What is a competitive analysis?
A competitive analysis is the systematic process of identifying and evaluating the activities, strengths and weaknesses of competitors.
It helps companies to better understand their position in the market, recognize trends and develop strategies based on this.
The analysis usually includes the examination of:
- Direct competitors: Companies that offer similar products or services and address the same target group.
- Indirect competitors: Companies that offer substitutive products or could potentially become a threat through innovation.
- Market leaders: Companies that play a pioneering role in the industry and are considered the benchmark.
Competitive analysis allows companies to understand how competitors react to market changes, what pricing models they use, what distribution channels they use and how they interact with customers.
All of this information is valuable for your own strategy development.
The most important steps in competitive analysis
Step 1: Identification of competitors
The first step is to identify direct and indirect competitors.
This means considering not only companies that offer the same products or services, but also those that could potentially pose a threat, e.g. through new technologies or disruptive business models.
Step 2: Collecting data on competitors
The next step is to gather as much information as possible about the competitors.
This can be done through public sources (websites, reports, press articles) or through in-depth market analyses, such as surveys or interviews.
Important data points are the product range, pricing, marketing strategies, sales channels and customer feedback.
Step 3: Analyze strengths and weaknesses
Once the data has been collected, it must be structured and analyzed.
What strengths do the competitors have?
These could be, for example, strong brand awareness or innovative products.
Weaknesses could include a lack of customer loyalty, high prices or inefficient processes.
These findings help to identify opportunities for your own company.
Step 4: Determine market position
The analysis helps you to better assess your own market position.
How does your company compare to the competition?
Which areas require improvement and where do your own competitive advantages lie?
Step 5: Derive strategies
The final step is to derive concrete measures from the competitive analysis. This could include adjusting the pricing policy, improving customer service or investing in new technologies.
The aim is to develop a strategy that enables the company to stand out clearly from the competition and take a stronger position in the market.
Methods of competitive analysis
Various methods are available for carrying out a competitive analysis:
1st method: Surveys
Surveys offer direct insight into the opinions of the target group and show how companies are perceived in comparison to the competition.
They help to identify competitors’ weaknesses and make targeted adjustments in order to strengthen your own position and identify market trends at an early stage.
2nd method: SWOT analysis
A classic method in which the strengths, weaknesses, opportunities and threats of the company and its competitors are analyzed.
3rd method: Porter’s Five Forces
This method analyzes the competitive forces within an industry, including the threat of new market entrants, the bargaining power of suppliers and customers, and competition among existing companies.
4th method: Benchmarking
This method compares a company’s own performance and processes with those of its strongest competitors in order to identify potential for improvement.
5th method: Customer journey mapping
By analyzing the customer journey, the behavior of your own customers can be compared with that of competitors’ customers in order to understand which touchpoints are crucial for success.
Conclusion
A competitive analysis is essential for any company that wants to be successful on the market in the long term.
It offers valuable insights into the strategies of competitors and shows where opportunities and risks lie.
A thorough analysis enables companies to play to their strengths, eliminate weaknesses and consolidate or even expand their position in the market.
In an increasingly competitive environment, continuous monitoring and evaluation of the competition is the key to sustainable success.
More about competitor analysis
- 8 Key metrics for a competitive analysis
- 7 Methods of competitive analysis
- The 6 steps to your own competitive analysis
- Competitor Analysis: 7 important criteria for evaluating the competition
- Competitive analysis in the context of marketing: Strategically understanding and utilizing the market
- Competitive analysis in HR marketing: Strategies for the best talent
