How to Complete a Competitor Analysis.
Understanding your competitors is one of the most powerful strategic advantages you can create. This practical guide shows you how to assess competitor pricing, positioning, and distribution to shape a smarter go-to-market approach.
Introduction.
In today’s competitive business environment, understanding your rivals is essential to gaining a strategic advantage. One of the most effective ways to achieve this is through a thorough competitor analysis.
This process allows businesses to evaluate their standing in the market, identify strengths and weaknesses, and spot opportunities for growth. This article will guide you through how to complete a competitor analysis, focusing on key areas such as pricing, positioning, and distribution.
What Is A Competitor Analysis?
Competitor analysis is the practice of researching and evaluating the strengths and weaknesses of current and potential competitors.
It involves gathering insights about their products, market strategies, customer base, and operational tactics.
Done well, it helps you:
Understand how others in the market position themselves.
Benchmark your performance.
Find gaps or opportunities others have missed.
Adjust your pricing, offering, or messaging for stronger results.
Performing a competitor analysis is not about copying. It's about learning the market and using the data to inform your own business strategy, to outperform rivals and meet customer needs more effectively.
Step 1: Identify Your Competitors.
The first step in any competitor analysis is to clearly identify who your competitors are. They can be classified into three main types:
Direct Competitors: Businesses offering similar products or services to the same target audience.
Indirect Competitors: Those providing alternative solutions that satisfy the same customer need.
Emerging Competitors: New entrants or companies from related industries that could disrupt the market.
Once identified, create a comprehensive list to ensure no relevant competitor is overlooked in your analysis.
Ask yourself: Who else is trying to win my customer’s attention, trust, or budget?
Step 2: Analyse Pricing Strategies.
Pricing is one of the most critical factors in a competitor analysis. Understanding your competitors’ pricing strategies can help you position your own products or services effectively.
Pricing isn’t just about what you charge. It reflects how you want to be perceived.
Evaluate:
The price range of their products or services.
Discounts and promotional offers.
Pricing models (e.g., subscription, one-off payment, tiered pricing).
Perceived value compared to price.
Even payment methods can simultaneously affect both competitiveness and pricing.
Regularly monitoring competitor pricing ensures you remain competitive without compromising your profit margins.
Step 3: Assess Market Positioning.
Positioning determines how customers perceive a brand in relation to its competitors.
To analyse competitor positioning, look at:
Brand messaging and communication channels.
Unique selling propositions (USPs) they emphasise.
Target customer segments and how they cater to their needs.
Market reputation and customer reviews.
The tone, style, and emphasis in their copy.
Their visual identity and customer experience.
By understanding these elements, you can fine-tune your own brand positioning to highlight differentiators and fill gaps that competitors haven't addressed.
Step 4: Examine Distribution Channels.
Distribution affects how products or services reach the customer and can be a significant competitive advantage.
Investigate:
What distribution channels do your competitors use (e.g., online platforms, retail stores, third-party distributors)?
Geographic or international coverage and market penetration levels.
Efficiency, speed of delivery, reliability, and customer service promises.
Partnerships or affiliations that enhance their distribution capabilities.
Knowing where and how your competitors distribute their offerings allows you to identify potential weaknesses or opportunities to expand your own distribution network.
This also reveals infrastructure, business model choices, and scale, all useful when designing or refining your own approach.
Step 5: Review Content and Communication Strategy.
Compare and analyse how your competitors shape perception and attract leads through their marketing.
Pay attention to:
What channels they use: organic social, paid ads, SEO, events, PR, etc.
The frequency and quality of content (blogs, videos, thought leadership).
Who the content is targeting, and whether it aligns with their positioning (or overlaps with yours).
What tone or personality do they use, and does it differ from yours.
Analysing this way helps you get clarity on what's going on in the market, what else your audience is exposed to, and what you're up against. Let it inspire your own ideas while highlighting what’s overdone or underused in your category.
Step 6: Compile and Analyse Your Findings.
After collecting data on pricing, positioning, and distribution, organise the information into a competitor analysis matrix or report.
It can be as simple as a spreadsheet or grid on a single sheet of paper. This makes it easier to compare competitors side-by-side and extract actionable insights.
Focus on:
Identifying patterns and market trends.
What are the most common strengths across the board?
Pinpointing gaps in the market that your business can exploit.
Recognising strengths you can learn from and weaknesses you can capitalise on.
Use this insight to refine your own value proposition, messaging, pricing, and go-to-market strategy.
Effective competitor analysis is not a one-time exercise but an ongoing process that keeps your business aligned with market dynamics, so revisit these steps.
Summary.
Completing a thorough competitor analysis is integral to crafting a winning business strategy. By meticulously evaluating your competitors’ pricing, positioning, and distribution, you gain a clearer understanding of the marketplace and where your business fits.
This knowledge enables you to make informed decisions that enhance your competitive edge and drive growth.
Regularly revisiting your competitor analysis helps you stay ahead of industry shifts and continue meeting customer expectations effectively. Share and discuss it with other teams to help refine and align your competitive position across the business.
In the complex world of business, knowing your competitors inside out can be the difference between thriving and merely surviving.