A central criterion of any competitive analysis is the market share of the competition.
Companies need to understand which competitors have how much market share and how this has changed over time.
A company with a large market share can be considered a strong competitor, while smaller companies may still occupy undiscovered potential or niches.
- How large is the market share of competitors?
- How stable or volatile is their market position?
- Which companies are growing the fastest?
This information helps to understand the balance of power in the market and to assess long-term developments.
Criterion 2: Product and service offering
Analyzing the product and service offering of competitors is another decisive criterion.
This involves evaluating the breadth and depth of the portfolio, i.e. which products or services are offered and how they are structured.
- What products or services do the competitors offer?
- Are there differences in quality, range of functions or innovations?
- How do they position themselves in terms of price-performance ratio?
A precise comparison with the company’s own portfolio provides information on how well the company is positioned in relation to the competition and whether there are gaps in the market that need to be exploited.
Criterion 3: Pricing strategy
The pricing strategy of competitors is another decisive criterion.
The aim here is to understand how competitors price their products or services and what impact this has on their market position.
- Do competitors pursue a low-price strategy or do they focus on premium products?
- Are there frequent price promotions or discounts?
- How do customers react to these pricing strategies?
A precise analysis of pricing helps to better assess price sensitivity in the market and adapt your own pricing models.
Criterion 4: Sales and marketing strategies
Sales and marketing strategies are largely responsible for how successfully a company brings its products or services to the customer.
The competitive analysis should examine which sales channels the competition uses and how it presents itself in its communication with customers.
- Which sales channels do competitors use (online, stationary, direct sales)?
- What is their presence in social media and which marketing channels are preferred?
- How do the advertising messages and brand communication differ?
The evaluation of this information provides valuable insights into the market strategy of the competition and can help to optimize your own marketing and sales approaches.
Criterion 5: Innovative strength and technological development
In times of rapid technological progress, a company’s innovative strength is a decisive competitive factor.
It is important to understand how innovative competitors are and how much they invest in research and development.
- How often do competitors launch new products or services on the market?
- What technologies do they use?
- Are there any groundbreaking innovations that have the potential to change the market?
Companies with a high level of innovative strength can adapt more quickly to changing market conditions and secure a competitive advantage in the long term.
Criterion 6: Customer loyalty and satisfaction
Customer loyalty is a strong criterion for assessing competitiveness.
It is about understanding how loyal customers are to competitors and how satisfied they are with the products and services.
- How do customers rate competitors’ products (e.g. through online reviews or customer surveys)?
- What measures do competitors take to retain their customers (e.g. through loyalty programs or special services)?
- How is the competition’s customer service set up?
A company that has strong customer loyalty will be more successful in the long term than one that has difficulty retaining its customers.
Criterion 7: Strengths and weaknesses
An analysis of competitors’ strengths and weaknesses makes it possible to find out specifically in which areas the competition is particularly strong and where weaknesses lie.
- What core competencies characterize the competitors?
- Are there weaknesses in the product range, market strategy or customer service?
- In which areas is there potential for your own company to set itself apart?
This analysis is essential in order to understand where the greatest opportunities and threats lie in competition.
Conclusion
A thorough competitive analysis based on clear and structured criteria is of great importance for every company.
It provides the basis for adapting one’s own market strategy, building on strengths and eliminating weaknesses.
The most important criteria – from market share and product strategy to innovative strength – provide companies with a comprehensive overview of the competitive landscape.
In the long term, continuous competitive analysis enables companies to remain agile and competitive by regularly reassessing their position in the market and adapting their strategies.
More about competitor analysis
- Competitive analysis explained simply
- 8 Key metrics for a competitive analysis
- 7 Methods of competitive analysis
- The 6 steps to your own competitive analysis
- Competitive analysis in the context of marketing: Strategically understanding and utilizing the market
- Competitive analysis in HR marketing: Strategies for the best talent
