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how to conduct competitive analysis

How to Conduct a Competitive Analysis? Definition, Purpose, Benefit

As a businessman, you must know methods and examples of competitive analysis. By knowing it, you can more easily develop a strategy so that your business is superior to your competitors. The analysis can be done by relying on instinct and intuition alone, but the resulting information will not be as detailed and comprehensive.

What is a Competitive Analysis?

Competitive analysis is an effort made by a company to identify the competitor’s strategy in the same industry, to find out competitors’ strengths and weaknesses, and to anticipate competitors’ steps. It also involves gathering data and insights on competitors’ pricing, marketing, product, until overall business operations. The analysis result can be used as a decision for the next step in creating a product and marketing strategy.

What is the Purpose of Competitive Analysis?

The purposes of competitor analysis are as follows.

  1. Identify the strongest competitors in the same business field.
  2. Know competitors’ strategies.
  3. Anticipate competitor actions that could cause your business to suffer losses.
  4. Know how your competitors react when you create actions that affect them.
  5. Influence the actions that your business competitors will take.

Meanwhile, the benefit of conducting a competitor analysis is creating a more optimal marketing strategy and also opening up hidden opportunities.

How to Conduct a Competitive Analysis?

There are several ways to carry out competitor analysis to get comprehensive information. Starting from determining analysis objectives, collecting competitor data, until using certain formulas to make the process easier.

1. Determine the Purpose of the Analysis

The first step is to determine the purpose of the analysis so that the results can be used as evaluation material for the business you are developing. The purpose of competitive analysis includes finding out what innovations competitors are making or understanding the marketing strategies they are implementing.

2. Conduct Market Research

Market research can be carried out by employees or with the help of business consultants. By knowing what products or services your competitors offer, you can also be helped in identifying consumer wants and needs. The target market for your business and competitors may be the same or different. Even though the product offered is the same, the target market may be different. These differences in target markets influence business strategy.

Read Also : Guide To Do Market Research

3. Grouping the Types of Competitors

After that, you can group competitors based on type. There are direct competitors, indirect competitors, and shadow competitors. By knowing which group your competitors fall into, it will be easier for you to determine your priority scale.

4. Collect Competitor Data

The next way is to collect as complete competitor data as possible. One of them is that you can find out the strengths and weaknesses of competitors to be used as an evaluation by your team. Apart from that, you can also analyze the types of products offered, how big the market is, as well as the opportunities and threats.

5. Using SWOT Analysis

To analyze competitor data that has been collected, you can use the SWOT method. The SWOT method (Strength, Weakness, Opportunity, Threats) is a method that can be used to determine the strengths, weaknesses, opportunities and threats of competitors. So that the data collected can be more comprehensive.

6. Monitor Competitors’ Social Media

Monitoring competitors’ social media can be an example of competitor analysis. By observing competitors’ social media, you can analyze the content, activities, and level of popularity of competitors in the eyes of the public.

Learning your competitors’ strengths and weaknesses can support you to do better marketing. If you don’t know your competition, you can’t beat them. Using competitive analysis can improve your marketing strategy and enable attracting your target audience faster. Competitive analysis should also lead to action, which means following up the findings with clear business goals and a strong business plan.

Read More: What is Branding? What is Its Purpose for Business?

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