Competition analysis is an integral part of any business development. It is an ongoing process that spans more than one area of your strategy.
Regardless of your business type, you can distinguish five key points in the analysis of each competitor:
How are the prices of competition?
One of the most important points in competition analysis, online and offline, is price comparison. Check your competitor's products/services in terms of its pricing policy. Is it cheaper or more expensive and where? Try to understand why. Price is an important factor for consumers when they see products side by side.
Attention: this does not mean that you have to lower prices just to be cheaper than the competition. That would affect the profit margin and would lead to long-term damage to the business. However, if there is a difference you should be aware of it so that you can adjust accordingly.
Your research will of course be helped by the price comparison site, but also physical navigation and research. Things are more complex when your product is service provision. Even so, however, you need to know the range of prices and benefits of your competition.
What market share does it have?
Certainly in a competition analysis you need to determine the market share held by your competitor. To do this you must first know the total market sales and then make an approximation of the competitor's sales.
The total market size can be found relatively easily, as a lot of data is available from regulatory bodies, chambers of commerce, etc. In contrast, it is quite difficult to determine your competitor's share, especially if you are not a professional and need to collect a lot of data and variables.
In digital marketing, many times we also use the data that Google gives us regarding searches of search terms of interest to us, to understand the size of active demand.
What is your marketing strategy?
The analysis of the marketing strategy is part of the competitive analysis. The strategy your competitor is following can reveal something really interesting about yours. Examine how strong his presence in the acquisition channels.
- Use Facebook Ad Library to track his active Facebook & Instagram ads.
- Use analysis tools like SimilarWeb to understand changes in traffic and acquisition channels.
- Follow the social media and write to mailing list to receive updates on campaigns they are running.
- Use a web tool like Pixida basic to get an overview of your competitors in relation to your business easily.
Take notes on where your competitor gives more importance and weight. With competitive marketing analysis you might discover a new sales channel that you've been ignoring, or not paying the attention you should, and finally hiding an opportunity for your business.
What is its competitive advantage?
Why would one of your customers buy from your competitor? Is it his prices? Is it the credibility and brand he has established? You have to manage to collect all the things that make your competitor better than you or others. Of course, the ultimate goal is to understand what you can improve you in your business so that at the end of the day you stand out against the competition.
What does the competition do on its Website/Eshop differently?
Consider the entire experience of a customer of your competitor, from the homepage until purchase completion. Pay attention to the way products are presented, in titles, descriptions and texts.
Site Audit on a Competitor
Use speed calculation tools such as Google Pagespeed insights to check the speed of your website. loading speed of the site and online tools for SEO audit to evaluate the structure of the site, in terms of SEO.
Finally, it's worth doing a technical audit of the technologies and add-ons your competitor uses on their site. This can be easily done with the free Builtwith tool, where it will give you all the necessary information that you can't easily see with a simple navigation.
How to write the competition analysis
All of the above and many more that you consider important to your competitors, you will have to gather them somewhere. The simplest way is an Excel spreadsheet or a table, which you will fill in with all the necessary information per competitor.
Make sure you update your analysis data regularly and pick out what you consider to be points of attention for the improvement of your own business.