7 Steps to Analyze Competitors and Succeed in Business

To succeed in business, analyzing competitors is one of the important steps a business cannot skip. It helps a business understand the market better and judge its competitiveness against rivals, and from there make marketing strategy and run the business effectively. So what is a competitor? How should competitor analysis be done? Let's Mona Media find out in the article below.

What is a competitor?

Competitors are businesses or organizations that operate in the same industry or offer products and services equal or similar to yours. They share the same business purpose and can compete directly or indirectly for customers and sales growth.

Competitive pressure from rivals pushes a business to improve its products and services, optimize costs and strengthen its marketing strategy to gain a competitive advantage.

Example of competitors

Coca-Cola and Pepsi are a classic example of business competition. These two giants dominate the market, compete with each other and leave almost no room for other brands to enter. Both make a soda-flavored product at similar prices, which makes it hard for customers to choose between them.

• Market position

Coca-Cola is the leading beverage brand worldwide. With Coca-Cola Classic as its core product, it has built a diverse product ecosystem of many drinks such as Diet Coke, Sprite, Fanta and fruit juice products.

Pepsi has also developed other product lines such as Diet Pepsi, Mountain Dew, 7Up and Mirinda. Pepsi competes strongly with Coca-Cola and works to expand its market share with creative products and marketing campaigns.

• Marketing and advertising strategy

Coca-Cola has one of the most successful marketing and advertising strategies in its industry. It focuses on building a positive image and connecting with customers through creative ad campaigns, major sports and cultural events, and social campaigns.

Pepsi, meanwhile, has a similar marketing strategy but aims at a young, energetic and creative group of customers. It focuses on building a "cool" image and uses distinctive, creative ad campaigns to catch customers' attention.

Why you need to analyze competitors

Good competitor analysis helps a business understand its rivals and itself better. We see what competitors do well so your business can learn from it, and we see their limits so you can do better and adjust your tactics to fit your business and customers. Competitor analysis also helps you spot business opportunities in the market and the industry.

See also: How to identify your business's competitive advantage

Benefits of competitor analysis

Competitor analysis brings a business several important benefits, including:

• Understand the market better: Competitor analysis helps a business understand the market, industry trends and how competitors compete with each other.
• Identify strengths and weaknesses: Analysis gives a business an overall view of competitors' strengths and weaknesses, which guides how it develops its own business plan.
• Improve competitiveness: Competitor analysis helps a business improve its competitiveness, build suitable growth strategies, raise product and service quality, improve its pricing policy and strengthen its reach to customers.
• Optimize your marketing strategy: By analyzing competitors, a business can refine its marketing strategy and choose advertising, promotions and PR campaigns that fit, reach more customers, build brand awareness and create a competitive edge.
• Make accurate investment decisions: A business can judge the market accurately and make sound investment decisions from there, which lowers investment risk and improves business results.

Steps to analyze competitors in business

Step 1: List your competitors

To identify which competitors are relevant enough to analyze, start with Google searches as well as the e-commerce sites popular ones related to your product and the business ideas you project.

Build the list by setting criteria for which businesses count as your competitors:

• Businesses that sell similar products or services.
• Businesses with similar business locations.
• Businesses that market to a similar or slightly different target audience.
• Both are new to the market, or the competitor has more experience.

A varied list of competitors gives you a fuller picture. Aim for 7 to 10 relevant competitors before you pick the ones you want to analyze.

Channels where you can find information about competitors:

• Google and other search engines: It is very simple: type in the name of the competitor or the brand they operate, and you get the most general information about them.
• Online advertising: Ads will show up while you search for information about your competitors.
• Customers: You can collect customer feedback directly (interviews, surveys, etc.) or indirectly, by finding out what customers think of your competitors.
• Trade publications: Online and offline trade publications are how competitors connect with their customers. Follow them on the competitor's media channels such as social media, shopping malls, etc.
• Social media and forums: You can gather opinions and information from the crowd to see how competitors are rated and where they stand in the industry right now.

Step 2: Evaluate your competitors

Next, evaluate each competitor against these criteria: market share, scale of operations, strengths, weaknesses, and the strategies they currently use.

Evaluating and researching competitors in detail helps your business set direction and choose strategies Marketing results.

Step 3: Classify your competitors

Competitors can be grouped into different levels of competition:

1. Direct competitors: These businesses sell the same product or service to your target customers, and customers will compare them with you. Example: Nike & Adidas.
2. Indirect competitors: These businesses sell similar products or services, but to a different customer group. Example: Victoria’s Secret & Wal-Mart.
3. Potential competitors: These are related brands. They may serve the same audience without selling the same product as you, or they may compete with you in some other way. They could become partners, or future competitors if they expand their business. Example: Gatorade (an American sports drink and food maker) and Under Armour (an American company that makes footwear and apparel).

Step 4: Collect competitor information

To collect competitor information effectively, decide first which groups of information you need. You usually need these 5 groups after analyzing a competitor:

• Company overview: The most general information, to understand a competitor's size, structure and how it runs its business.
• Competitor's products and services: Features and prices help you plan sensible marketing campaigns and improve your own products.
• Distribution channels: How the channels operate and how they are structured helps you organize your own distribution as efficiently as possible.
• Competitor's communications: A competitor's marketing online and offline approach directly affects how well your business reaches potential customers.
• Competitor's customers and how they see the competitor: Collecting customer feedback about competitors is an effective way to learn from the negative comments and shape strategies that suit your business.

Step 5: Build a competitor analysis table

Once you have data on your competitor group, organize it in a table so it is easy to share and to update over time. Group the data by the criteria you want to compare, such as:

• Price
• Product offering
• Social media engagement
• Communication content
• Customer requirements
• Other characteristics

Step 6: Apply competitor analysis models

Depending on your purpose, choose one model or combine several. There are 5 popular analysis models in use today:

• Model SWOT: is a useful competitor analysis tool for assessing the Strengths, Weaknesses, Opportunities and Threats of a business organization or a project.
• Michael Porter's Five Forces model: Michael Porter's Five Forces model helps identify and analyze 5 different competitive forces, and it applies to any industry.
• Competitive Profile Matrix (CPM): The Competitive Profile Matrix (CPM) identifies a company's main competitors and compares its strengths and weaknesses with their strategic positions.
• Competitive polygon model: A shape that plots several competitive factors on a polygon chart to show a company's capability relative to a competitor or a group of competitors.
• Strategic group analysis: A competitive analysis framework that lets you group competitors into clusters based on how similar their strategies are.

Step 7: Write the competitor analysis report

Once you have all the information you need, you have to present it clearly to your manager. Pull the information and analysis together into a complete competitor analysis report, from content to presentation.

A report with full information on your competitors helps the business set effective marketing and sales strategies, strengthen its position in the market and grow its market share in the future.

Tools that support competitor analysis

The most effective and detailed way to analyze competitors is to use analysis tools. Here are tools for competitor analysis and their standout features:

SEMrush

SEMrush is a website and SEO analytics tool used for keyword research, competitor analysis, rank checking and online marketing recommendations.

The tool gives detailed keyword data, including monthly search volume, competition level and related keyword suggestions, so you can find suitable keywords and plan Google Ads campaigns. You only need to select the keywords you want to rank for and set up each competitor.

SEMrush also lets you analyze your competitors, assess the level of competition and the keywords they use, so you can build effective marketing strategies.

Similarweb

Similarweb is an online market analysis tool that measures traffic and activity on a website. It lets you check a site's traffic, its keywords, the social media channels used to search for and reach that site, related sites and other traffic sources.

Similarweb also provides data on competing websites in the same industry, with metrics such as traffic, average time on page, average pages viewed and bounce rate.

With this, you can analyze your competitors and see the social media and advertising strategies they use to strengthen their position.

Google Analytics

Google Analytics is a free website analytics tool used to track traffic and user behavior on a website. It is also one of the effective tools for Google Analytics analyzing competitors.

Here are some standout features of Google Analytics:

• Shows how many people visit the website.
• Traffic sources, including search, ads and referring sites.
• The keywords visitors use to find and reach the website.
• Which pages on your website get the most visits, the average time users spend on the site, or when they bounce rate leave it.
• Other user data such as age, gender, country, device and screen resolution. From there you can see exactly which audience a competitor is aiming at.

Ahrefs

Ahrefs is a leading SEO and marketing tool that helps you research keywords, analyze backlinks and track website metrics. Ahrefs offers a range of powerful features, including:

• Keyword analysis: Helps you find keywords related to your content, so you can optimize SEO and increase traffic.
• Backlink analysis: Lets you analyze the backlinks of your own site and your competitors' sites to find new link opportunities and improve your site's credibility.
• Metric tracking: Helps you track your site's metrics, including search engine rankings, traffic, average time on page and bounce rate.
• Competitor analysis: Provides detailed reports on competitors' marketing campaigns, so you can find new opportunities for your own campaigns.

Alexa

Alexa is a website analytics tool used to evaluate and compare websites based on traffic and other metrics. It was developed by Amazon and offers features such as:

• Site ranking: The Alexa rank shows where a website sits in global and regional rankings.
• Traffic: Alexa estimates the number of visitors to a website over a given period.
• Average time on site: This tells you how long an average user spends browsing your website.
• Unique users: Alexa shows the number of unique users who visit a website over a given period.
• Other websites: The tool also gives information about other websites related to the site you are interested in.

Alexa also offers other tools for researching markets and competitors and analyzing keywords and links related to your field of business.

Points to note when analyzing competitors

Here are a few things to keep in mind before you start analyzing competitors:

Competitor analysis is a long-term job

Competitor information is data collected over a long period, and competitors keep changing and growing. So collecting data and information is an ongoing process, not something you do once and never repeat.

Watch the timing of your analysis

When you run the analysis matters a lot. Competitors make their moves at different points in time.

So to get accurate, useful results, choose the right time to run your analysis and keep updating the information, so your strategic decisions fit the current market.

Start with a clear direction

If you gather your analysis without a direction or a specific end goal, the work gets much harder, because you end up sorting through a mess of information. Before you dig into research, decide what your analysis goal is and what you hope to learn about your competitors.

Analyze and decide based on data

When you analyze competitors, it is important to be aware of your starting assumptions and check them against data, rather than relying on what you "believe" about your competitors.

Invest to get the information you need

If you are willing to invest in quality information, you can simplify the data collection around your competitive analysis. That lets you reach accurate conclusions faster, based on verified information.

Frequently asked questions about competitor analysis

What does a competitor analysis table give you?

A competitor analysis table is a very useful tool for helping businesses understand their market better and compete with their rivals. Its benefits include:

• Understand your competitors better: The table shows competitors' size, market share, products and services, marketing strategies, prices and other characteristics. With it, a business understands its competitors better and can build a fitting competitive strategy.
• Find strengths and weaknesses: It lets a business see competitors' strengths and weaknesses, and build an effective business strategy from there. 
• Make accurate business decisions: The table shows competitors' prices, marketing strategies and other competitive activity, which gives a business a clearer sense of its next move. 
• Develop better products and services: It lets a business compare its products and services with those of its competitors. 

What do you need to learn about competitors?

To analyze competitors, a business needs to understand the following: 

• The competitor's business goals and strategy
• The competitor's products and services (their strengths and weaknesses)
• Market and customers 
• Financial strength 
• Culture and vision 
• Business and marketing strategy 

Besides analyzing competitors, a business needs a solid business plan that brings in profit. Take the full-scope SEO project for the website of Chỉ Phẫu Thuật CPT, carried out by Mona Media over 6 months. It brought the business 11.000+ ORGANIC TRAFFIC PER MONTH and 200+ new customers per day even though they had never done SEO before.

Contact Mona Media through the contact button below and bring in substantial revenue for your business.

That is everything you need to know before you start the analyzing competitors for your business. Invest the time and use the methods well, so the changes you make to your business strategy are as sound as they can be.

See also: 

• What is market analysis? The market analysis process you need to know
• What Is Brand Positioning? How to Build a Standout Brand