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Biz Tips: Doing a Competitive Analysis for your Business
by Allen T on January 12th, 2016

Know Your Competitors...And Know More About Yourself ! 

What exactly is a competitive analysis? It simply means assessing and having a good handle on who your competitors are, what value they provide, understanding their (and your) strengths and weaknesses, and where your business fits in. Do you really need to do this? Yes! We know you’re strapped for time, but this exercise is worth every minute you’ll spend on it. Competitive analysis is one of the key areas you need to understand in order to succeed.

According to Fleisher & Bensoussan’s, Methods and Techniques for Analyzing Business Competition, “Competitor analysis is an essential component of corporate strategy. It’s argued that most firms don’t conduct this type of analysis systematically enough… As a result, traditional environmental scanning places many firms at risk of dangerous competitive blindspots due to a lack of robust competitor analysis.” Sounds formal, but true. However, thorough competitive analysis is not hard to do.

The priority order/steps to competitive analysis goes something like this:
  • Define and know your industry
  • Know your customers and potential customers
  • Know specifically what type of customer needs your product or service
  • Know who your competitors are
Spending time really looking at your competition and where you fit can help you target your marketing efforts, but you need to answer the following questions first to get started. Based on your particular business, you might want to add others:

Who are my top competitors? There are likely other companies in your area who provide similar services. Are you continually competing against the same companies for business? These are your biggest competitors and you should focus your efforts here first.

How does my product or service stack up to the competition? Take an honest look at their offerings. Is your quality commensurate? Do you have similar offerings? If you have a niche product that your competition doesn’t, can your competitors actually become a source of referrals for you? What is the unique value you provide that competitors don’t or can’t? Emphasize these benefits in your marketing. Remember that these benefits might not be the product itself, but could be something like a longer warranty or free replacement.

Is my pricing high or low for the market? If your pricing is too high, you could be losing customers; too low, and you’re leaving revenue on the table. This doesn’t mean you have to price exactly the same as your competitors, it just means you should be able to justify your price based on the value consumers get from it. If your product is 100% organic, or you have stellar customer service, customers may be willing to pay more.

Who else am I competing with? Most businesses have a host of indirect competitors as well direct. Start to think more broadly about your business. If you operate a movie theater, you are indirectly competing with anyone who offers entertainment. A house painter might be competing against a landscaper for home improvement dollars. While this seems overwhelming at first, these indirect competitors can be good marketing partners. Can you strike a deal with the house painter to recommend your landscaping company to his clients?
Thanks to Vertical Response for providing the data for above. 


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2 Comments

Neil Pursey - July 4th, 2014 at 6:20 AM
There's loads of SEO techniques to get competitor data as well. Incoming link research is one of them. The research can help you identify the relationships your competitors have, which then unlocks all sorts of content strategies :)
Allen T - February 15th, 2016 at 6:52 PM
Thanks for the feedback Neil. I advise that clients should not rely on SEO tech for a comprehensive Competitive analysis report. You first have to know your competitors, before you know where/ whom to search. SEO is overused and often misunderstood as the end all...be all of marketing techniques...It is part of a tool box...not a replacement for one.
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