Competitor analysis helps us understand our points of distinction and similarity with our competitors – to develop our own strategy; to address the target segment.
But if we are asked to perform such an analysis – the first question we ponder on – How do I approach it? There are numbers of ways to look at the competitors; but we need one which provides a more comprehensive overview with the data easily available.
Here, we outline a simple approach to perform a strategic competitor analysis which helps to position your brand in the current market and also to plan for the future.
First step to understand your competition is to identify them. We can’t analyse them if we don’t know who there are. Identify your competitors and list them.
And for each competitor, start to source the basic details – their website, social media handles, when was the company founded, who are the founders, what’s their background, where is the company’s headquarters, what’s the current employee size of the company, is it funded, if so and if possible, see if you can get an idea of how much they are funded – using publicly available data.
Once we have the basic details, we can look at their product/service offerings.
Here are the key questions to ask:
What do they basically do? Try to put it down in simple words. What are their products? What is the customer pain point that they are trying to solve? How do they describe their unique value proposition? Which products meet the same need as yours? Who are their target customers? What is their pricing strategy? How do they position their products?
Once we get the answers for these questions, we would be able to understand their portfolio better. And it would help to segment them as primary, secondary or tertiary competitors.
Primary competitors are direct competitors – they sell similar/same product to similar/same audience. Secondary competitors – they sell a similar product – may offer high end or low-end version of it to a different target audience. Tertiary competitors – Related brands that sell to the same market/target audience but currently different products; if they expand their offering – then they could be a direct competitor.
Segmentation helps to us strategize better, and it also allows us to fill in if there are any gaps that customers are looking for.
Next step is to look at their digital presence.
Key questions we suggest here – What are the channels in which they are active? How often do they post? Do they seem to use paid ads? What is their content mix? (Original/User Generated) Do they work with influencers? Do they participate/sponsor in any events? Once you these details, you would be able to gauge their brand persona and presence.
Finally, with the details collected, do a SWOT analysis. It might sound outdated – but trust us – you would be surprised with the insights you would gather. It looks easier when said, but it requires a lot of effort – but it is definitely worth it!