what your business does and you’ll see similar business names pop up.

You can also surf hashtags to learn how other companies are using them.

Lastly, if you’re conducting market research interviews , pay attention to the brand names that target buyers mention in their interviews.

Step 2: Study Competitors’ Product Offerings and Market Share

Once you know who your competitors are, start studying them one by one.

Go through their product portfolio. Look at the products they offer, how they position and price them. Record your findings in a worksheet so you can track and analyze the data you’re gathering. Visme allows you to do this quickly and easily.

You can also grab a template from Visme’s template gallery and create a product and pricing sketch for each competitor. This will make it easy for you to visualize individual competitors.

To determine competitors’ market share, use Statista or a similar resource to get your hands on the numbers.

Track and visualize your findings in this template.

Step 3: Perform a SWOT Analysis

A Strengths, Weaknesses, Opportunities and Threats (SWOT) analysis helps you study what competitors are doing to win customers. You can also use it to identify gaps in your market .

For example, let's say a competitor’s customer support team takes pretty long to get back to customers. You can use the information to provide faster customer support and a better experience for customers.

As you hunt for competitors’ strengths and weaknesses, study the following areas:

• Sales strategy
• Brand positioning
• Marketing plan
• Discounts strategy
• Website experience
• Customer support and experience

Running an ecommerce business? Study competitors’ shipping and product return strategies as well.

An effective way to jump-start studying competitors’ strengths, weaknesses and more is through social listening. The goal? To identify what customers are saying about brands on social media channels they use, including chat forums and groups they are a part of.

A similar approach is to study customer reviews. This will help you understand what your competitors’ customers are saying about them.

Are they satisfied with the product quality? Or are they put off by their onboarding process? Do their support requests take long to get answered?

As you go about researching, record your findings in a SWOT analysis template like this one:

If you’re a Visme user, you have the benefit of coordinating your SWOT research efforts with your team.

If you and your business partner are working together on the research work, you can both access and edit the worksheet in Visme at the same time.

To do this, use the Share option from the top right side of your project dashboard in Visme. Select "Share Privately" and add your partner to the project.

From there, you two can collaborate on design , leaving comments for each other.

Step 4: Dig Deeper Into Competitors’ Pricing Strategy

We’ve already mentioned that you need to make notes on how your competitors price their products. But studying their pricing strategy goes deeper.

First, review what discounts competitors offer. Then look at how often they offer discounts.

Studying your competitors’ promo strategies will help you understand how they’re attracting customers and growing sales. It will also give you a good idea of how much the target market is willing to pay and what their expectations are in terms of discounts.

In addition to the manual research to uncover individual competitor pricing, use the same research tools mentioned above — social listening and customer reviews. They'll help identify what customers are saying. Pay attention to how customers respond to the discounts and promotions that competitors run.

Some businesses tend to offer discounts shortly after they launch new products. This can be a turn-off for shoppers who like to shop for the latest collections to stand out from their peers.

Similarly, other businesses extend product deals now and then despite telling customers it’s their last chance to buy.

See if and how that annoys customers and if there’s an opportunity for you to offer something more relevant and unique to the target market.

Step 5: Analyze Competitors’ Marketing Strategy

It’s important to study how competitors are raising brand awareness and moving leads down their marketing funnel .

Begin by identifying where your leading competitors are funneling their resources. Is it PPC they’re investing in? Or are they taking the community-building approach to attract, engage and nurture customers?

Chances are your competitors are big on educating customers, so they’re investing in content marketing .

Also, look at which channels competitors are focusing on. Is it Twitter or Reddit? Or do they have a strong presence on Instagram ?

The answer to this will help you understand where your target audience is present and which marketing channels you should focus on.

Take Clearscope , an SEO content optimization tool, for example. They take an educational approach to their marketing by creating lots of webinar content.

Ahrefs , another SEO tool, on the other hand, is also big on the educational approach. But they create blog content, not webinars.

Step 6: Document Your Research

In this last step, compile all your research in written format.

Create an action plan that includes a tactical list of steps to take. This way, you can discuss and prioritize steps to take with your team. Aim to be concise as you create this competitor analysis document.

If you create a wordy report, nobody will read it. But if you create a document that summarizes your findings and visualizes data in the form of charts and graphs, more people will read and appreciate your hard work.

Want some good news? Visme makes it uber-simple to create easy-to-read graphs and charts . It can help you create an easily shareable and visually engaging analysis document.

Design graphs using templates like the one below:

Alternatively, create new charts in your presentation or report .

All you have to do is to head to Charts & Graphs on the left side of your design dashboard and choose the type of chart you want to create.

From there, Visme gives you a chart to enter data so it can create a custom graph for your project. You can resize the graph you create, tweak its color, animate it and add other interacgive effects.

When you are done designing your document you can easily share it with the rest of your team . Head to the Share button at the top right corner of your design dashboard.

Now select Share Privately from the left side and give permission to team members. Choose whether they can view your work, comment on it, or edit it.

If you prefer to get a link for the work you’ve created, simply grab it from the bottom of the page and share it with your team.

By going into Advanced Settings on the left side, followed by Privacy . You can also allow your team to download the competitor analysis report as a PDF.

And, finally, for the templates that we promised:

1. Retail Store Competitor Analysis Infographic Template

Use this infographic template to record your competitors’ pricing, unique selling proposition (USP), revenue and more.

Since the information is arranged in a table format, you can easily study how each competitor stands against another and how they compare to business.

2. Competitor Analysis Interactive Presentation Template

If you’re looking to pitch some growth ideas to your executive team, this interactive competitor analysis template is for you.

It’s neatly designed so that all information is easy to read.

There are a handful of slides in the template that use tables to compare competitors. You can also always add more slides or remove some to suit your needs.

3. Logistics Firm Competitor Analysis Infographic Template

This is the perfect template for studying and comparing two competitors.

If you prefer, you can also use the beautifully designed template to analyze your business against your leading competitor.

And if need be, you can add another row for comparing another competitor.

4. Edtech Company Competitor Analysis Infographic Template

This is another competitor analysis template to pitch two competitors against one another.

What makes it different from the template above is that it arranges all the comparative pointers at the center. This way, you won’t need to keep looking to the left side to see which pointer you’re studying.

5. Sales Consultant Competitor Analysis Worksheet Template

This is a great template to record findings on each competitor.

By using it, you can easily get a snapshot of each of your competitor’s free and paid products, USP, features, target market and the marketing channels they use.

6. Media and Marketing Agency Competitor Analysis Worksheet Template

This template is perfect for recording not just your competitors’ products, features and pricing but also their SWOT analysis.

Consequently, this competitor analysis template can serve as your readable database with all your research findings.

7. Nonprofit SWOT Analysis Infographic Template

If you’re looking to record your competitor’s strengths, weaknesses, opportunities and threats, then this template is perfect.

And if you’re conducting several competitors’ SWOT analyses, make sure you use this template for each one of them.

8. TrackFast Technologies Sales Battlecard Template

This competitor analysis template is useful for comparing your business with your leading competition.

As well as a comparative table, it also features space to record other essential details such as company overview, key differentiators, customer pain points and benefits.

9. Design Agency Competitor Analysis Worksheet Template

This one is a simple, minimally-designed competitor analysis template for comparing various competitors.

If you need to add another column, you can easily do so by editing the template in Visme.

10. Design Tool Competitor Analysis Infographic Template

Lastly, we’ve got this competitor analysis template.

Its best feature is that the template divides each column into sub-categories, which makes it easy to analyze each aspect.

For example, within the product column, you can easily learn about a competitor’s product features, pricing and USP.

So you see, competitor analysis is critical for tapping into and growing in a market.

But remember, analyzing your competitors and their moves is only part of the task. The other part involves documenting your findings in an easy-to-read and understandable way. This is key to making sure your team implements the findings from the research.

Want to start recording your findings? Sign up for Visme’s document creator for free today and start documenting actionable takeaways.

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About the Author

Masooma Memon is a pizza-loving freelance writer by day and a novel nerd by night. She crafts research-backed, actionable blog posts for SaaS and marketing brands who aim to employ quality content to educate and engage with their audience.

January 21, 2024

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Competitor Analysis 101: A Roadmap to Business Dominance With Competitive Analysis

Master Competitor Analysis: Strategies to Outperform Rivals - Unlock Opportunities for Business Growth! Explore our guide for strategic insights. Elevate your business strategy with effective competitor analysis. Start optimizing your success now.

What's Inside?

What is a Competitor Analysis?

Competitor analysis is a strategic business practice that involves systematically examining and evaluating the strengths, weaknesses, strategies, and performance of other businesses or organizations operating within the same industry or market

The primary goal is to gain comprehensive insights into the competitive landscape, understand how rivals operate, and identify opportunities or threats that can impact your own business strategy.

By analysing competitors, businesses can make informed decisions, refine their own strategies, and ultimately enhance their competitive advantage in the marketplace .

Why Competitive Analysis Is Important

By analysing competitors with competitive analysis on a regular basis, you can:

• Know your industry and market.
• Compare your performance to that of your opponents.
• Seek to fill any holes in your approach that your rivals may have
• Create plans and techniques that highlight your special selling point.
• Keep up with market changes to get a competitive advantage over your competitors.

Continue reading to learn how to get started.

Reasons to Use Competitor Analysis

Using competitor analysis is crucial for several reasons that can significantly impact the success and sustainability of a business:

1) Identifying Strengths and Weaknesses:

By analysing competitors, businesses can identify both their own strengths and weaknesses and those of their rivals.

Understanding where competitors excel and where they struggle provides valuable insights for strategic planning .

2) Opportunity and Threat Assessment:

Competitor analysis helps businesses identify opportunities in the market that their competitors may have overlooked.

It also enables businesses to recognize potential threats, allowing for proactive measures to mitigate risks.

3) Market Positioning: Market Competitor Analysis and Market Competitiveness Analysis

Understanding how competitors position themselves in the market allows businesses to differentiate their own offerings effectively.

It helps in creating a unique value proposition that can attract and retain customers.

4) Strategic Decision Making:

Competitor analysis informs strategic decision-making by providing data-driven insights.

Businesses and companies can adjust their strategies based on the observed successes and failures of competitors.

5) Customer Understanding:

Studying competitors aids in understanding customer preferences and expectations.

This knowledge is valuable for tailoring products, services, and marketing approaches to better meet customer needs.

6) Innovation and Adaptation:

Monitoring competitors' innovations and adaptations to market trends can inspire creative thinking within a business.

It helps organizations stay relevant and responsive to changes in the industry.

7) Benchmarking Performance:

Comparing key performance indicators with competitors allows businesses to benchmark their performance.

This benchmarking process helps set realistic goals and standards for improvement.

8) Risk Mitigation:

Identifying potential risks and challenges that competitors face enables businesses to proactively plan for similar situations.

This risk mitigation strategy enhances a company's resilience in a dynamic business environment.

9) Resource Allocation:

Competitor analysis aids in optimizing resource allocation by focusing on areas that offer the most significant impact.

Businesses can allocate budgets, manpower, and time more efficiently based on observed industry dynamics.

10) Continuous Improvement:

Regular competitor analysis promotes a culture of continuous improvement within a business.

It encourages adaptability and a commitment to staying ahead of industry changes and evolving customer demands.

What To Include In A Competitor Analysis

A competitor analysis is a crucial component of strategic planning for businesses.

It helps you understand the strengths and weaknesses of your competitors, identify opportunities and threats in the market, and make informed decisions to improve your own business performance.

Here are key elements to include in a comprehensive competitor analysis:

1) Identification of Competitors competitor research

• List and categorize direct and indirect competitors.
• Consider both current and potential future competitors.

2) Market Share and Size Assessing Competitors sales with competition research

• Determine the market share of each competitor.
• Evaluate the overall size and growth of the market metrics.

3) Products/Services Analysis

• Analyse the range of products or services offered by each competitor.
• Assess the quality levels , features, and pricing of their offerings.

4) Strengths and Weaknesses

• Identify the strengths and weaknesses of each competitor.
• Consider factors such as brand reputation, distribution channels, technology, and financial stability.

5) Target Audience

• Define the target audience for each competitor.
• Understand how competitors position themselves in the market.

6) Pricing Strategy

• Analyse the pricing strategies of competitors.
• Compare your pricing against theirs.

7) Marketing and Advertising

• Review competitors' marketing and advertising strategies. Assess the effectiveness of their campaigns in relation to competitor products

8) Distribution Channels

• Examine the distribution channels used by competitors.
• Evaluate the efficiency of their supply chain.

9) Online Presence

• Analyse competitors' online presence, including websites, social media, and online reviews and content.
• Evaluate their digital marketing strategies.

10) Customer Reviews and Feedback

• Research customer reviews and feedback on competitors' products or services.
• Identify common complaints and areas for improvement.

11) Regulatory Environment:

• Consider any regulatory factors affecting competitors.
• Assess how well they comply with industry regulations.

12) Technological Capabilities

• Evaluate the technological tools capabilities and innovations of competitors.
• Assess their investment in research and development.

13) Financial Performance

• Review the financial statements of competitors.
• Assess revenue, profit margins, and overall financial health.

14) SWOT Analysis:

• Summarize the key findings in a SWOT (Strengths, Weaknesses, Opportunities, Threats) analysis for each competitor case.

15) Future Plans and Trends:

• Research any publicly available information on competitors future plans and strategies.
• Stay informed about industry trends that may impact competitors.

16) Benchmarking:

• Benchmark your own performance against key competitors.
• Identify areas where you can improve or differentiate.

17) Risk Analysis:

• Assess risks associated with each competitor.
• Consider potential disruptions or challenges they may face.

Competitor Analysis

How to Create a Competitor Analysis: Step-by-Step Guide

1) Define Your Objectives:

Begin by clearly outlining the goals and objectives of your competitor analysis. Understanding what you aim to achieve will guide the entire process.

Whether it's identifying market opportunities, mitigating risks, or refining your market positioning, having well-defined objectives is crucial.

2) Identify Your Competitors:

Compile a comprehensive list of both direct and indirect competitors. Direct competitors operate in the same market and offer similar products or services, while indirect competitors may address the same needs but with different solutions.

Consider both current and potential future competitors for a thorough assessment.

3) Gather Information of Questions:

Collecting relevant data is a cornerstone of effective competitor analysis. Utilize various sources such as industry reports, financial statements, press releases, social media, and customer reviews.

The goal is to create a comprehensive overview of each competitor's strengths, weaknesses, opportunities, and threats.

4) SWOT Analysis:

Conduct a SWOT analysis for each competitor. This involves identifying their internal Strengths and Weaknesses, as well as external Opportunities and Threats.

Engage cross-functional teams to gather diverse perspectives, ensuring a well-rounded evaluation.

5) Market Share Analysis:

Determine the market share held by each competitor and how it has evolved over time. Analyze industry reports, market research data, and historical trends to understand the competitive dynamics within your market.

6. Financial Assessment:

Analyse competitors' financial statements to gain insights into their financial health. Focus on key financial metrics such as revenue, profit margins, and return on investment.

This step provides a deeper understanding of their stability and growth potential.

7) Product/Service Analysis:

Examine the products or services offered by each competitor. Evaluate their pricing strategies , unique selling points, and any innovations they bring to the market.

This analysis helps identify areas where your offerings can stand out.

8) Customer Base and Experience:

Identify the target audience and customer segments for each competitor. Analyse customer feedback, reviews, and overall satisfaction to understand the customer experience.

This information is invaluable for refining your own customer-centric strategies.

9) Marketing and Advertising Strategies:

Explore how competitors market their products or services. Analyse their advertising channels, messaging, branding, and overall marketing strategies.

Understanding their promotional tactics can provide insights into effective approaches within your industry.

10) Synthesize Findings and Strategic Implications:

Synthesize the gathered information into actionable insights. Identify strategic implications for your business based on the analysis .

This final step involves making informed decisions, refining your strategies, and adapting your business to the competitive landscape.

Types of Competitor Analysis

• Direct Competitor Analysis
• Indirect Competitor Analysis
• SWOT Analysis
• Benchmarking
• Product or Service Analysis
• Market Share Analysis
• Customer Analysis
• Price and Value Comparison
• Digital Competitor Analysis
• Brand Perception Analysis

Competitor Analysis Example

Here you can find a basic competitor analysis example, for further examples and information regarding competitor analysis and templates for analysing, check out our blog on: Competitor Analysis Templates.

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Frequently Asked Questions

1. what is in a competitor analysis.

Competitor analysis involves identifying competitors, assessing their market share, and analyzing products/services.

It also includes understanding strengths and weaknesses, evaluating pricing and marketing strategies, reviewing online presence and customer feedback, examining technological capabilities, and conducting financial analysis.

The goal is to gain insights that inform strategic decision-making and maintain a competitive edge.

2. How do you identify your competitors?

Identify competitors by researching businesses offering similar products or services in your industry, targeting the same customer base or solving similar problems.

Analyse market share, online search results, industry reports, and customer feedback to compile a comprehensive list.

3. What is a competitive market analysis?

A competitive market analysis assesses the strengths and weaknesses of businesses in a specific industry, focusing on factors like market share, pricing, products, and marketing strategies to inform strategic decisions.

4. What's a competitive analysis & how do you conduct one?

A competitive analysis assesses strengths and weaknesses of businesses in the same industry to inform strategic decisions. Conduct one by identifying competitors, evaluating market share, analysing products/pricing, and reviewing customer feedback.

5. What tools can I use to do competitor analysis?

Consider Decktopus for competitor analysis presentations. Its user-friendly features streamline the process, making it easy to create visually compelling insights.

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Porter’s Five Forces: Definition & How To Use The Model

Updated: Feb 12, 2024, 3:52am

Table of Contents

What are porter's five forces, example of porter's five forces, advantages of porter's five forces, disadvantages of porter's five forces, bottom line, frequently asked questions (faqs).

Porter’s Five Forces is a classic model that organizations use to assess their competitive environment and make informed decisions. The framework, developed by renowned Harvard Business School professor Michael E. Porter, lets companies evaluate the environmental forces shaping the future of their industry.

In this article, we’ll explain how you can use Porter’s Five Forces to analyze your competitive landscape, identify opportunities and solidify your position in the market.

Michael E. Porter’s Five Forces framework is one of the most widely regarded business strategy tools. Born out of his work in 1979, this framework offers organizations a systematic approach to assessing their competitive environment and making strategic decisions that can influence their long-term success.

The five forces include the factors that influence every industry. The five critical dimensions which shape the competitive business landscape are:

Competitive Rivalry

Supplier power, buyer power, threat of substitution, threat of new entrants.

Competitive Rivalry evaluates the number of existing players and how established they are in the industry. How many competitors do you have? Are their products better than your own?

In industries with cutthroat competition, companies often lower prices and invest in expensive marketing campaigns to increase market share. That means suppliers and buyers can quickly move towards your competitors. Conversely, businesses in less competitive sectors enjoy more comfortable profit margins.

For example, the airline industry has intense competition. Major players such as American Airlines, Delta Air Lines and United Airlines often differentiate themselves by reducing costs, improving customer experience and launching new routes to attract passengers.

Suppliers provide the essential ingredients for a business’s operations. How much influence does a supplier wield over a company’s profits?

When only a few suppliers can provide a product, they can dictate terms and pressure businesses to accept higher prices. Even if terms are unfavorable, some get pressured to take them because of the costs of moving to another supplier.

In an ideal scenario, companies must be able to diversify their supplier base. By reducing their dependency on a supplier, businesses can safeguard their supply chains, control costs and maintain a competitive edge.

For example, the automotive industry has many suppliers for engines, electronics and tires. However, a relatively small number of companies supply critical components such as semiconductor chips, which grants them substantial power.

Buyer Power refers to the influence customers wield over a business. If an industry has strong buyer power, consumers can demand lower prices, higher quality or improved service, affecting a company’s profitability.

Buyers wield more power in a market with fewer customers and more sellers. In this scenario, businesses can differentiate themselves by formulating unique value propositions to justify their higher prices. Some examples include loyalty programs, excellent customer service and novel experiences.

The electronics industry provides a compelling example of buyer power within Porter’s Five Forces framework. Consumers can access various electronic products, from smartphones and laptops to smartwatches and home entertainment systems. Price comparisons are easily accessible online, so finding the best deals and discounts is easy.

For example, companies such as Apple let consumers customize their devices with various features, colors and accessories. They consistently upgrade their products with new features because it’s easy to transition to alternative brands or products.

The Threat of Substitution refers to the likelihood that customers might switch to a different product or service. When substitution threats are high, businesses are vulnerable to sudden shifts in consumer preferences.

One notable example of the threat of substitution occurs in the beverage industry. Consumers can choose from many beverages including carbonated soft drinks, bottled water, juices, energy drinks, coffee, tea and alcoholic beverages. That’s why beverage companies must explore niche markets, introduce limited-edition flavors and change their packaging to differentiate themselves.

How easy is it for new competitors to enter the market and threaten existing players? Threat of New Entrants involves evaluating the barriers to entry in an industry.

High barriers such as high starting capital costs and a small pool of suppliers can deter new rivals from early success. For example, an established company with significant resources can lower prices to maintain a competitive edge over new entrants. However, new competitors can easily weaken your business’s position and quickly disrupt the status quo.

Let’s put Porter’s Five Forces into action through a real-world example—the retail industry. Understanding the five forces in this competitive sector can spell the difference between success and stagnation.

In the retail world, competition is intense. Businesses of all sizes demand consumers’ attention, often resulting in price wars and thin profit margins. Dominant companies in this sector—including Walmart and Amazon—use various strategies to outshine their rivals. They often lower prices, optimize their supply chain and expand their product offerings, which makes it difficult for small businesses to compete with them.

Finding reliable suppliers and securing favorable terms is vital to success. Large retailers such as Costco have immense buying power, so they can negotiate advantageous deals with suppliers and acquire quality products. Most companies choose suppliers based on strict criteria such as cost-effectiveness, quality and reliability.

Customers in the retail industry are discerning and price-sensitive, which leads to significant buyer power. Brands that excel in customer service and providing exceptional experiences, such as Nordstrom, can command premium prices and build brand loyalty.

The retail industry faces an ongoing threat from e-commerce and online marketplaces. Companies such as eBay and Etsy provide alternative options for quality and affordable products, so traditional retailers must continually innovate to remain relevant.

It’s easy to set up an online store, which means there’s a lower barrier to entry in the retail sector. Platforms such as Shopify allow new small businesses to attract customers and establish themselves quickly. However, the cost of competing with established giants in terms of marketing and logistics makes it difficult to dominate the market.

Porter’s Five Forces is an indispensable resource for businesses seeking sustainable growth and competitive advantage. Here are some of its key benefits:

• Holistic Analysis: Porter’s Five Forces provides a comprehensive overview of the competitive landscape. As a result, organizations can allocate their resources and make decisions based on multiple factors existing in the environment.
• Strategic Insight: The model lets businesses think critically about their position in their industry and their existing competitors. That way, they can make informed decisions.
• Risk Mitigation: By identifying potential threats, companies can address challenges ahead of time. For example, it offers a unique value proposition to remain relevant for consumers.
• Opportunity Identification: Recognizing industry gaps and unmet needs can help businesses differentiate themselves or develop innovative solutions.
• Long-Term Sustainability: When strategies consider Porter’s Five Forces, they are more likely to withstand market fluctuations.

Porter’s Five Forces is a robust framework but comes with limitations. Here are some of its disadvantages:

• Oversimplification: The model oversimplifies complex market dynamics and fails to evaluate “why” some observations occur. As a result, it can be easy to miss subtle nuances.
• Inaccurate Strategic Analysis: The framework needs to account for the dynamic nature of industries and markets. They may evaluate their competition on broad or narrow terms while failing to consider shifting boundaries.
• Backward-Looking: Porter’s Five Forces provides an overview of an industry based on the past, which makes it ideal for short-term analysis. However, factors including globalization and rapid technological advancements can make its analysis inaccurate.
• Need To Understand the Purpose of Porter’s Five Forces Framework: Porter’s Five Forces can help you analyze an industry to create a business strategy. It is not used to analyze an individual company or determine whether an industry is attractive.

Porter’s Five Forces provides a timeless framework for organizations that want to evaluate their competitive environment, identify opportunities and fortify their positions against threats. By understanding the different forces, businesses can make informed decisions and adapt to evolving markets.

Are Porter's Five Forces still relevant?

Yes, Porter’s Five Forces remain relevant in today’s business landscape. The core concepts of competition, supplier power, buyer power, substitution threats and new entrants continue to shape businesses’ future.

What is the primary purpose of Porter's Five Forces model?

Porter’s Five Forces model mainly aims to help organizations assess their competitive environment. It provides a structured framework for understanding the forces that impact a company’s profitability and long-term sustainability so businesses can make strategic decisions.

What's the difference between Porter's Five Forces and SWOT analysis?

Porter’s Five Forces primarily focuses on external factors that affect a business’s competitiveness. In contrast, SWOT analysis examines internal and external factors, such as a company’s strengths, weaknesses, opportunities and threats, to provide a broader perspective on strategic planning.

Is competitive advantage still relevant?

Having a competitive advantage is crucial in today’s business landscape. Businesses can harness their competitive advantage by offering unique value to customers, reducing costs or differentiating themselves in the market.

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B2B Marketing In 2024: The Ultimate Guide

Monique Danao is a highly experienced journalist, editor, and copywriter with an extensive background in B2B SaaS technology. Her work has been published in Forbes Advisor, Decential, Canva, 99Designs, Social Media Today and the South China Morning Post. She has also pursued a Master of Design Research at York University in Toronto, Canada.

A step-by-step guide to competitor analysis

Updated 12 January 2024 • 7 min read

Be one step ahead with thorough competitor analysis — see where others are doing well, where they’re falling short, and identify opportunities for your business. Let’s jump in.

What is competitor analysis?

Competitor analysis is a crucial part of any business’ marketing strategy. 

It involves identifying potential competitors, then studying, researching and comparing their strategies to your own. You can conduct a broad-scale analysis or focus on a single area of your competitor’s operations. 

Whichever approach you take, a competitor analysis can help you understand the competitive landscape while providing the insights you need to create a successful marketing strategy. 

Why you should analyse your competitors

Understand the market and what customers want.

Competitor analysis helps you discover your business’ challenges and opportunities. 

It allows you to be strategic in anticipating changes and reacting to new market trends or customer needs. Studying your competitors’ marketing strategy tells you about the customers they’re targeting, which channels they consider most important and how they differentiate themselves. 

Comparing how different businesses operate allows you to build an overall picture of the marketplace. Monitoring trends and opportunities while identifying the customers other businesses are targeting helps you understand what your potential customers might look for.

Identify areas for improvement

Understanding your competitors’ strategies helps you to identify the strengths and weaknesses of different approaches, including your own. 

Businesses within a sector may have different approaches to the same problem — and not all may be suitable for you. However, analysing the approaches other businesses are using could help you find opportunities for growth.

For example, suppose your analysis shows that a competitor heavily invests in paid search advertising when you’re focusing on organic search. In that case, you might decide to reallocate some budget to paid search.

You might also identify that a competitor’s engagement on social media is higher than yours, prompting you to rethink your approach to social media content.

Develop competitive strategies to boost sales

Understanding your competitors’ strategies doesn’t just allow you to identify weaknesses within your operations — it also helps you compete with them directly. 

For example, your website competitor analysis might have identified that a competitor is targeting a specific type of customer, and you’ve found your own “lookalike” customers online. In that case, you might target the lookalike audience, boosting your sales by being present for search terms where others are absent. 

To consider another scenario, if a competitor has recently launched a new product, you can observe their strategies. Were these successful? What would you do differently when launching a similar product? You can then use that analysis to develop your product launch strategies.

Stay up-to-date with industry trends

Keeping tabs on your competitors also means staying abreast of industry trends. For example, if a few of your competitors focus on a specific market segment, platform or channel, that tells you something is going on that you should probably be aware of.

You can see the overall market direction by tracking changes in your competitors’ strategies. You might look at how their priorities change year-to-year or quarter-to-quarter and how they respond to changing market conditions. 

Learn from other business’ mistakes

Remember, just because a competitor uses a specific strategy, it doesn’t mean it’s a good idea.

You can watch out for errors and poor decisions among your competitors and learn from them. Once you’ve identified the mistake, whether it’s a poorly written LinkedIn post or flawed product launch, you can make sure you don’t make the same mistakes. 

How to conduct a competitor analysis

1. identify your primary competitors.

You’ll likely have some idea who your competitors are, but businesses regularly launch new products and services, so the landscape is continuously changing.

Businesses usually optimise their content for search engines and use paid advertising to get in front of new audiences. Act as if you’re a customer searching for products or services, and you’ll likely see information and adverts from businesses offering those services. This allows you to identify competitors and see what type of content they’re producing.

You can also ask existing customers whether they had anyone else on their shortlist before purchasing from you. Once you identify your primary competitors, you can gather information about them.

2. Monitor their social media presence

Social media accounts allow businesses to react and proactively reach out to their audiences. By watching your competitors’ social media, you can identify more aspects of their marketing strategy, such as tone of voice, key messaging themes and how they engage with other businesses. 

3. Assess their SEO strategy 

SEO is a key aspect of digital marketing. A basic evaluation of SEO strategy is to look at the keywords your competitors’ websites rank highly for. Do you also want to rank highly for the same terms, or should you target different, less competitive keywords? 

4. Purchase their products or services to understand the customer experience

Explore the customer experience by purchasing from your competitors. Are there any flaws in their checkout process? Are the product descriptions detailed? Look for any shortcomings that present an opportunity for you to improve your own processes. 

Competitor analysis templates 

Once you’ve started gathering information about your competitors, it’s important to capture it in the most helpful way possible. You can use a competitor analysis template to help you easily start your analysis today. 

Determining your competitive advantage

Once you've profiled your competitors’ strategies, use this information to determine and develop your competitive advantage . 

For example, you might adapt successful aspects of competitors’ strategies for your business plan or identify potential challenges or hazards you need to be aware of.

Customer support

Understanding the customer journey and how customers interact with your competitors allows you to provide exceptional customer support.

If your competitors have a different approach to customer service, consider how you can use this to your advantage. For example, some businesses may offer real-time chat support, while others don’t offer any support on the weekends. 

By evaluating your pricing process and the range of price points other businesses use, you can ensure you price your products and services competitively while maximising profit. 

For example, some competitors position themselves as the most affordable in the market to serve a subset of price-conscious customers. You can identify this positioning through the competitors' messaging, pricing and customer targeting.

If you’re looking to target the same customers, you can use this insight to revise your approach to pricing.  

Products and services

Just because you’re competing with another business doesn’t mean you’re offering the same thing to the market. 

For example, a large competitor may offer a wide range of products while you’re only competing with a specific segment. Or a service provider may compete with one of your services but not others.

By learning what products or services your competitors offer, you can identify areas of high and low competition. This allows you to adapt your offering to take advantage of under-serviced areas of the market while avoiding oversaturated ones. 

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Disclaimer:  Information provided in this article is of a general nature and does not consider your personal situation. It does not constitute legal, financial, or other professional advice and should not be relied upon as a statement of law, policy or advice. You should consider whether this information is appropriate to your needs and, if necessary, seek independent advice. This information is only accurate at the time of publication. Although every effort has been made to verify the accuracy of the information contained on this webpage, MYOB disclaims, to the extent permitted by law, all liability for the information contained on this webpage or any loss or damage suffered by any person directly or indirectly through relying on this information.

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12 Key Elements of a Business Plan (Top Components Explained)

Starting and running a successful business requires proper planning and execution of effective business tactics and strategies .

You need to prepare many essential business documents when starting a business for maximum success; the business plan is one such document.

When creating a business, you want to achieve business objectives and financial goals like productivity, profitability, and business growth. You need an effective business plan to help you get to your desired business destination.

Even if you are already running a business, the proper understanding and review of the key elements of a business plan help you navigate potential crises and obstacles.

This article will teach you why the business document is at the core of any successful business and its key elements you can not avoid.

Let’s get started.

Why Are Business Plans Important?

Business plans are practical steps or guidelines that usually outline what companies need to do to reach their goals. They are essential documents for any business wanting to grow and thrive in a highly-competitive business environment .

1. Proves Your Business Viability

A business plan gives companies an idea of how viable they are and what actions they need to take to grow and reach their financial targets. With a well-written and clearly defined business plan, your business is better positioned to meet its goals.

2. Guides You Throughout the Business Cycle

A business plan is not just important at the start of a business. As a business owner, you must draw up a business plan to remain relevant throughout the business cycle .

During the starting phase of your business, a business plan helps bring your ideas into reality. A solid business plan can secure funding from lenders and investors.

After successfully setting up your business, the next phase is management. Your business plan still has a role to play in this phase, as it assists in communicating your business vision to employees and external partners.

Essentially, your business plan needs to be flexible enough to adapt to changes in the needs of your business.

3. Helps You Make Better Business Decisions

As a business owner, you are involved in an endless decision-making cycle. Your business plan helps you find answers to your most crucial business decisions.

A robust business plan helps you settle your major business components before you launch your product, such as your marketing and sales strategy and competitive advantage.

4. Eliminates Big Mistakes

Many small businesses fail within their first five years for several reasons: lack of financing, stiff competition, low market need, inadequate teams, and inefficient pricing strategy.

Creating an effective plan helps you eliminate these big mistakes that lead to businesses' decline. Every business plan element is crucial for helping you avoid potential mistakes before they happen.

5. Secures Financing and Attracts Top Talents

Having an effective plan increases your chances of securing business loans. One of the essential requirements many lenders ask for to grant your loan request is your business plan.

A business plan helps investors feel confident that your business can attract a significant return on investments ( ROI ).

You can attract and retain top-quality talents with a clear business plan. It inspires your employees and keeps them aligned to achieve your strategic business goals.

Key Elements of Business Plan

Starting and running a successful business requires well-laid actions and supporting documents that better position a company to achieve its business goals and maximize success.

A business plan is a written document with relevant information detailing business objectives and how it intends to achieve its goals.

With an effective business plan, investors, lenders, and potential partners understand your organizational structure and goals, usually around profitability, productivity, and growth.

Every successful business plan is made up of key components that help solidify the efficacy of the business plan in delivering on what it was created to do.

Here are some of the components of an effective business plan.

1. Executive Summary

One of the key elements of a business plan is the executive summary. Write the executive summary as part of the concluding topics in the business plan. Creating an executive summary with all the facts and information available is easier.

In the overall business plan document, the executive summary should be at the forefront of the business plan. It helps set the tone for readers on what to expect from the business plan.

A well-written executive summary includes all vital information about the organization's operations, making it easy for a reader to understand.

The key points that need to be acted upon are highlighted in the executive summary. They should be well spelled out to make decisions easy for the management team.

A good and compelling executive summary points out a company's mission statement and a brief description of its products and services.

An executive summary summarizes a business's expected value proposition to distinct customer segments. It highlights the other key elements to be discussed during the rest of the business plan.

Including your prior experiences as an entrepreneur is a good idea in drawing up an executive summary for your business. A brief but detailed explanation of why you decided to start the business in the first place is essential.

Adding your company's mission statement in your executive summary cannot be overemphasized. It creates a culture that defines how employees and all individuals associated with your company abide when carrying out its related processes and operations.

Your executive summary should be brief and detailed to catch readers' attention and encourage them to learn more about your company.

Components of an Executive Summary

Here are some of the information that makes up an executive summary:

• The name and location of your company
• Products and services offered by your company
• Mission and vision statements
• Success factors of your business plan

2. Business Description

Your business description needs to be exciting and captivating as it is the formal introduction a reader gets about your company.

What your company aims to provide, its products and services, goals and objectives, target audience , and potential customers it plans to serve need to be highlighted in your business description.

A company description helps point out notable qualities that make your company stand out from other businesses in the industry. It details its unique strengths and the competitive advantages that give it an edge to succeed over its direct and indirect competitors.

Spell out how your business aims to deliver on the particular needs and wants of identified customers in your company description, as well as the particular industry and target market of the particular focus of the company.

Include trends and significant competitors within your particular industry in your company description. Your business description should contain what sets your company apart from other businesses and provides it with the needed competitive advantage.

In essence, if there is any area in your business plan where you need to brag about your business, your company description provides that unique opportunity as readers look to get a high-level overview.

Components of a Business Description

Your business description needs to contain these categories of information.

• Business location
• The legal structure of your business
• Summary of your business’s short and long-term goals

3. Market Analysis

The market analysis section should be solely based on analytical research as it details trends particular to the market you want to penetrate.

Graphs, spreadsheets, and histograms are handy data and statistical tools you need to utilize in your market analysis. They make it easy to understand the relationship between your current ideas and the future goals you have for the business.

All details about the target customers you plan to sell products or services should be in the market analysis section. It helps readers with a helpful overview of the market.

In your market analysis, you provide the needed data and statistics about industry and market share, the identified strengths in your company description, and compare them against other businesses in the same industry.

The market analysis section aims to define your target audience and estimate how your product or service would fare with these identified audiences.

Market analysis helps visualize a target market by researching and identifying the primary target audience of your company and detailing steps and plans based on your audience location.

Obtaining this information through market research is essential as it helps shape how your business achieves its short-term and long-term goals.

Market Analysis Factors

Here are some of the factors to be included in your market analysis.

• The geographical location of your target market
• Needs of your target market and how your products and services can meet those needs
• Demographics of your target audience

Components of the Market Analysis Section

Here is some of the information to be included in your market analysis.

• Industry description and statistics
• Demographics and profile of target customers
• Marketing data for your products and services
• Detailed evaluation of your competitors

4. Marketing Plan

A marketing plan defines how your business aims to reach its target customers, generate sales leads, and, ultimately, make sales.

Promotion is at the center of any successful marketing plan. It is a series of steps to pitch a product or service to a larger audience to generate engagement. Note that the marketing strategy for a business should not be stagnant and must evolve depending on its outcome.

Include the budgetary requirement for successfully implementing your marketing plan in this section to make it easy for readers to measure your marketing plan's impact in terms of numbers.

The information to include in your marketing plan includes marketing and promotion strategies, pricing plans and strategies , and sales proposals. You need to include how you intend to get customers to return and make repeat purchases in your business plan.

5. Sales Strategy

Sales strategy defines how you intend to get your product or service to your target customers and works hand in hand with your business marketing strategy.

Your sales strategy approach should not be complex. Break it down into simple and understandable steps to promote your product or service to target customers.

Apart from the steps to promote your product or service, define the budget you need to implement your sales strategies and the number of sales reps needed to help the business assist in direct sales.

Your sales strategy should be specific on what you need and how you intend to deliver on your sales targets, where numbers are reflected to make it easier for readers to understand and relate better.

6. Competitive Analysis

Providing transparent and honest information, even with direct and indirect competitors, defines a good business plan. Provide the reader with a clear picture of your rank against major competitors.

Identifying your competitors' weaknesses and strengths is useful in drawing up a market analysis. It is one information investors look out for when assessing business plans.

The competitive analysis section clearly defines the notable differences between your company and your competitors as measured against their strengths and weaknesses.

This section should define the following:

• Your competitors' identified advantages in the market
• How do you plan to set up your company to challenge your competitors’ advantage and gain grounds from them?
• The standout qualities that distinguish you from other companies
• Potential bottlenecks you have identified that have plagued competitors in the same industry and how you intend to overcome these bottlenecks

In your business plan, you need to prove your industry knowledge to anyone who reads your business plan. The competitive analysis section is designed for that purpose.

7. Management and Organization

Management and organization are key components of a business plan. They define its structure and how it is positioned to run.

Whether you intend to run a sole proprietorship, general or limited partnership, or corporation, the legal structure of your business needs to be clearly defined in your business plan.

Use an organizational chart that illustrates the hierarchy of operations of your company and spells out separate departments and their roles and functions in this business plan section.

The management and organization section includes profiles of advisors, board of directors, and executive team members and their roles and responsibilities in guaranteeing the company's success.

Apparent factors that influence your company's corporate culture, such as human resources requirements and legal structure, should be well defined in the management and organization section.

Defining the business's chain of command if you are not a sole proprietor is necessary. It leaves room for little or no confusion about who is in charge or responsible during business operations.

This section provides relevant information on how the management team intends to help employees maximize their strengths and address their identified weaknesses to help all quarters improve for the business's success.

8. Products and Services

This business plan section describes what a company has to offer regarding products and services to the maximum benefit and satisfaction of its target market.

Boldly spell out pending patents or copyright products and intellectual property in this section alongside costs, expected sales revenue, research and development, and competitors' advantage as an overview.

At this stage of your business plan, the reader needs to know what your business plans to produce and sell and the benefits these products offer in meeting customers' needs.

The supply network of your business product, production costs, and how you intend to sell the products are crucial components of the products and services section.

Investors are always keen on this information to help them reach a balanced assessment of if investing in your business is risky or offer benefits to them.

You need to create a link in this section on how your products or services are designed to meet the market's needs and how you intend to keep those customers and carve out a market share for your company.

Repeat purchases are the backing that a successful business relies on and measure how much customers are into what your company is offering.

This section is more like an expansion of the executive summary section. You need to analyze each product or service under the business.

9. Operating Plan

An operations plan describes how you plan to carry out your business operations and processes.

The operating plan for your business should include:

• Information about how your company plans to carry out its operations.
• The base location from which your company intends to operate.
• The number of employees to be utilized and other information about your company's operations.
• Key business processes.

This section should highlight how your organization is set up to run. You can also introduce your company's management team in this section, alongside their skills, roles, and responsibilities in the company.

The best way to introduce the company team is by drawing up an organizational chart that effectively maps out an organization's rank and chain of command.

What should be spelled out to readers when they come across this business plan section is how the business plans to operate day-in and day-out successfully.

10. Financial Projections and Assumptions

Bringing your great business ideas into reality is why business plans are important. They help create a sustainable and viable business.

The financial section of your business plan offers significant value. A business uses a financial plan to solve all its financial concerns, which usually involves startup costs, labor expenses, financial projections, and funding and investor pitches.

All key assumptions about the business finances need to be listed alongside the business financial projection, and changes to be made on the assumptions side until it balances with the projection for the business.

The financial plan should also include how the business plans to generate income and the capital expenditure budgets that tend to eat into the budget to arrive at an accurate cash flow projection for the business.

Base your financial goals and expectations on extensive market research backed with relevant financial statements for the relevant period.

Examples of financial statements you can include in the financial projections and assumptions section of your business plan include:

• Projected income statements
• Cash flow statements
• Balance sheets
• Income statements

Revealing the financial goals and potentials of the business is what the financial projection and assumption section of your business plan is all about. It needs to be purely based on facts that can be measurable and attainable.

11. Request For Funding

The request for funding section focuses on the amount of money needed to set up your business and underlying plans for raising the money required. This section includes plans for utilizing the funds for your business's operational and manufacturing processes.

When seeking funding, a reasonable timeline is required alongside it. If the need arises for additional funding to complete other business-related projects, you are not left scampering and desperate for funds.

If you do not have the funds to start up your business, then you should devote a whole section of your business plan to explaining the amount of money you need and how you plan to utilize every penny of the funds. You need to explain it in detail for a future funding request.

When an investor picks up your business plan to analyze it, with all your plans for the funds well spelled out, they are motivated to invest as they have gotten a backing guarantee from your funding request section.

Include timelines and plans for how you intend to repay the loans received in your funding request section. This addition keeps investors assured that they could recoup their investment in the business.

12. Exhibits and Appendices

Exhibits and appendices comprise the final section of your business plan and contain all supporting documents for other sections of the business plan.

Some of the documents that comprise the exhibits and appendices section includes:

• Legal documents
• Licenses and permits
• Credit histories
• Customer lists

The choice of what additional document to include in your business plan to support your statements depends mainly on the intended audience of your business plan. Hence, it is better to play it safe and not leave anything out when drawing up the appendix and exhibit section.

Supporting documentation is particularly helpful when you need funding or support for your business. This section provides investors with a clearer understanding of the research that backs the claims made in your business plan.

There are key points to include in the appendix and exhibits section of your business plan.

• The management team and other stakeholders resume
• Marketing research
• Permits and relevant legal documents
• Financial documents

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Competitive analysis: What is it and how to do it

June 24, 2024 | 7 minute read

No matter what kind of business you run, your customers may consider many options for buying what you sell—whether it's from similar businesses in your area or a distant, online competitor. Consider that an exciting challenge: Knowing the playing field can help you stay ahead of competitors and position yourself to stand out from the crowd—and that's where doing a competitive analysis proves valuable. 

What is a competitive analysis?

A competitive analysis is a process to help you understand who your most important competitors are, what products and services they sell, and their sales and marketing strategies. It can allow you to see how your business compares to similar ones and make more informed decisions about how to stand out. It's easy to get carried away with enthusiasm for your business ideas, but customers have to be excited about your brand, products or services, too, or they won't be willing to buy.

"Many small business founders forget about how they are going to be distinct. How are they different from their competition?" says Dave McLurg, Co-founder and Chairman of the venture capital firm Griffin Phoenix Capital in Scottsdale, Arizona. "A competitive analysis will help you find out who your competitors in the marketplace are and what they do—and then take a look at the key elements of how you differentiate yourself."

How can a competitive analysis help you?

A competitive analysis can give insight into the competitive landscape where you operate your business. It will help you identify:

• Common practices in your industry . Knowing how competitors handle factors such as post-sale interactions, like returned purchases, and how quickly they serve customers, may point you to opportunities to stand out by offering better options. Be sure to look into the reasons certain practices may be sub-par. For instance, if customer service is poor in your industry, is it because of a lack of training, which is fixable, or the labor shortage, which could be harder for you to resolve?
• Trends that may affect your industry in the future. For example, if your competitors are moving the process of returning purchases online, you'll want to consider that in your plans.
• Gaps in the marketplace. If no one is addressing certain needs among your customers, you may be able to provide a solution. "You've got to determine if it's possible in the marketplace," says McLurg. If an existing challenge will be too costly to tackle, you may need to look for other gaps to address so you can stand out.
• Whether your hunches are correct. "A lot of business owners make assumptions that their product is one the marketplace wants, and people will pay a certain price for the product, and you want to validate those assumptions as fast as you can," says McLurg. "Many businesses fail because they don't do that homework."

What should be included in a competitive analysis?

There's no one way to do a competitive analysis. Generally, you'll want to research and determine:

• Who your top five to seven competitors are
• What they sell: Take stock of your rivals' competing products and services, the features of their offerings, how these solve customers' problems, and the target audience.
• How they market it: Determine where they are marketing their offerings, their advertising strategies and their most important marketing channels.
• What their pricing and shipping policies are: How do their prices stack up against other rivals? Have they positioned themselves at the high end, the low end or somewhere in between?
• How they use social media: Check out the platforms they are on, their posts and their engagement. Make sure you consider their blogging strategy, ebooks and white papers, videos, podcasts and other formats they use.
• Plus, any other factors that help you determine their strengths and weaknesses: Look into awards and distinctions they've won and check out comments their customers made for insights to where they stand out and where there are opportunities for you to offer better alternatives.

Let's take a deeper dive:

Competitors

You'll want to identify the major players in your industry who run both brick-and-mortar businesses in your geographic area and online rivals targeting the same customers. Make sure they are very similar for the best insights. If, for instance, you sell gourmet sandwiches to customers who value quality above all, analyze what other high-end sandwich shops are doing—and skip the fast-food chains where speed, convenience and price are paramount. Gather details such as their market share, date founded, number of employees and number of customers if you can find it.

Competing products and services

Take stock of what offerings your rivals are selling, and which ones are most popular. You can do your research through on-the-ground methods, like purchasing from them, or through online research, which may point you to items that are "going fast" or have many positive reviews.

• "What's key when you're doing a competitive analysis is to look through the lens of your target customer to determine what key factors they care about," Dave McLurg, Co-founder and Chairman of the venture capital firm Griffin Phoenix Capital

Marketing and sales channels

There are many ways competitors may spread the word about what they sell. These may include traditional advertising and marketing methods such as print advertising, billboards, and local TV commercials; a public relations campaign featuring them in local media; content marketing through a blog on their website or email newsletter; or paid online marketing through search engines or a platform such as Amazon, where you'll gain insights about rival brands through online reviews. Taking stock of the methods used will likely spark some creative ideas for your own business.

Social media

Chances are some of your competitors use social media marketing, whether its YouTube, Instagram, TikTok, or other platforms. They may use organic, free postings and paid promotions. By searching for their brands on popular channels, you'll get an idea of where you need to show up and catch customers' attention.

Be sure to look at social media comments about their brands and "likes." This may point you to untapped opportunities to excel and differentiate yourself. For instance, even if your rivals are doing a great job of marketing themselves on social media, they may receive a lot of online complaints about the timeliness of their deliveries. That could mean you stand out simply by delivering your orders on time.

Other factors

If your competitors receive third-party validation for the work they do—such as awards for outstanding customer service or innovation—this gives you an idea of the standards you need to meet to compete with them. Also look for certifications they have received for meeting environmental standards, running an equitable workplace, or other factors that customers may value. Usually, you can find these accolades on their websites or in their press releases online.

How to organize a competitive analysis

To make sure your competitive analysis is thorough and organized, use a spreadsheet to compile your findings.

• In a basic competitive analysis, list all your competitors who offer a similar product by brand name down the left margin, and then, across the top, list areas of comparison—such as product features, quality, pricing, ease of use, marketing strategies and customer service.
• Make notes on the sheet to compare how rivals handle each of these key areas. For instance, under marketing, you might note "email and website" for one competitor and "YouTube" for another.

Once you're done, you can use your findings to identify gaps to address and come up with a unique strategy for establishing or growing your business.

When should you do a competitive analysis?

A competitive analysis can come in handy if you start a new business and are looking for a unique niche or are looking to stay on top of trends that may influence an existing business's future growth.

It can also be helpful if your sales have suddenly slowed, and you're not sure why. By studying what both successful and unsuccessful competitors do, you may be able to find areas of improvement for your business.

A competitive analysis can also help if you're concerned about staying ahead of trends, such as artificial intelligence, that could either help your business grow or make your business less relevant in the future—while you still have time to do something about it.

Use a competitive analysis to position your business for the future

There's no one-size-fits-all way to create a competitive analysis, but by understanding the market for what you sell—and potentially where you could stand out—you can avoid a dead end and potentially find niches to better position your business for growth.

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