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How to Write Competitive Analysis in a Business Plan (w/ Examples)

Free Competitive Analysis Kit

• Vinay Kevadia
• January 9, 2024

13 Min Read

Every business wants to outperform its competitors, but do you know the right approach to gather information and analyze your competitors?

That’s where competitive analysis steps in. It’s the tool that helps you know your competition’s pricing strategies, strengths, product details, marketing strategies, target audience, and more.

If you want to know more about competitor analysis, this guide is all you need. It spills all the details on how to conduct and write a competitor analysis in a business plan , with examples.

Let’s get started and first understand the meaning of competitive analysis.

What is Competitive Analysis?

A competitive analysis involves collecting information about what other businesses in your industry are doing with their products, sales, and marketing.

Businesses use this data to find out what they are good at, where they can do better, and what opportunities they might have. It is like checking out the competition to see how and where you can improve.

This kind of analysis helps you get a clear picture of the market, allowing you to make smart decisions to make your business stand out and do well in the industry.

After having a brief knowledge of what a competitive analysis is, let’s understand how to conduct it:

How to Conduct a Competitive Analysis?

• Identify your direct and indirect competitors
• Study the overall market space
• Prepare a competitive framework
• Take note of your competition’s strategies
• Perform a SWOT Analysis of your competitors

1. Identify Your Direct and Indirect Competitors

First things first — identify all your business competitors and list them. You can make the final list later, but right now jot down all the competitors including new competitors.

Explore your competitors using Google, social media platforms, or local markets. Then differentiate them into direct or indirect competitors. And then distinguish them into direct or indirect competitors.

Direct competitors

Businesses offering the same products or services, targeting a similar target market , are your direct competitors.

These competitors operate in the same industry and are often competing for the same market share.

Indirect competitors

On the other hand, indirect competitors are businesses that offer different products or services but cater to the same target customers.

While they may not offer identical solutions, they compete for the same customer budget or attention. Indirect competitors can pose a threat by providing alternatives that customers might consider instead of your offerings.

2. Study the Overall Market

Now that you know your business competitors, deep dive into the market research. The research should be a combination of both primary and secondary research methods.

Primary research

It means being involved in getting the information directly from customers or by buying the product itself. Some examples of primary market research methods include:

• Purchasing competitors’ products or services
• Conducting interviews with customers
• Administering online surveys to gather customer insights

Secondary research

The secondary research involves utilizing pre-existing gathered information from some relevant sources. Some of its examples include:

• Scrutinizing competitors’ websites
• Assessing the current economic landscape
• Identifying technological advancements

Have a good understanding of the market at this point before you proceed with the next step.

3. Prepare a Competitive Framework

Creating a competitive framework is like charting a strategic roadmap for your business in the competitive landscape. It includes defining your USPs, market positioning, and various strategies.

Establishing your competitive positioning clarifies where your business stands among competitors.

Plan how to make your product or service stand out by figuring out ways to make it different to stand out, whether it’s through new features, better quality, or excellent customer service.

Craft unique value propositions that resonate with your target audience, communicating the benefits of choosing your offerings. This framework serves as a compass for crucial business decisions, ensuring alignment with your strategic positioning.

By consistently referencing this framework, your business can effectively meet customer needs, fostering satisfaction and loyalty through tailored products, services, and interactions.

4. Take Note of Your Competition’s Strategies

By stepping into your competitors’ research, you will learn what strategies they use to market their products or services and how they engage with their customers.

This will motivate you to do something more for customers and give you an idea of what your consumers like.

Start by analyzing their marketing strategies, such as sales and marketing channels, promotional activities, and branding strategies. Understand how they position themselves in the market and what USPs they emphasize.

Evaluate their pricing strategies and offerings, and keep an eye on their distribution channel to better understand your competitors. For example, here are the pricing strategies of a barber shop and its competitors:

This information allows you to make informed decisions about your strategies, helping you identify opportunities for differentiation and improvement.

5. Perform a SWOT Analysis of Your Competitors

You would love to know the opportunities and threats of your business, right? To be prepared for it when the time comes.

Well, conducting a SWOT analysis is like the same, it is more about getting to know about your strengths, weaknesses, opportunities, and threats. It also helps you understand your competitive edge in the market.

Whereas strengths and weaknesses focus on internal aspects of your company — opportunities and threats examine the external factors related to the industry and market.

Things to include in your SWOT analysis are:

It includes the positive features of your internal business operations. For example, it might include a strong brand, skilled workforce, innovative products/services, loyal customer base, etc.

It includes all the hindrances of your internal business operations. For example, it might include limited resources, outdated technology, weak brand recognition, inefficient processes, etc.

Opportunities

As the name says, it is all about the opportunities that will come your way in the near or far future. It is mainly about the external factors related to the market or industry trends.

For example, it might include emerging markets, technological advancements, changing consumer trends, profitable partnerships in the future, etc.

You should include any external factor that poses a challenge or any risk for your business in this section. For example, it might include intense competition, economic downturns, regulatory changes, or any advanced technology disruption.

These were the elements to help you conduct the competitive market analysis. Let us now go through how to write it in a business plan.

Want to Perform Competitive Analysis for your Business?

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How to Write Competitive Analysis in a Business Plan

1. determine who your readers are.

Know your audience first, because that will change the whole context of your competitor analysis business plan.

The competitive analysis section will vary depending on the intended audience is the team or investors.

Consider the following things about your audience before you start writing this section:

Internal competitor plan (employees or partners)

Objective: The internal competitor plan is to provide your team with an understanding of the competitive landscape.

Focus: The focus should be on the comparison of the strengths and weaknesses of competitors to boost strategic discussions within your team.

Use: It is to leverage the above information to develop strategies that highlight your strengths and address your weaknesses.

Competitor plan for funding (bank or investors)

Objective: Here, the objective is to reassure the potential and viability of your business to investors or lenders.

Focus: This section should focus on awareness and deep understanding of the competitive landscape to persuade the readers about the future of your business.

Use: It is to showcase your market position and the opportunities that are on the way to your business.

This differentiation is solely to ensure that the competitive analysis serves its purpose effectively based on the specific needs and expectations of the respective audience.

2. Describe Competitive Advantage

One of the most important things in the competitive analysis is to know your competitive advantage and gain insight into how you are a better option than competitors.

Your competitive analysis should pinpoint the competitive advantage based on the competitors’ product line or service and market segment, pricing, and other such situations. Some of the points you might include in this section are:

• Product/service differentiation in terms of quality or innovation
• Cost leadership or competitive pricing
• Brand reputation
• Customer service excellence
• Diverse and effective marketing strategy

3. Explain your strategies

Your competitor analysis section should not only highlight what opportunities or threats your business has. It should also mention that what will be the strategies to overcome those threats or capitalize on the opportunities.

It could be for taking a top-notch quality for your products or services, exploring the unexplored market segment, or having creative marketing strategies.

4. Know the pricing strategy

To understand the pricing strategy of your competitors, there are various aspects you need to have information about. It involves knowing their pricing model, evaluating their price points, and considering the additional costs, if any.

One way to understand this in a better way is to compare features and value offered at different price points and identify the gaps in competitors’ offerings.

Once you know the pricing structure of your competitors, compare it with yours and get to know the competitive advantage of your business from a pricing point of view.

Competitive analysis example

Need help writing the competitive analysis section of your business plan? Here’s the barbershop competitive analysis example to help you get started.

1. List of competitors

Direct & indirect competitors.

The following retailers are located within a 5-mile radius of J&S, thus providing either direct or indirect competition for customers:

Joe’s Beauty Salon

Joe’s Beauty Salon is the town’s most popular beauty salon and has been in business for 32 years. Joe’s offers a wide array of services that you would expect from a beauty salon.

Besides offering haircuts, Joe’s also offers nail services such as manicures and pedicures. In fact, over 60% of Joe’s revenue comes from services targeted at women outside of hair services. In addition, Joe’s does not offer its customers premium salon products.

For example, they only offer 2 types of regular hair gels and 4 types of shampoos. This puts Joe’s in direct competition with the local pharmacy and grocery stores that also carry these mainstream products. J&S, on the other hand, offers numerous options for exclusive products that are not yet available in West Palm Beach, Florida.

LUX CUTS has been in business for 5 years. LUX CUTS offers an extremely high-end hair service, with introductory prices of $120 per haircut.

However, LUX CUTS will primarily be targeting a different customer segment from J&S, focusing on households with an income in the top 10% of the city.

Furthermore, J&S offers many of the services and products that LUX CUTS offers, but at a fraction of the price, such as:

• Hairstyle suggestions & hair care consultation
• Hair extensions & coloring
• Premium hair products from industry leaders

Freddie’s Fast Hair Salon

Freddie’s Fast Hair Salon is located four stores down the road from J&S. Freddy’s has been in business for the past 3 years and enjoys great success, primarily due to its prime location.

Freddy’s business offers inexpensive haircuts and focuses on volume over quality. It also has a large customer base comprised of children between the ages of 5 to 13.

J&S has several advantages over Freddy’s Fast Hair Salon including:

• An entertainment-focused waiting room, with TVs and board games to make the wait for service more pleasurable. Especially great for parents who bring their children.
• A focus on service quality rather than speed alone to ensure repeat visits. J&S will spend on average 20 more minutes with its clients than Freddy’s.

While we expect that Freddy’s Fast Hair Salon will continue to thrive based on its location and customer relationships, we expect that more and more customers will frequent J&S based on the high-quality service it provides.

2. Competitive Pricing

John and Sons Barbing Salon will work towards ensuring that all our services are offered at highly competitive prices compared to what is obtainable in The United States of America.

We know the importance of gaining entrance into the market by lowering our pricing to attract all and sundry that is why we have consulted with experts and they have given us the best insights on how to do this and effectively gain more clients soon.

Our pricing system is going to be based on what is obtainable in the industry, we don’t intend to charge more (except for premium and customized services) and we don’t intend to charge less than our competitors are offering in West Palm Beach – Florida.

3. Our pricing

• Payment by cash
• Payment via Point of Sale (POS) Machine
• Payment via online bank transfer (online payment portal)
• Payment via Mobile money
• Check (only from loyal customers)

Given the above, we have chosen banking platforms that will help us achieve our payment plans without any itches.

4. Competitive advantage

5. SWOT analysis

Advantages of a Competitive Environment

Somewhere we all think, “What if we had no competition?” “What if we were the monopoly?” It would be great, right? Well, this is not the reality, and have to accept the competition sooner or later.

However, competition is healthy for businesses to thrive and survive, let’s see how:

1. It pushes you to innovation and improvement

In the competitive environment, a businessperson might get a new idea to bring innovation to the market to keep their products and services trending. This way innovation is promoted.

2. Competition validates your idea

Having a good idea becomes valid when others are developing similar products or services. A competitive market confirms that there is a market for your product and service. It also implies that the expenses of marketing and educating your target customers might likely decrease.

3. Efficiency and cost control

Businesses competing with each other get the motivation to operate efficiently to reduce costs and offer competitive prices. This thing for more sales benefits both businesses and customers.

4. Market responsiveness

A competitive environment forces businesses to be quick to adapt to market changes and customer demands. Companies need to adapt quickly to stay relevant and meet consumer preferences.

Competitive Analysis is critical, but don’t go overboard

Whether you are starting a new business or have an experience in the same field, gaining insight from your competitors will always be beneficial for your business.

Remember: Competitive analysis is essential for your business, but you can not assume all things positive on your side. Be realistic and practical while both conducting and writing this section.

Not only competitive analysis, but the whole business plan is necessary for any business to stay on the path. It will be your guide whenever your business is in any problem.

For assistance, you can visit our business plan writing guide . Additionally, we wish you all the luck in your competitive analysis journey.

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Frequently Asked Questions

Is swot analysis a competitive analysis.

SWOT analysis is a component of a competitive analysis, not the whole competitive analysis. Competitive analysis covers a broad topic of analyzing competitors and knowing the competitive advantage.

What tools can i use for competitor analysis?

Executing a thorough competitor analysis requires the use of various tools to collect and analyze data. Here are some tools you can consider:

• Google Alerts
• Social media analytics
• Google Trends
• Google Analytics
• Competitors’ website

What are the 5 parts of a competitive analysis?

The main five components to keep in mind while having a competitor analysis are:

• Identifying the competitors
• Analyzing competitor’s strengths and weaknesses
• Assessing market share and trends
• Examining competitors’ strategies and market positioning
• Performing SWOT analysis

What is the difference between market analysis and competitive analysis?

Market analysis involves a comprehensive examination of the overall market dynamics, industry trends, and factors influencing a business’s operating environment.

On the other hand, competitive analysis narrows the focus to specific competitors within the market, delving into their strategies, strengths, weaknesses, and market positioning.

About the Author

Vinay Kevadiya

Vinay Kevadiya is the founder and CEO of Upmetrics, the #1 business planning software. His ultimate goal with Upmetrics is to revolutionize how entrepreneurs create, manage, and execute their business plans. He enjoys sharing his insights on business planning and other relevant topics through his articles and blog posts. Read more

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How to create a competitive analysis (with examples)

Competitive analysis involves identifying your direct and indirect competitors using research to reveal their strengths and weaknesses in relation to your own. In this guide, we’ll outline how to do a competitive analysis and explain how you can use this marketing strategy to improve your business.

Whether you’re running a business or playing in a football game, understanding your competition is crucial for success. While you may not be scoring touchdowns in the office, your goal is to score business deals with clients or win customers with your products. The method of preparation for athletes and business owners is similar—once you understand your strengths and weaknesses versus your competitors’, you can level up. 

What is a competitive analysis?

Competitive analysis involves identifying your direct and indirect competitors using research to reveal their strengths and weaknesses in relation to your own. 

Direct competitors market the same product to the same audience as you, while indirect competitors market the same product to a different audience. After identifying your competitors, you can use the information you gather to see where you stand in the market landscape. 

What to include in a competitive analysis

The purpose of this type of analysis is to get a competitive advantage in the market and improve your business strategy. Without a competitive analysis, it’s difficult to know what others are doing to win clients or customers in your target market. A competitive analysis report may include:

A description of your company’s target market

Details about your product or service versus the competitors’

Current and projected market share, sales, and revenues

Pricing comparison

Marketing and social media strategy analysis

Differences in customer ratings

You’ll compare each detail of your product or service versus the competition to assess strategy efficacy. By comparing success metrics across companies, you can make data-driven decisions.

How to do a competitive analysis

Follow these five steps to create your competitive analysis report and get a broad view of where you fit in the market. This process can help you analyze a handful of competitors at one time and better approach your target customers.

1. Create a competitor overview

In step one, select between five and 10 competitors to compare against your company. The competitors you choose should have similar product or service offerings and a similar business model to you. You should also choose a mix of both direct and indirect competitors so you can see how new markets might affect your company. Choosing both startup and seasoned competitors will further diversify your analysis.

Tip: To find competitors in your industry, use Google or Amazon to search for your product or service. The top results that emerge are likely your competitors. If you’re a startup or you serve a niche market, you may need to dive deeper into the rankings to find your direct competitors.

2. Conduct market research

Once you know the competitors you want to analyze, you’ll begin in-depth market research. This will be a mixture of primary and secondary research. Primary research comes directly from customers or the product itself, while secondary research is information that’s already compiled. Then, keep track of the data you collect in a user research template .

Primary market research may include: 

Purchasing competitors’ products or services

Interviewing customers

Conducting online surveys of customers 

Holding in-person focus groups

Secondary market research may include:

Examining competitors’ websites

Assessing the current economic situation

Identifying technological developments 

Reading company records

Tip: Search engine analysis tools like Ahrefs and SEMrush can help you examine competitors’ websites and obtain crucial SEO information such as the keywords they’re targeting, the number of backlinks they have, and the overall health of their website. 

3. Compare product features

The next step in your analysis involves a comparison of your product to your competitors’ products. This comparison should break down the products feature by feature. While every product has its own unique features, most products will likely include:

Service offered

Age of audience served

Number of features

Style and design

Ease of use

Type and number of warranties

Customer support offered

Product quality

Tip: If your features table gets too long, abbreviate this step by listing the features you believe are of most importance to your analysis. Important features may include cost, product benefits, and ease of use.

4. Compare product marketing

The next step in your analysis will look similar to the one before, except you’ll compare the marketing efforts of your competitors instead of the product features. Unlike the product features matrix you created, you’ll need to go deeper to unveil each company’s marketing plan . 

Areas you’ll want to analyze include:

Social media

Website copy

Press releases

Product copy

As you analyze the above, ask questions to dig deeper into each company’s marketing strategies. The questions you should ask will vary by industry, but may include:

What story are they trying to tell?

What value do they bring to their customers?

What’s their company mission?

What’s their brand voice?

Tip: You can identify your competitors’ target demographic in this step by referencing their customer base, either from their website or from testimonials. This information can help you build customer personas. When you can picture who your competitor actively targets, you can better understand their marketing tactics. 

5. Use a SWOT analysis

Competitive intelligence will make up a significant part of your competitor analysis framework, but once you’ve gathered your information, you can turn the focus back to your company. A SWOT analysis helps you identify your company’s strengths and weaknesses. It also helps turn weaknesses into opportunities and assess threats you face based on your competition.

During a SWOT analysis, ask yourself:

What do we do well?

What could we improve?

Are there market gaps in our services?

What new market trends are on the horizon?

Tip: Your research from the previous steps in the competitive analysis will help you answer these questions and fill in your SWOT analysis. You can visually present your findings in a SWOT matrix, which is a four-box chart divided by category.

6. Identify your place in the market landscape

The last step in your competitive analysis is to understand where you stand in the market landscape. To do this, you’ll create a graph with an X and Y axis. The two axes should represent the most important factors for being competitive in your market. 

For example, the X-axis may represent customer satisfaction, while the Y-axis may represent presence in the market. You’ll then plot each competitor on the graph according to their (x,y) coordinates. You’ll also plot your company on this chart, which will give you an idea of where you stand in relation to your competitors. 

This graph is included for informational purposes and does not represent Asana’s market landscape or any specific industry’s market landscape. 

Tip: In this example, you’ll see three companies that have a greater market presence and greater customer satisfaction than yours, while two companies have a similar market presence but higher customer satisfaction. This data should jumpstart the problem-solving process because you now know which competitors are the biggest threats and you can see where you fall short. 

Competitive analysis example

Imagine you work at a marketing startup that provides SEO for dentists, which is a niche industry and only has a few competitors. You decide to conduct a market analysis for your business. To do so, you would:

Step 1: Use Google to compile a list of your competitors. 

Steps 2, 3, and 4: Use your competitors’ websites, as well as SEO analysis tools like Ahrefs, to deep-dive into the service offerings and marketing strategies of each company. 

Step 5: Focusing back on your own company, you conduct a SWOT analysis to assess your own strategic goals and get a visual of your strengths and weaknesses. 

Step 6: Finally, you create a graph of the market landscape and conclude that there are two companies beating your company in customer satisfaction and market presence. 

After compiling this information into a table like the one below, you consider a unique strategy. To beat out your competitors, you can use localization. Instead of marketing to dentists nationwide like your competitors are doing, you decide to focus your marketing strategy on one region, state, or city. Once you’ve become the known SEO company for dentists in that city, you’ll branch out. 

You won’t know what conclusions you can draw from your competitive analysis until you do the work and see the results. Whether you decide on a new pricing strategy, a way to level up your marketing, or a revamp of your product, understanding your competition can provide significant insight.

Drawbacks of competitive analysis

There are some drawbacks to competitive analysis you should consider before moving forward with your report. While these drawbacks are minor, understanding them can make you an even better manager or business owner. 

Don’t forget to take action

You don’t just want to gather the information from your competitive analysis—you also want to take action on that information. The data itself will only show you where you fit into the market landscape. The key to competitive analysis is using it to problem solve and improve your company’s strategic plan .

Be wary of confirmation bias

Confirmation bias means interpreting information based on the beliefs you already hold. This is bad because it can cause you to hold on to false beliefs. To avoid bias, you should rely on all the data available to back up your decisions. In the example above, the business owner may believe they’re the best in the SEO dental market at social media. Because of this belief, when they do market research for social media, they may only collect enough information to confirm their own bias—even if their competitors are statistically better at social media. However, if they were to rely on all the data available, they could eliminate this bias.

Update your analysis regularly

A competitive analysis report represents a snapshot of the market landscape as it currently stands. This report can help you gain enough information to make changes to your company, but you shouldn’t refer to the document again unless you update the information regularly. Market trends are always changing, and although it’s tedious to update your report, doing so will ensure you get accurate insight into your competitors at all times. 

Boost your marketing strategy with competitive analysis

Learning your competitors’ strengths and weaknesses will make you a better marketer. If you don’t know the competition you’re up against, you can’t beat them. Using competitive analysis can boost your marketing strategy and allow you to capture your target audience faster.

Competitive analysis must lead to action, which means following up on your findings with clear business goals and a strong business plan. Once you do your competitive analysis, you can use the templates below to put your plan into action.

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How to Write the Competitor Analysis Section of the Business Plan

Writing The Business Plan: Section 4

Susan Ward wrote about small businesses for The Balance for 18 years. She has run an IT consulting firm and designed and presented courses on how to promote small businesses.

The competitor analysis section can be the most difficult section to compile when writing a business plan because before you can analyze your competitors, you have to investigate them. Here's how to write the competitor analysis section of the business plan.

First, Find Out Who Your Competitors Are

If you're planning to start a small business that's going to operate locally, chances are you already know which businesses you're going to be competing with. But if not, you can easily find out by doing an internet search for local businesses, looking in the online or printed local phone book, or even driving around the target market area. 

Your local business may also have non-local competitors that you need to be aware of.

If you're selling office supplies, for instance, you may also have to compete with big-box retailers within a driving distance of several hours and companies that offer office supplies online. You want to make sure that you identify all your possible competitors at this stage.

Then Find Out About Them

You need to know:

• what markets or market segments your competitors serve;
• what benefits your competitors offer;
• why customers buy from them;
• as much as possible about their products and/or services, pricing, and promotion.

Gathering Information for Your Competitor Analysis

A visit is still the most obvious starting point - either to the brick and mortar store or to the company's website. Go there, once or several times, and look around. Watch how customers are treated. Check out the prices.

You can also learn a fair bit about your competitors from talking to their customers and/or clients - if you know who they are. Other good "live" sources of information about competitors include a company's vendors or suppliers and a company's employees. They may or may not be willing to talk to you, but it's worth seeking them out and asking.

And watch for trade shows that your competitors may be attending. Businesses are there to disseminate information about and sell their products or services; attending and visiting their booths can be an excellent way to find out about your competition.

You'll also want to search for the publicly available information about your competitors. Online publications, newspapers, and magazines may all have information about the company you're investigating for your competitive analysis. Press releases may be particularly useful. 

Once you've compiled the information about your competitors, you're ready to analyze it. 

Analyzing the Competition

Just listing a bunch of information about your competition in the competitor analysis section of the business plan misses the point. It's the analysis of the information that's important.

Study the information you've gathered about each of your competitors and ask yourself this question: How are you going to compete with that company?

For many small businesses, the key to competing successfully is to identify a market niche where they can capture a  specific target market  whose needs are not being met.

• Is there a particular segment of the market that your competition has overlooked?
• Is there a service that customers or clients want that your competitor does not supply? 

The goal of your competitor analysis is to identify and expand upon your competitive advantage - the benefits that your proposed business can offer the customer or client that your competition can't or won't supply.

Writing the Competitor Analysis Section

When you're writing the business plan, you'll write the competitor analysis section in the form of several paragraphs. 

The first paragraph will outline the competitive environment, telling your readers who your proposed business's competitors are, how much of the market they control and any other relevant details about the competition.

The second and following paragraphs will detail your competitive advantage, explaining why and how your company will be able to compete with these competitors and establish yourself as a successful business.

Remember; you don't have to go into exhaustive detail here, but you do need to persuade the reader of your business plan that you are knowledgeable about the competition and that you have a clear, definitive plan that will enable your new business to successfully compete.

How to Write a Competitive Analysis for Your Business Plan

11 min. read

Updated January 3, 2024

Do you know who your competitors are? If you do, have you taken the time to conduct a thorough competitor analysis?

Knowing your competitors, how they operate, and the necessary benchmarks you need to hit are crucial to positioning your business for success. Investors will also want to see an analysis of the competition in your business plan.

In this guide, we’ll explore the significance of competitive analysis and guide you through the essential steps to conduct and write your own. 

You’ll learn how to identify and evaluate competitors to better understand the opportunities and threats to your business. And you’ll be given a four-step process to describe and visualize how your business fits within the competitive landscape.

• What is a competitive analysis?

A competitive analysis is the process of gathering information about your competitors and using it to identify their strengths and weaknesses. This information can then be used to develop strategies to improve your own business and gain a competitive advantage.

• How to conduct a competitive analysis

Before you start writing about the competition, you need to conduct your analysis. Here are the steps you need to take:

1. Identify your competitors

The first step in conducting a comprehensive competitive analysis is to identify your competitors. 

Start by creating a list of both direct and indirect competitors within your industry or market segment. Direct competitors offer similar products or services, while indirect competitors solve the same problems your company does, but with different products or services.

Keep in mind that this list may change over time. It’s crucial to revisit it regularly to keep track of any new entrants or changes to your current competitors. For instance, a new competitor may enter the market, or an existing competitor may change their product offerings.

2. Analyze the market

Once you’ve identified your competitors, you need to study the overall market. 

This includes the market size , growth rate, trends, and customer preferences. Be sure that you understand the key drivers of demand, demographic and psychographic profiles of your target audience , and any potential market gaps or opportunities.

Conducting a market analysis can require a significant amount of research and data collection. Luckily, if you’re writing a business plan you’ll follow this process to complete the market analysis section . So, doing this research has value for multiple parts of your plan.

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3. Create a competitive framework

You’ll need to establish criteria for comparing your business with competitors. You want the metrics and information you choose to provide answers to specific questions. (“Do we have the same customers?” “What features are offered?” “How many customers are being served?”)

Here are some common factors to consider including: 

• Market share
• Product/service offerings or features
• Distribution channels
• Target markets
• Marketing strategies
• Customer service

4. Research your competitors

You can now begin gathering information about your competitors. Because you spent the time to explore the market and set up a comparison framework—your research will be far more focused and easier to complete.

There’s no perfect research process, so start by exploring sources such as competitor websites, social media, customer reviews, industry reports, press releases, and public financial statements. You may also want to conduct primary research by interviewing customers, suppliers, or industry experts.

You can check out our full guide on conducting market research for more specific steps.

5. Assess their strengths and weaknesses

Evaluate each competitor based on the criteria you’ve established in the competitive framework. Identify their key strengths (competitive advantages) and weaknesses (areas where they underperform).

6. Identify opportunities and threats

Based on the strengths and weaknesses of your competitors, identify opportunities (areas where you can outperform them) and threats (areas where they may outperform you) for your business. 

You can check out our full guide to conducting a SWOT analysis for more specific questions that you should ask as part of each step. 

• How to write your competitive analysis

Once you’ve done your research, it’s time to present your findings in your business plan. Here are the steps you need to take:

1. Determine who your audience is

Who you are writing a business plan for (investors, partners, employees, etc.) may require you to format your competitive analysis differently. 

For an internal business plan you’ll use with your team, the competition section should help them better understand the competition. You and your team will use it to look at comparative strengths and weaknesses to help you develop strategies to gain a competitive advantage.

For fundraising, your plan will be shared with potential investors or as part of a bank loan. In this case, you’re describing the competition to reassure your target reader. You are showing awareness and a firm understanding of the competition, and are positioned to take advantage of opportunities while avoiding the pitfalls.

2. Describe your competitive position

You need to know how your business stacks up, based on the values it offers to your chosen target market. To run this comparison, you’ll be using the same criteria from the competitive framework you completed earlier. You need to identify your competitive advantages and weaknesses, and any areas where you can improve.

The goal is positioning (setting your business up against the background of other offerings), and making that position clear to the target market. Here are a few questions to ask yourself in order to define your competitive position:

• How are you going to take advantage of your distinctive differences, in your customers’ eyes? 
• What are you doing better? 
• How do you work toward strengths and away from weaknesses?
• What do you want the world to think and say about you and how you compare to others?

3. Visualize your competitive position

There are a few different ways to present your competitive framework in your business plan. The first is a “positioning map” and the second is a “competitive matrix”. Depending on your needs, you can use one or both of these to communicate the information that you gathered during your competitive analysis:

Positioning map

The positioning map plots two product or business benefits across a horizontal and vertical axis. The furthest points of each represent opposite extremes (Hot and cold for example) that intersect in the middle. With this simple chart, you can drop your own business and the competition into the zone that best represents the combination of both factors.

I often refer to marketing expert Philip Kohler’s simple strategic positioning map of breakfast, shown here. You can easily draw your own map with any two factors of competition to see how a market stacks up.

It’s quite common to see the price on one axis and some important qualitative factor on the other, with the assumption that there should be a rough relationship between price and quality.

Competitive matrix

It’s pretty common for most business plans to also include a competitive matrix. It shows how different competitors stack up according to the factors identified in your competitive framework. 

How do you stack up against the others? Here’s what a typical competitive matrix looks like:

For the record, I’ve seen dozens of competitive matrices in plans and pitches. I’ve never seen a single one that didn’t show that this company does more of what the market wants than all others. So maybe that tells you something about credibility and how to increase it. Still, the ones I see are all in the context of seeking investment, so maybe that’s the nature of the game.

4. Explain your strategies for gaining a competitive edge

Your business plan should also explain the strategies your business will use to capitalize on the opportunities you’ve identified while mitigating any threats from competition. This may involve improving your product/service offerings, targeting underserved market segments, offering more attractive price points, focusing on better customer service, or developing innovative marketing strategies.

While you should cover these strategies in the competition section, this information should be expanded on further in other areas of your business plan. 

For example, based on your competitive analysis you show that most competitors have the same feature set. As part of your strategy, you see a few obvious ways to better serve your target market with additional product features. This information should be referenced within your products and services section to back up your problem and solution statement. 

• Why competition is a good thing

Business owners often wish that they had no competition. They think that with no competition, the entire market for their product or service will be theirs. That is simply not the case—especially for new startups that have truly innovative products and services. Here’s why:

Competition validates your idea

You know you have a good idea when other people are coming up with similar products or services. Competition validates the market and the fact that there are most likely customers for your new product. This also means that the costs of marketing and educating your market go down (see my next point).

Competition helps educate your target market

Being first-to-market can be a huge advantage. It also means that you will have to spend way more than the next player to educate customers about your new widget, your new solution to a problem, and your new approach to services. 

This is especially true for businesses that are extremely innovative. These first-to-market businesses will be facing customers that didn’t know that there was a solution to their problem . These potential customers might not even know that they have a problem that can be solved in a better way. 

If you’re a first-to-market company, you will have an uphill battle to educate consumers—an often expensive and time-consuming process. The 2nd-to-market will enjoy all the benefits of an educated marketplace without the large marketing expense.

Competition pushes you

Businesses that have little or no competition become stagnant. Customers have few alternatives to choose from, so there is no incentive to innovate. Constant competition ensures that your marketplace continues to evolve and that your product offering continues to evolve with it.

Competition forces focus & differentiation

Without competition, it’s easy to lose focus on your core business and your core customers and start expanding into areas that don’t serve your best customers. Competition forces you and your business to figure out how to be different than your competition while focusing on your customers. In the long term, competition will help you build a better business.

• What if there is no competition?

One mistake many new businesses make is thinking that just because nobody else is doing exactly what they’re doing, their business is a sure thing. If you’re struggling to find competitors, ask yourself these questions.

Is there a good reason why no one else is doing it?

The smart thing to do is ask yourself,  “Why isn’t anyone else doing it?”

It’s possible that nobody’s selling cod-liver frozen yogurt in your area because there’s simply no market for it. Ask around, talk to people, and do your market research. If you determine that you’ve got customers out there, you’re in good shape.

But that still doesn’t mean there’s no competition.

How are customers getting their needs met?

There may not be another cod-liver frozen yogurt shop within 500 miles. But maybe an online distributor sells cod-liver oil to do-it-yourselfers who make their own fro-yo at home. Or maybe your potential customers are eating frozen salmon pops right now. 

Are there any businesses that are indirect competitors?

Don’t think of competition as only other businesses that do exactly what you do. Think about what currently exists on the market that your product would displace.

It’s the difference between direct competition and indirect competition. When Henry Ford started successfully mass-producing automobiles in the U.S., he didn’t have other automakers to compete with. His competition was horse-and-buggy makers, bicycles, and railroads.

Do a competitive analysis, but don’t let it derail your planning

While it’s important that you know the competition, don’t get too caught up in the research. 

If all you do is track your competition and do endless competitive analyses, you won’t be able to come up with original ideas. You will end up looking and acting just like your competition. Instead, make a habit of NOT visiting your competition’s website, NOT going into their store, and NOT calling their sales office. 

Focus instead on how you can provide the best service possible and spend your time talking to your customers. Figure out how you can better serve the next person that walks in the door so that they become a lifetime customer, a reference, or a referral source.

If you focus too much on the competition, you will become a copycat. When that happens, it won’t matter to a customer if they walk into your store or the competition’s because you will both be the same.

See why 1.2 million entrepreneurs have written their business plans with LivePlan

Tim Berry is the founder and chairman of Palo Alto Software , a co-founder of Borland International, and a recognized expert in business planning. He has an MBA from Stanford and degrees with honors from the University of Oregon and the University of Notre Dame. Today, Tim dedicates most of his time to blogging, teaching and evangelizing for business planning.

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Blog Marketing How to Create a Competitor Analysis Report (with Examples)

How to Create a Competitor Analysis Report (with Examples)

Written by: Midori Nediger Nov 09, 2023

Your business will always have competition.

And if you don’t know what that competition is up to, you could be missing out on huge opportunities.

That’s why a competitive analysis is so crucial to your success as a business. It gives you the tools to quickly adapt to any changes in the competitive landscape and potentially capitalize on industry trends that your competitors haven’t even noticed.

So let’s get some basics out of the way…

What is a competitive analysis report?

A competitive analysis report outlines the strengths and weaknesses of your competitors compared to those of your own business.

Typically, a competitive analysis report will contain:

• A description of your business’s target market
• Details about the features of your product compared to your competitors’ products
• A breakdown of current and projected market share, sales, and revenues
• Comparisons of pricing models
• An analysis of marketing strategy and social media strategy
• A description of customer ratings of the features of each competitor

Whether you’re a startup trying to break into the marketplace , a consultant trying to get results for your client, or an established company looking to cement your foothold against the competition, a well-researched competitive analysis gives you the tools you need to make strategic decisions.

Your competitive analysis should inform your marketing plan , your business plan , your consultant report and every part of your high-level business strategy.

But how do you actually create a competitive analysis report?

How to make competitor analysis report :

• Start with a competitor overview
• Conduct market research to uncover customer personas and industry trends
• Compare product features in a feature comparison matrix
• Summarize your strengths and weaknesses with a SWOT analysis
• Show where you fit in the competitive landscape
• Use a competitor analysis template for a professional look and feel

The level of detail you include in each section of your competitive analysis report will vary depending on the stage of your business growth and your goals. For example, a startup might create a report that focuses on market research, while an established business might dive into detail on an emerging competitor.

But let’s talk about the parts of a competitive analysis that every report should include.

1. Start with a competitor overview

A strong report shows exactly what a company must out-compete to be successful.

Meaning you must audit any product or service that currently solves the problem your business is trying to solve for customers and write a quick profile for each competitor.

Like the template below, each competitor profile might include:

• The company’s revenue and market share
• The company’s size and information about their management team
• A broad description of the company’s strengths and weaknesses
• An overview of how the company is perceived by customers

This overview will help your readers get a big-picture view of the market landscape.

2. Conduct market research to uncover customer personas and industry trends

You can’t create a competitive analysis report without doing extensive market research , which is all about gathering information to understand your customers, identify opportunities to grow, and recognize trends in the industry.

This research can help you put together the customer personas that will guide business and marketing decisions down the line, and allow you to plan for any shifts that might disrupt the marketplace.

You can conduct primary market research, with:

• Customer interviews
• Online surveys or questionnaires
• In-person focus groups
• Purchasing a competitor product to study packaging and delivery experience

Or secondary market research, by:

• Reading company records
• Examining the current economic conditions
• Researching relevant technological developments

When assembling your market research you may just want provide a high-level summary of the industry trends, like this competitor analysis example shows:

Or you may want to dive into detail on the demographics of a particular consumer segment, like this:

But if you’re a consultant or advisor struggling to get buy-in from skeptical stakeholders, the report below would be ideal. Covering everything from market forecasts to consumer profiles, it can help you get clients and decision-makers on board.

3. Compare product features in a feature comparison matrix

The feature comparison is arguably the most important part of the competitive analysis. Breaking down your product and your competitors’ products feature-by-feature will allow you to see what really sets everyone apart.

In addition to specific product features, here are some attributes that you might include in a feature comparison matrix:

• Product quality
• Number of features
• Ease of use
• Customer support
• Brand/style/image

The most common format for a features analysis is a simple matrix with you and your competitors along one side and all of the relevant features along the other. You can check off or rate how you perform in each area:

But these tables can get pretty long. Another approach is to focus on the things that provide the most value to the user, like in this competitor analysis example from Mint. It only includes ease of use, costs, and benefits:

If you want to visualize your comparisons in an engaging way, you could use a comparison infographic . 

Great resources for this section of your competitive analysis report are product rating sites like Capterra and G2Crowd . They’ll give you an unbiased view of your company and your competitors.

And as with any market research, it’s critical that you speak with real people who use your product and your competitors’ products. That’s the only way to get an accurate picture of how your target customers rate the competition .

4. Summarize your strengths and weaknesses in a SWOT analysis

When you’re conducting research for your competitive analysis, it’s going to be messy. You’ll have a lot of data and it’ll be hard for an outsider to understand.

That’s what makes the SWOT analysis so essential.

A SWOT analysis is a framework for evaluating your competitive position by listing your key strengths, weaknesses, opportunities, and threats.

It can act like a short summary of the rest of your competitive analysis report for anyone who doesn’t have time to dig into the details.

Click the template above to enter our online SWOT analysis maker tool. Customize the template to your liking–no design no-how required.

Here are some questions to kickstart your SWOT analysis:

• Strengths: What are we doing really well (in terms of marketing, products, sales, branding, technology, etc.)?
• Weaknesses: What are we struggling with? What’s holding us back?
• Opportunities: What’s the weakest area for our biggest competitor? Are there any gaps in the market that aren’t current being addressed? What has recently changed in our business or the market?
• Threats: What is our biggest competitor doing much better than us? What new products/features are they working on? What problems aren’t we currently addressing?

In your report, you could arrange your SWOT analysis in a simple list, but it can be helpful to use color-coded quadrants, like the competitor analysis example below. Note how each quadrant is paired with an icon:

5. Show where you fit in the competitive landscape

After summarizing your strengths, weaknesses, opportunities, and threats, it’s time to look at the bigger picture. It’s time to figure out where every major competitor currently fits into the competitive landscape.

The most popular way of doing this is to identify the two dimensions that are most important for being competitive in your industry and plot them on a matrix, like this one from the Boston Consulting Group:

And this one from G2 Crowd (which looks at market presence and customer satisfaction):

You may want to focus on where you fit in the market landscape based on your own biggest strengths and weaknesses, or the biggest threats and opportunities you identified in the SWOT analysis.

Or, it may be enough just to summarize in words the features and benefits that set your apart from your competitors (which is a great way to end your report on a high note).

Competitor analysis examples for strategic planning

Let’s delve into some competitor analysis examples that can empower your organization to navigate the market effectively.

1. Competitor analysis example for marketing specialists

Imagine this: You are a Marketing Specialist and your goal is to establish a strong online presence and attract a diverse user base. However, you face stiff competition from established players in the market. Here are some things you should look into when doing your competitor analysis:

Competitor analysis focus:

• SEO strategies: Analyze competitors’ websites to understand their SEO strategies. Identify high-ranking keywords, backlink strategies, and content optimization techniques . Alternatively, if you’re running a local business, you might want to analyze and scrape Google Maps listings to better assess how companies are optimizing Google My Business to generate leads.
• Social media engagement: Examine competitors’ social media presence. Evaluate the type of content that garners engagement, the frequency of posts, and audience interactions.
• Online advertising: Investigate competitors’ online advertising campaigns. Are they leveraging Google Ads, social media ads, or other platforms? Assess the messaging, visuals, and targeting criteria.
• Content marketing: Scrutinize competitors’ content marketing efforts. Identify the topics that resonate with their audience, the formats they use (blogs, videos, infographics), and the platforms they prioritize.

Here’s a SWOT analysis template to help you get started:

2. Competitor analysis example for SME business development managers

Imagine this: As the business development manager for a medium sized start up, you are tasked with expanding the client base. The market is crowded with similar service providers, and differentiation is key. When doing your competitor analysis report, look into:

• Client testimonials and case studies: Explore competitors’ websites for client testimonials and case studies. Identify success stories and areas where clients express satisfaction or dissatisfaction.
• Service offerings: Analyze the range of services offered by competitors. Identify gaps in their offerings or areas where you can provide additional value to clients.
• Pricing models: Investigate competitors’ pricing structures. Are they offering packages, subscription models, or customized solutions? Determine whether there’s room for a more competitive pricing strategy .
• Partnerships and collaborations: Explore potential partnerships or collaborations that competitors have formed. This can provide insights into untapped markets or innovative service delivery methods.

Here’s a competitor analysis comparison chart template that you could use:

3. Competitor analysis example for product managers

Imagine this: You are a Product Manager for a consumer electronics company tasked with improving your company’s products and services. The market is buzzing with innovation, and staying ahead requires a deep understanding of competitor products.

• Feature comparison: Conduct a detailed feature-by-feature comparison of your product with competitors. Identify unique features that set your product apart and areas where you can enhance or differentiate.
• User experience (UX): Evaluate the user experience of competitors’ products. Analyze customer reviews, app ratings, and usability feedback to understand pain points and areas for improvement.
• Technological advancements: Investigate the technological capabilities of competitors. Are they integrating AI, IoT, or other cutting-edge technologies? Assess whether there are emerging technologies you can leverage.
• Product lifecycle management: Examine competitors’ product release cycles. Identify patterns in their product launches and assess whether there are opportunities for strategic timing or gap exploitation.

To help you get started, use this competitive analysis report template to identify the strengths, weaknesses, opportunities and threats of the product or service

How to present a competitor analysis

Presenting a competitor analysis effectively involves organizing and communicating information about your competitors in a clear and concise manner. Here’s a step-by-step guide on how to present a competitor analysis:

• Introduction: Start with a brief introduction to set the stage. Outline the purpose of the competitor analysis and its significance in the current market context.
• Competitor identification: Clearly list and identify the main competitors. Include both direct and indirect competitors. Briefly describe each competitor’s core business and market presence.
• Key metrics and performance: Present key metrics and performance indicators for each competitor. This may include market share, revenue, growth rate, and any other relevant quantitative data.
• SWOT analysis: Conduct a concise SWOT analysis for each competitor. Summarize their strengths, weaknesses, opportunities, and threats. Use a simple visual representation if possible.
• Market positioning: Discuss how each competitor is positioned in the market. This could include their target audience, unique selling propositions, and any specific market niches they occupy. Also, focus on finding keywords , as your competitor’s targeted keywords are the main source of information on their online market performance.
• Strategic moves: Highlight recent strategic moves made by your competitors. This could include product launches, partnerships, mergers, acquisitions, or changes in pricing strategy. Discuss how these moves impact the competitive landscape.
• Recommendations and implications: Based on the analysis, provide recommendations and implications for your company. Identify opportunities to capitalize on competitors’ weaknesses and outline potential threats that need to be addressed. Discuss any adjustments to your own strategy that may be necessary in response to the competitive landscape.

3 tips to improve your competitive analysis report design

How you design your competitive analysis report can have a significant impact on your business success. The right report design can inspire stakeholders to take action based on your findings, while a mediocre design may reflect poorly on your hard work.

Here are a few report design best practices to keep in mind when designing your competitive analysis report:

• Start with a competitive analysis report template
• Keep core design elements like colors and fonts consistent
• Use visuals to summarize important information and keep your audience engaged

1. Start with a competitor analysis template

The quickest way to lose the confidence of your stakeholders is to present a messy, amateur report design. Besides distracting from the content of the report, it might even put your credibility at risk.

Starting with a pre-designed competitor analysis template, like the one below, takes almost all of the design work out of the mix so you can focus on the content (while still impressing your stakeholders).

And if you’re a consultant competing for a project, a pre-designed template may just give you the edge you need to land that client.

Click on any of our templates; you’ll enter our online drag and drop report maker tool. No design know-how required.

2. Keep core design elements like colors and fonts consistent

If you take a look at the competitor analysis template below, you might notice that the designer has switched up the layout from page to page, but many of the other design elements are kept consistent.

That consistency helps the report design feel cohesive while making it easier for readers to quickly skim for key pieces of information.

Here are a few quick guidelines for keeping important design elements consistent:

• Use the same color scheme throughout your report (with one highlight color to draw attention to key takeaways and important numbers)
• Use the same font styles for your headers, subheaders, and body text (with no more than 2-3 font styles per report)
• Use the same style of visuals throughout your report (like flat icons or illustrated icons… but not both)

3. Use visuals to summarize important information and keep your audience engaged

The challenge with a competitive analysis report is that you collect heaps of background research, and you have to condense it into a brief report that your client will actually read.

And written summaries will only get you so far.

Visuals like charts and tables are a much better way to communicate a lot of research quickly and concisely, as seen in the market research summary below.

Even lists can be made more engaging and informative by spacing out list items and giving more emphasis to headers:

The more you can replace descriptive paragraphs and long lists with thoughtful visuals, the more your readers will thank you.

A competitive analysis will allow you to think up effective strategies to battle your competition and establish yourself in your target market.

And a report that communicates the findings of your competitive analysis will ensure stakeholders are on board and in the know.

Now that you know how to design a competitive analysis report, you’re ready to get started:

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How to Write a Competitor Analysis for a Business Plan (with AI in 2023)

Competitor analysis is a critical component of any business plan. It helps you understand the landscape of your industry, identify opportunities for growth and differentiation, and craft strategies that take advantage of your competitors' weaknesses.

Here's a step-by-step guide on how to conduct a comprehensive competitor analysis, including how to leverage AI tools like Bizway to make the process more efficient and effective.

Step-by-Step Guide to Performing a Competitor Analysis

1. identify your competitors.

Understanding your competitive landscape begins with pinpointing who your direct and indirect competitors are.

Points to Consider

• Direct Competitors : Those who offer similar products/services in the same market.
• Indirect Competitors : Businesses targeting your customer base with different offerings.
• Utilize market research and customer feedback to list competitors.
• Identify geographical considerations - local, regional, or global competitors.

2. Analyze Their Products/Services

A thorough examination of competitors’ offerings unveils potential areas for differentiation and enhancement in your product/service line.

• Feature comparisons.
• Pricing structures.
• Unique Selling Propositions (USPs).
• Adopt a customer-centric approach to understand how consumers perceive competitors’ offerings.
• Identify gaps in their product/service lines that you could explore.

3. Assess Their Marketing Strategy

Understanding competitors’ marketing approaches aids in crafting a superior, data-driven marketing strategy.

• Target audience.
• Key messages and value propositions.
• Channel effectiveness and presence.
• Use social listening tools to gauge their social media effectiveness.
• Analyze the SEO performance of competitors’ websites.

4. Examine Their Sales Strategy

Investigating sales channels and tactics employed by competitors reveals market penetration strategies and potential areas for diversification.

• Distribution channels.
• Pricing and sales tactics.
• Customer relationship management.
• Secret shop to observe sales tactics and customer experiences.
• Review customer feedback on their purchasing experience.

5. Analyze Their Strengths and Weaknesses

Identifying what competitors excel in and fall short on enables strategic decision-making in exploiting market opportunities.

• Operational efficiency.
• Customer service quality.
• Brand reputation and loyalty.
• Conduct a SWOT analysis (Strengths, Weaknesses, Opportunities, Threats) for each competitor.
• Leverage customer reviews and testimonials to gauge reputation.

Using AI for Competitor Analysis

Automated data collection.

AI automates the harvesting of data from myriad sources, ensuring robust research while saving time.

• Use AI tools to scrape and aggregate data from competitors' websites, social media, and customer review platforms.
• Ensure the data is categorized and stored systematically for easy analysis.

Real-Time Updates

AI provides a competitive edge by monitoring and reporting real-time updates on competitor activities.

• Set up AI monitoring for specific competitor activity: product launches, PR releases, or marketing campaigns.
• Ensure to leverage real-time data to inform swift strategic adjustments.

Predictive Analytics

Predictive analytics via AI deciphers patterns and anticipates future competitor moves, positioning your business proactively.

• Leverage AI to analyze historical data for predicting future trends.
• Utilize these insights to anticipate and formulate preemptive strategies.

Using Bizway for Competitor Analysis and Business Planning

One such AI tool that can revolutionize your competitor analysis process is Bizway . Bizway is an AI-powered business planning and research app that can help you research your competitors and write your entire competitor analysis with just a few clicks. Moreover, Bizway can assist you in writing your entire business plan, saving you time and providing you with expert-level planning documents.

With Bizway, you can automate the process of generating clear, concise planning docs across all areas of business, from an SEO Content Plan to User Onboarding Plan. It also helps fill knowledge gaps in areas of business you're not well-versed in.

So, whether you're a solopreneur, a small business owner, or an aspiring entrepreneur still in school, Bizway is the AI assistant you need to take your business planning to the next level.

Gerrard + Bizway AI Assistant

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What is competitive analysis? Template, examples, and how-to

In this comprehensive guide, we’ll define what a competitive analysis is, describe the benefits product teams stand to gain from conducting one, and walk through the steps of how to do a competitive analysis.

Through the tutorial, we’ll refer to examples to demonstrate how each step of a competitive analysis works in practice. We’ll also provide a list of customizable, free competitive analysis templates for you to use when completing these steps on your own.

Complete guide to competitive analysis

Picture this: you just came up with the next disruptive, game changing, AI-powered e-commerce marketplace. The objective is to connect buyers with sellers to fulfill their tailored and customized product needs.

You’re confident your product will take on Etsy and other big players in the market. You did some market and user research and have a good idea of your ideal customer and their (underserved) needs. Based on this data, you believe your marketplace can reach product-market fit quickly.

It’s now time for you to dust off your copy of Sun Tzu’s  T he Art of War . Why is that, you ask?

The Art of War is an ancient Chinese military textbook that, although dated somewhere between ~500–400 B.C., is one of the most influential management books out there to this day. It provides great strategic and tactical advice. Moreover, it provides guidance to help you assess yourself and your competition to gain an advantage.

Maintaining a competitive advantage is the goal. Even if you have the best product in the world and you know there is a market for it, if you don’t understand your competition, you‘re bound to fail. That’s why you need to perform a competitive analysis.

As the band Rage Against the Machine would say, know your enemy .

What is competitive analysis?

Competitive analysis (sometimes called a competitor analysis or competition analysis) is exactly what it sounds like: a structured approach to identifying and analyzing your competitors. More concretely, it’s an assessment of your competition’s offerings, strategy, strengths, and weaknesses.

A competitive analysis helps you answer questions such as:

• Which other companies are providing a solution similar to ours?
• What are the ideal customer’s minimum expectations?
• What are they currently not getting from our product with regard to those expectations?
• What barriers do competitors in the market fce?
• What should we avoid introducing in our product?
• What price are customers willing to pay for our product?
• What value do we need to provide to make our product stand out in the market?
• What trends are happening and how might they change the playing field?

When conducted thoroughly and regularly, a competitive analysis provides you with tons of information that can be used to improve and optimize your product. The end result is a holistic overview of your competitor landscape.

Why do a competitive analysis?

Competitive analysis is a fundamental product management instrument. It helps PMs learn what works and what doesn’t when trying to acquire market share, identify market trends, and locate gaps in their product offering.

Competitive analysis exists to help you avoid making mistakes and empower you to beat competitors to the punch in the pursuit of product growth and success.

Knowing your competition will bring you great rewards. Conducting a competitive analysis will help you more effectively:

• Create benchmarks
• Identify opportunities to better serve customers
• Make strategic decisions
• Determine your pricing strategy
• Identify market gaps
• Determine distribution and marketing strategies

Typically, the first time you create a competitor analysis is when doing your market research. This helps you get an idea of the product-market fit , which will evolve along your journey.

As a product manager, your role is not to analyze how well your competitors are able to showcase themselves. It is your job to make the product what the customer needs it to be. Understanding your competitor’s capabilities, pricing, and product positioning helps you in this.

Keep in mind that your competitors will likely showcase themselves to appear better than they probably are. You’ll be able to acquire tons of information about them, but you should take that information with a pinch of salt.

How to do a competitive analysis

There is no a single way to do a competitive analysis. In general, a competitive analysis is made up of three fundamental components:

• A shortlist of competitors
• A competitor deep dive
• A holistic overview and strategy

To demonstrate how to do a competitor analysis, we’ll refer back to the example outlined in the introduction.

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Remember, in our example, we’re looking to disrupt the market with an AI-powered e-commerce marketplace app that helps buyers and sellers connect to fulfill highly customized orders. Let’s call our innovative new product AGORA.

1. Create a shortlist of your competitors

There are three types of competitors:

• Direct — Competitors that offer the same product and target the same ideal customer; you are battling direct competitors heads-on
• Indirect — Competitors that either offer a somewhat similar product or target the same ideal customer
• Replacement — Competitors that offer a different product but target the same ideal customer

For a competitive analysis, you need to identify at least your direct and indirect competitors. So how do you do that? By looking inward and researching obsessively .

Look inward

To figure out who your direct and indirect competitors are, you need to look inward first to understand your product positioning: who are you servicing and what is the offering you are providing?

You can answer these questions by doing a self-assessment using the product canvas . Originally introduced by Roman Pichler, the product canvas has since tbeen tweaked and refined.

In its core, the product canvas covers:

• The name of the product
• Objectives and key metrics for success
• The ideal customer
• A high-level overview of what’s required to meet the customer’s needs
• Just enough product details about short-term goals

For our example product, the competitive analysis might look something like this:

Research obsessively

A simple Google search using keywords from your self-assessment can get you pretty far. Other resources that can help you identify your competitors include tools such as Crunchbase, Similarweb, Statista, etc.

As the old saying goes, the customer knows best. If you don’t have many customers yet, review sites such G2, Capterra, Trustpilot, and Google Reviews can help you.

If you do have customers, go ask them. Most customers try and evaluate several products before deciding on the right product to buy. Nothing is stopping you from asking them which other brands they considered and why they ultimately chose yours.

Once you have established who your competitors are, you might find yourself in a market with many direct and indirect competitors. If that is the case, select about seven of the most relevant competitors to include in your competitor deep dive.

2. Do a deep dive on each competitor

From your a shortlist of competitors, choose about seven of your most important and dig up all the relevant information on each one.

The research conducted during the previous step will help you capture the most relevant information about your competitors for the following categories:

Company profile

Ideal customer profile, product information, market approach, swot analysis.

Start by creating a company profile for each of your competitors to gain a better understanding of who they are. Include the following information:

• Name   —  What is the name of your competitor?
• Founding date  —  When was the company founded? How long has it been in the market?
• Company size  —  How many employees does the company have? Are they equipped to service the market and innovate?
• Market share  — The portion of the market controlled by the competitor’s product
• Revenue   —  The income the competitor generates from its product
• Reputation   —  What do customers think of your competitor’s product on a scale from one to five?

Let’s apply this framework to our AGORA competitive analysis example:

It’s important to understand who your competitors are serving and who is buying the product. This not only to reconfirm that the competitor is indeed a direct (or indirect) competitor, but also to understand what customers like and dislike about the competitor’s product.

The information you’re looking for includes:

• Ideal customer   —  Who is the competitor’s target customer and what defines them?
• Motivations   —  What does the customer enjoy about your competitor’s product?
• Frustrations   —  What does the customer hate about the product?
• Primary buyer  —  Who is the primary buyer of the product? Is it the as the ideal customer, or is it a different persona?

Let’s see what this would look like following our AGORA example. Below is an example ideal customer profile for Etsy. First, for the buyer:

And the ideal customer profile for Etsy sellers:

Not to be captain obvious, but you want to capture more details about the product your competitor is offering and its positioning.

The information we’re looking for at this step includes:

• The product   —  What is the tagline your competitor is using to market its product?
• Positioning   —  Based on the quality and price of the product, place the product into a one of several buckets. For example, Economy (low quality, low price), Skimming (low quality, high price), Penetration (high quality, low price), and Premium (high quality, high price)
• Product features   —  What are the key features being marketed and promoted?

Referring to our example AGORA app, the product information associated with Etsy on a competitor analysis might look as follows:

Next, seek to understand how your competitors are bringing the product to market .

List the following information:

• Pricing — What does the product costs? If there is a tiered pricing model, what does it look like?
• Distribution channels — Through which channels is your competitor selling the product?
• Marketing channels — Through which channels is the product being promoted?

In our AGORA competitor analysis example, this section would look something like:

With all the information you’ve collected, you’ll find yourself in a good place to do a SWOT analysis . This is one of the most common and popular competitive analysis frameworks.

SWOT stands for strengths, weaknesses, opportunities, and threats:

• Strengths  —  What is going well for the competitor?
• Weaknesses   —  What is not going well? What obvious flaws are there?
• Opportunities   —  What could give your competitor an advantage?
• Threats  —  What might harm your competitor’s product?

For AGORA, our example competitive analysis might include a SWOT analysis that looks like this:

3. Develop a holistic overview and strategy

Now that you have a better view of your competitors, it’s time to determine how you want to approach them in the market: do you want to avoid your competitors or attack them?

Two extremely useful tools that can help you make this assessment are the competitive matrix and battle cards .

Competitive matrix

One way to operationalize the data you gathered during your competitive analysis is to plot out a four-quadrant competitive matrix.

Define key factors for the and x and y axes and plot yourself and your competition accordingly to see how you stack up. This approach is also known as perceptual mapping.

A competitive matrix for our example would look like this:

Battle cards

You can use the four-quadrant competitive matrix and competitor insights to create battle cards for each of your competitors.

Battle cards are a visual aid that help you compare your product against those of your competitors at a glance. It’s a quick and easy way to see how you stack up in key areas of performance and value. It’s also a neat way to help sales in their conversations with customers.

Here’s what you should include on each battle card:

• Company name — Name of your competitor
• Powers  —  What makes this competitor stand out from the rest?
• How we win   —  What should we do to gain a competitive advantage over this competitor?
• Why we lose   —  What is this competitor better at? What should we avoid so we don’t lose market share?
• Pricing   —  How much of a threat is the competitor’s product to our market share (low, medium, or high)?
• Strategy   — Should we attack or avoid this competitor?

A battle card for our example competitive analysis might look as follows:

Alternative competitive analysis frameworks

If you‘ve followed the framework described above, you should have solid insight into your competitors, your product opportunities, and the best strategy to attack or avoid your competitors in the market.

If you want to dig deeper, you can follow up your competitive analysis by producing a Five Forces analysis and/or customer journey map .

The Five Forces model

You still might want to consider gaining more insights into the competitive structure of the market you are in — in other words, gain a better understanding of how easy it is to either enter or be replaced by a competitor in the market.

A great framework to use for this type of competitor analysis is the Five Forces model , originally conceived by Michael Porter.

According to the Five Forces model, you can assess the market you are in by looking at:

• Intensity of competitive rivalry
• Negotiation power of new buyers
• Negotiation power of suppliers
• Threat of new entrants
• Threat of substitutes

Customer journey map

Instead of zooming out, you can also zoom in on the journey ideal customers make when interacting with the product itself, the distribution, or marketing channels.

On a journey map, your touchpoints are the customer, the activity performed, how the customer experiences the activities, and their expectations.

Free competitive analysis templates

A competitive analysis is a continuously updated document packed with information about your most important competitors to help you determine how to approach them in your target market.

The competitive analysis model described in this article consists of three steps that are designed to produce the insights you need to rule the market once and for all.

Below are free, customizable competitive analysis templates for each step of the process described in this article:

• Competitive analysis template
• Product canvas template
• Competitive matrix template
• Battle card template
• Customer journey map template

NOTE : To use and customize the competitive analysis templates above, after opening, select File > Make a copy from the main menu.

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How to Write a Competitor Analysis for a Business Plan

April 28, 2023

Adam Hoeksema

A competitor analysis for your business plan can be an incredibly important part of the business planning process.  By trying to learn as much as you can about your competitors, you can learn a lot about what to expect in your own business.  You can also identify how you can differentiate your business and gain a competitive advantage.  

In this article I plan to walk through the following:

• What to Include in a Competitor Analysis

How to Find Data on Competitors

Finding competitor data for online businesses, finding competitor data for physical retail businesses, competitor analysis business plan example.

With that as our road map, let’s dive in. 

What is Included in a Business Plan Competitor Analysis

A competitor analysis should include the following components:

Market Overview

• Key Competitors

Competitor Profiles

Competitive positioning, target market, opportunities and threats.

• Conclusions and Strategic Recommendations

Begin with a brief overview of the market or industry you operate in, outlining its size, growth trends, and key segments. This will provide context for the competitive analysis and help you understand the market dynamics.  You can often find some great industry trend data from sources like IBISworld . 

Key Competitors 

Make a list of your main competitors, which may include direct and indirect competitors. Direct competitors offer similar products or services, while indirect competitors offer alternatives or substitutes that could fulfill the same customer needs.  

One major turn off for investors and lenders is to say that you have “no competitors.”  You always have competitors.  If you are opening a coffee shop in your town that doesn’t have a coffee shop, your competitor might be the coffee at the local gas station, or coffee made at home.  

For each key competitor, provide a detailed profile that includes:

• Company background: Briefly describe their history, mission, and size.
• Market share: Estimate their share of the market compared to yours (if you haven’t started yet you won’t have any market share yet) and other competitors.
• Product or service offerings: Describe their products or services and how they compare to yours.
• Pricing strategy: Analyze their pricing model and compare it to your own.
• Distribution channels: Identify the channels they use to distribute their products or services, such as online, retail stores, or partnerships.
• Marketing and promotional strategies: Analyze their marketing efforts, including advertising, social media, and public relations.
• Strengths and weaknesses: Identify their competitive advantages and disadvantages in comparison to your business.

Assess your company's competitive positioning by comparing your strengths, weaknesses, opportunities, and threats (SWOT analysis) to those of your competitors. Highlight what makes you unique and areas where you can gain a competitive advantage.

Describe your target market and how it differs from your competitors'. Understanding the market segments that your competitors serve will help you better define your own target audience and tailor your marketing strategies accordingly.

Based on your competitor analysis, identify potential opportunities to exploit in the market and threats that your competitors may pose to your business. This can help you develop proactive strategies to mitigate risks and capitalize on growth opportunities.

Conclusion and Strategic Recommendations

Summarize your findings and provide recommendations for how your business can differentiate itself, address competitive challenges, and gain market share. This may include recommendations for product or service development, pricing, marketing strategies, or strategic partnerships.

So one of your initial questions should be where in the world do you find reliable data on your competitors, it's not like you can call them and just ask them for their financial statements and customer database!  

Depending on whether your business is primarily online or a physical location, the approach and tools that I use to do competitive research will differ.  I am going to show you examples of the type of research that I like to do and the data that I am able to pull from a couple of tools that we like to utilize. 

There are a few data points that I like to find for online competitors.  I want to know:

• How much organic traffic is my competitor's website getting?
• How much paid traffic is my competitor’s website getting? 
• How much search volume is there for keywords that I want to compete for?
• How much would I have to pay per click for keywords that I want to rank for?

In order to find this data I use two tools.  

• Google Adwords Keyword Planner

Let me show you how I use both tools to gather data on my competitors.

How to Use Ahrefs for Competitor Analysis

Let’s assume I am working on a business plan for a gym in Indianapolis.  I would start by looking at the search volume for “Indianapolis Gyms” which would give me some idea of the number of people searching for this each month.  You can see below that there are 250 monthly searches for this keyword according to Ahrefs. 

Next, I would look to see which gym is top ranked for that keyword and in this example I found a Lifetime Fitness .  Now I can take that keyword and run it through the Ahrefs Site Explorer and I can now see how much website traffic that particular competitor is getting each month.  This particular website is getting about 800 organic website visitors per month. 

Ahrefs can also estimate how much paid traffic a particular website is receiving each month as well.  

If you want to see exactly how I use the Ahrefs tool, check out the short video below:

Watch:  I recorded a demo of using Ahrefs for competitor analysis here. 

How to Use Google Adwords Keyword Planner for Market Research

I also like to use Google Adwords Keyword Planner to gather some additional data about my market.  So again, if I search for “Indianapolis Gyms” I can see Google’s estimate of traffic per month as well as seasonal trends in search volume.  I can also see the average cost per click that advertisers are paying for that keyword.  

As you can see, the cost per click ranges from $1.32 to $5.29 for advertisers right now.  If you can see how much paid traffic your competitor is getting on Ahrefs and you know the average cost per click for relevant keywords from Google Keyword Planner, you can back into a rough estimate of how much your competitor is spending on advertising per month.  I think this can be useful as well.  

One other thing you might notice is that Ahrefs seems to have conservative search volume estimates compared to Google Keyword Planner. We saw 250 monthly searches from Ahrefs and 2,400 from Google Keyword Planner.  This should give you some range of how big your market might be. 

If your competition is not an online business, or doesn’t really have much of an online presence, then finding foot traffic data is going to be much more useful for you in your competitor analysis. 

We have partnered with a company called Advan Research to be able to pull foot traffic data reports from their platform. 

Here is some of the really cool data that we can get and how you might use it in your competitor research. 

Monthly Foot Traffic Data

You can pull monthly foot traffic data for your competitors.  This foot traffic data is based on cell phone GPS data and can provide some great insight on potential customer traffic you might expect.  For example, in the graph below we pulled the monthly traffic for a local Steakhouse that gets about 5,000 visitors per month. 

Daily and Hourly Foot Traffic Data

You can pull foot traffic data for a location by the day and the hour to get an idea of what days and hours are busiest for your competitors and likely to be busiest for you.  

Customer Location Data

One of the most powerful data reports you can pull on a competitor is a heat map of where their customers are coming from.  If you notice that customers are traveling a long distance to your competitor, you could look at finding a location that is closer to a large segment of your competitors' customers. 

Annual Revenue Estimate and Revenue per Square Foot Data

Finally, for larger businesses or publicly traded companies, Advan can provide you with estimates of their annual revenue, revenue per square foot and how many square feet they are renting for their business.  Talk about some serious competitor intelligence that can set you ahead and impress your investors and lenders. 

The following is an example of a competitor analysis for a restaurant business plan which you can adapt to your own business.  I would also recommend that you incorporate data from Ahrefs, Google Adwords Keyword Planner and our Foot Traffic Data Report into this section of your business plan.  The idea here is to get a good understanding of where the competitors stand and to identify your place in the market. 

I. Competitor Analysis

The purpose of this section is to identify and evaluate the main competitors in the local Italian restaurant industry and to determine our competitive positioning. Understanding the competitive landscape will help us to develop effective strategies that enable us to compete effectively in the market, differentiate ourselves, and carve out a sustainable market share. Our analysis will focus on the following key areas

A. Market Overview

The local Italian restaurant market is valued at approximately $X million and is expected to grow at a CAGR of X% over the next five years. The industry is characterized by the presence of several well-established Italian restaurants, popular chain restaurants, and a few emerging independent restaurants. The primary segments within the industry are fine dining, casual dining, and fast-casual dining.

B. Key Competitors

Competitor A (Fine Dining Italian Restaurant)

Market Share : X%

Strengths: High-quality ingredients, exceptional culinary skills, elegant ambiance, and strong brand recognition.

Weaknesses: High pricing, limited menu offerings, and a focus on a specific customer segment (high-income individuals).

Competitor B (Casual Dining Italian Restaurant)

Market Share: X%

Strengths: Wide variety of Italian dishes, family-friendly atmosphere, and strong customer loyalty.

Weaknesses: Inconsistent food quality, slow service during peak hours, and limited menu innovation.

Competitor C (Fast-Casual Italian Restaurant)

Strengths: Quick service, affordable pricing, and convenient locations.

Weaknesses: Limited menu variety, lack of authentic Italian flavors, and a focus on takeout and delivery over dine-in experiences.

C. Competitive Positioning

Based on our analysis, our competitive positioning is as follows:

Unique Value Proposition: Our primary differentiation lies in our commitment to providing authentic Italian cuisine using high-quality, locally-sourced ingredients, combined with exceptional customer service in a warm and inviting atmosphere. This will enable us to attract customers seeking a genuine Italian dining experience that sets us apart from competitors.

Competitive Pricing: Our pricing strategy is to offer value for money while maintaining profitability. By carefully selecting our suppliers and managing our costs, we will be able to offer a competitively priced menu without compromising on quality.

Target Market: We will cater to a broad range of customers, including families, couples, and groups of friends, by offering a versatile menu that appeals to various tastes and preferences. Our focus will be on attracting local patrons and tourists alike, who are looking for an authentic and memorable Italian dining experience.

Marketing and Promotion: We will invest in both traditional and digital marketing strategies to create brand awareness and drive customer traffic. This will include targeted social media campaigns, local newspaper advertisements, participation in local food festivals, and collaboration with local businesses and organizations.

I hope this has been helpful in giving you some ideas on how to gather relevant competitor research so that you can make informed decisions about where you locate and start your business. 

If you are interested in our Foot Traffic Data Report to help provide the data for your competitor analysis or other sections of your business plan, please don’t hesitate to contact us.  

About the Author

Adam is the Co-founder of ProjectionHub which helps entrepreneurs create financial projections for potential investors, lenders and internal business planning. Since 2012, over 50,000 entrepreneurs from around the world have used ProjectionHub to help create financial projections.

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How to Write a Market Analysis for a Business Plan

After giving the reader a good idea of the important trends and paradigm shifts in the industry, you will need to specifically point out your major competitors This means factoring in on not just your direct competition, but the indirect competition as well.

One very important aspect of business that every business owner must deal with is competition. It is a fact every business has competition regardless of how small or large it is. The way you decide to handle competition in your business can make the difference between profit and loss; and between you staying in the race or you getting kicked out.

This is why it is very necessary for every entrepreneur to have plans on how to deal with competition and competitors when starting a business.

It is for this reason that business plans have sections for competitor and competitive analysis. This section of your business plan is devoted to analyzing your competition, and not just your current competition, but also potential competitors who would enter your market at one point or the other.

What is Competitor Analysis?

A competitor analysis is an assessment of the strengths and weaknesses of your businesses’ competitors. Carrying out competitor and competitive analysis would help you identify your competitors and see how they would influence your revenue.

A comprehensive analysis of your competitors will also allow you to track how your business compares with that of your competitors in terms of financial resources, staff, products or services, market share, pricing, customers, financial data, brand recognition, location, marketing tactics, logistics etc.

Including a competitor analysis in your business plan tells investors that you know what you are getting into, that you understand your marketplace and that you have plans in place to compete at the same level as established competitors. This can actually up your chances of getting startup capital.

Why Should You Include a Competitive and Competitor Analysis in your Business Plan?

• It can help you understand the competitive advantages and disadvantages in your industry
• It would help you gain insight into your competitors’ business strategies
• It would help you develop strategies to achieve in the future
• It can assist your management with developing well-tailored
• It can help you identify opportunities in the market that are under-served
• It can help you take advantage of competitors’ weaknesses to grow your market share
• It can help you in forecasting future investments

4 Types of Competitors your Business Would Be Up Against

Every business has different types of competitors that it should be wary of and they typically include;

a. Direct Competitors: These are competitors that provide exactly the same products or service that you are providing. No matter what business line you are into, direct competitors are usually your main competitors. For instance, if you want to establish a business that retails cosmetics, other cosmetic shops around your vicinity are your direct competitors.

b. Indirect competitors : these are businesses that offer products and services that are close substitutes, and as well target the same group of customers with the goal of satisfying the same need. For instance, a cosmetic shop competes indirectly with a hair salon or spa.

c. Occasional Competitors: these are competitors that provide services or products which differ slightly to yours or they are situated in a different location.

d. Future competitors: these are existing companies that are not yet in the market-space that you intend to occupy but could move there at any time. For instance, a spa is not in direct competition with a cosmetic shop, but it has every tendency of offering its clients cosmetics in the near future.

9 Steps to Conducting Competitive and Competitor Analysis

Conducting an effective and efficient competitor analysis takes procedures that may include;

Identify your Competitors

The first step in conducting a competitor analysis is to identify your competitors. You can start this by considering the range of competition in your market-space because not all competition are the same, and there are different types of competitors your business will face. Your main competitors are companies that customers can easily buy from instead of from you and they represent your most intense competition.

When conducting a competitor or competitive analysis, your first port of call is to identify each of your competitors; in fact, you need to profile them. If you plan on opening an antique store, your competitors would be any store that sells antiques, crafts, jewelry etc within your location.

Online stores should also be included if you plan to take your wares online. You may also want to include information on companies that may be entering your market in the coming year or subsequently. You equally have to look at their aims and objectives, the market share they occupy and what they aim to achieve in the now and the near future.

Identify their strengths and weaknesses

Once you have identified your competitors, you then have to find out that makes them tick. This can be identified as their strengths. For a business, their strengths can be their price range, service or product, convenience, extensive inventory etc.

These areas are what can help them to edge you out of the market, so you really have to take note of them when writing your competitor analysis. Another thing of importance to note here is their weaknesses; what makes them not to sell as much as they should.

These are areas you should aim to capitalize on to grow your business and gain market share. This maybe their poor publicity strategies, limited products range, etc. To obtain most of this information, you can go through their websites and marketing materials.

Most of the information you need about products, services, prices, and company objectives should be readily available there. If that information is not available, then you may have identified a weakness. In addition to visiting their website, you have to as well visit their offline locations to see things for yourself.

Target Market

This is a section where you zero in on your competitors target market. First of all, a businesses’ primary target market is the group of customers that they service the most. Identify who your target market is and then do some research on your competitors to see who their target market is. A good place to start would be their website and marketing communications.

Market Share

Market share can be defined as the percentage of the market you account for. You have already identified your target market, now it is time to calculate your market share based on your competitors. You have to make a complete analysis of your market share to know which sections you have to devote most of your time, energy and finances to.

Marketing Strategies

In this section of the template, you have to fill in your marketing strategies and predict those of your competitors. If you are not familiar with what they are doing, do some research and observe what strategies they are using. A good place to start looking is their advertising campaigns and promotional materials. The goal here is to try and predict what they might have planned for the future and how that will affect you.

How a company advertises creates a great opportunity to uncover the objectives and strategies of that business. Advertising should help you quickly determine how a company positions itself, who it markets to, and what strategies it employs to reach potential customers.

Carry out Product/Service Profiling

Your product and/or service offering include your range of products and services. This section of the competitor analysis template involves comparing your offerings to those of your competitor. It is important here to take a look at your product range, product quality and brand credibility.

Here, you need to evaluate your products and services for strengths and weaknesses; in fact you can conduct a full SWOT analysis on your products or services, and if you like, put them in a scale from 1 to 10.

It is much easier to find information on public companies than private companies, but it’s always a good idea to do as much background research as possible. When discussing each of your competitors, you will want to use the SWOT Analysis. Here’s what it stands for:

SWOT Analysis

• S – Strengths : What do they have going for them? Is it their technology, brand, people, or lean value chain ?
• W – Weakness : What are they missing out on? Do they lack experienced management, reliable customer service, or customer retention tactics ?
• O – Opportunities : What are they positioned to take advantage of? Are their environmental, technological, or other trends or changes they are likely to benefit from ?
• T – Threat : What gives them sleepless nights? What are they always worried about ?

Do the same for your competitors’ products or services and you would get to see the difference. This would help you know which product or service is likely to get more market share and why. This section gives you the opportunity to identify new viable markets that can be exploited with a new product, or make product or service variations to fill a gap in an existing market.

Pricing and Costs

Pricing can tell a lot about your competitors. Here you want to be looking at what pricing strategies you and your competitors are implementing. You have to find out if they are low-cost or high-cost providers, what are their mark-ups, does their business require volume sales or once off purchases?

These and other questions would help you determine the price range of your competitors and use it to compare your own. Again, pricing is an observable source so you should be able to get most of the answers by looking at your competitors offerings.

Market Outlook

Here, you need to ask yourself a few questions. What is the market for your company’s product like? Is it growing? If so, then you may not have issues with your competitors as regards customers. If on the other hand the market is flat, then the competition for customers is likely going to be fierce.

Your company may find itself scrambling to win market share. By the time you have done most of your research, you will have enough information to determine what the outlook really is.

Competitive Advantage

Next, find out what makes each of your outlined competitors unique. Their competitive advantage is what would help them outperform you and other businesses offering the same kind of product or service. You need to determine what they offer that the other businesses on the list don’t, and why some customers pick them over you or your other competitors. This is a very important aspect of your competitor analysis so you have to take your time on it.

Next, you will discuss what makes your offer distinct from others in the marketplace. These variables are your “ unique selling points, ” “ value propositions ,” or “ competitive strategy. ” The following questions will help you craft this part perfectly:

• Can you scale your operations in order to offer lower prices than majority of the players in an effort to maximize profits?
• Does your business offer something distinct from those of the current cost leaders in your industry?
• What is your niche or specific target market ?

Finally, it is important you bear in mind that your product or service will have a competitive advantage if it meets the following conditions:

• Satisfies a previously undiscovered need, or comes as a first-of-its-kind solution to an existing need
• Solves problems faster than other offers available
• Spots a better design that stands out from others
• Comes at a lower price than other offers
• Helps customers save money
• Helps customers reduce risk
• Taps into a previously under served or never served market
• Offers greater ease of use than other offers

In conclusion ,

As an entrepreneur, your competitor should not be seen as a threat but as a source of inspiration and a reference point that will enable you establish a stronger product or service base. Analyzing of your competitors can help you keep your finger on the pulse of what is happening in the industry, thus preventing you from taking any unnecessary risks.

A quick and easy way to compare your product or service with similar ones on the market is to make a competition grid. Get a piece of paper and write out the names of four or five products or services that compete with yours. To help you generate this list, think of what your customers would buy if they didn’t buy your product or utilize your service.

Across the top of the paper, list the main features and characteristics of each product or service. Include such things as target market, price, size, method of distribution, and extent of customer service. For a service, list prospective buyers, where the service is available, price, website, toll-free phone number, and other features that are relevant.

A glance at the competition grid will help you see where your product fits in the overall market. Bear in mind that you don’t need to be perfect, offer the lowest prices or provide an extremely efficient service. The most important thing is just to be slightly better than your competitors.

More on Business Plans

Mastering Competitive Analysis in Business Plan

6 minutes read

In an ever-competitive business world where agility and innovation reign supreme, understanding the landscape in which your business operates is more than a mere advantage - it's a necessity. Thriving in today's dynamic environment demands a keen understanding not just of your business, but of the ecosystem within which it co-exists. This requires comprehensive awareness of who your competitors are, what they're doing, and how they're doing it. And this is precisely where competitor analysis comes into play.

In this article, you’ll know what competitive analysis is, why it is important and how to perform the analysis in a better way. Let’s dive in.

What Is Competitor Analysis

Competitor analysis is a strategic business practice that involves evaluating and understanding the strengths and weaknesses of competitors in the same industry or market. The primary goal is to gain insights into the competitive landscape, identify opportunities, and make informed decisions to improve your own business performance.

Key Aspects of Competitor Analysis in Business Plan

Competitor analysis is an essential part of any business plan, providing key insights that drive decision making and strategic planning. Understanding your competition can position your business favorably within the market and give you a competitive edge. This part highlights the critical aspects of competitor analysis you should focus on for effective business planning.

• Identification of Competitors: Recognizing who your competitors are is the first step. This includes both direct competitors offering similar products or services and indirect competitors who may fulfill the same need in a different way.
• SWOT Analysis: Assessing the strengths, weaknesses, opportunities, and threats (SWOT) of your competitors helps in understanding their internal capabilities and external challenges. This analysis aids in developing strategies to capitalize on weaknesses and counteract threats.
• Market Share and Positioning: Understanding the market share of your competitors and their positioning in the market relative to yours provides valuable insights. It helps identify areas where you can differentiate your products or services.
• Product and Service Offerings: Analyzing the features, quality, and pricing of your competitors' offerings helps you benchmark your own products or services. It can also reveal areas for improvement or innovation.
• Marketing and Branding Strategies: Evaluating the marketing and branding strategies of competitors provides insights into how they are reaching and engaging with their target audience. This information can be valuable for refining your own marketing approach.
• Customer Reviews and Feedback: Examining customer reviews and feedback for your competitors' products or services can highlight areas where they excel or fall short. This information can guide your efforts to meet or exceed customer expectations.
• Technological Advancements: Keeping track of technological advancements adopted by competitors can inform your own technology strategy. It ensures that you stay competitive in terms of innovation.
• Financial Performance: Analyzing the financial health of your competitors can provide an understanding of their stability and growth potential. This information is crucial for strategic planning.

Overall, competitor analysis is an ongoing process that helps businesses stay informed about industry trends, anticipate changes, and make well-informed decisions to maintain or improve their competitive position.

Why Is Competitive Analysis Important in Business Plan

Conducting a competitor analysis is not just about observing and replicating what others are doing. It's about leveraging this knowledge to formulate a unique and superior strategy that distinguishes your business from the rest. The importance of competitive analysis in a business plan can be seen in the following points:

• Identify Market Gaps: Through competitor analysis, we can identify unmet needs in the market or gaps in competitors' offerings that can be leveraged as potential business opportunities.
• Inform Decision Making: By understanding what strategies are working for competitors and why, we can make more informed decisions about our own strategic direction.
• Predict Competitor Moves: A detailed understanding of competitors can help predict their future actions based on their past behavior. This allows businesses to proactively devise counter-strategies.
• Benchmark Performance: Comparing key performance indicators (KPIs) against industry competitors helps determine how well your business is doing and where improvements can be made.
• Reduce Risks: By regularly analyzing competitors, businesses can detect threats early and take preventive measures to reduce potential risks.

Competitor analysis is a critical component of any business strategy. It's not just about keeping tabs on competitors but using this knowledge as a strategic tool for growth and improvement. 

How to Conduct a Great Competitive Analysis in Business Plan

The ability to stay ahead of the competition is vital in the ever-changing business landscape. Boardmix understands that importance and has made it a mission to equip businesses with the right tools to navigate this competitive environment. In this part, you will be led through a step-by-step process on how to conduct a great competitive analysis for your business plan.

Phase 1: Identifying Competitors

Every great competitive analysis starts with identifying your competitors. They can be direct (companies that offer the same products or services as yours) or indirect (companies that offer different products or services that serve the same purpose). With Boardmix's in-depth AI analysis tools, you can easily identify these competitors. Start with a list of 4-10 primary competitors in your market segment and then narrow down to those that directly impact your business.

Phase 2: Analyzing Competitor Products and Services

Once you've identified your competitors, it's time to scrutinize their products or services. Are there features that stand out? Are they priced higher or lower? What is their perceived value among customers? Boardmix provdies a feature can help streamline this process by offering a side-by-side comparison of your products and services with those of your competitors.

Phase 3: Assessing Competitors' Sales and Marketing Strategies

Understanding your competitors' sales and marketing strategies can provide crucial insights into their target audience, key messages, pricing strategy, and distribution channels. Leverage Boardmix's AI and infinite canvas capabilities to gather information about competitors' advertising, public relations, content marketing, SEO strategies, and more.

Phase 4: Examining Competitors’ Strengths and Weaknesses

This step involves analyzing each competitor's strengths, weaknesses, opportunities, and threats a SWOT analysis. Their strengths might be superior customer service, unique technology, or robust distribution networks. Weaknesses could be high prices or outdated offerings. Boardmix’s SWOT analysis tool can make this step seamless, helping you uncover potential areas where you can outshine your competition.

Phase 5: Studying Competitors' Market Positioning

How do your competitors position themselves in the market? Boardmix can help answer this by providing insights into competitors' branding strategy, unique selling propositions (USPs), and value proposition. Such an understanding will help you identify gaps you could fill to differentiate yourself in the market.

Phase 6: Ongoing Monitoring of Competitors

Competitive analysis should be an ongoing process due to ever-evolving markets and strategies. That's why Boardmix offers regular updates about changes in the competitive landscape so that you can adapt your strategies accordingly.

In conclusion, competitive analysis is pivotal in staying ahead of the game in business. It informs strategic decisions, helps exploit competitors' weaknesses, identifies market gaps, and creates unique value propositions. With Boardmix by your side, conducting a competitive analysis is made effortless and intuitive, ensuring your business carves out a unique and competitive space in the market.

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The Ultimate Guide to Competitive Analysis + Competitor Analysis Example Template

What is a competitive analysis?

What are the benefits of doing a competitive analysis, a step by step guide to conducting a competitor analysis, a competitive analysis template, tips and tricks for successful competitor analysis, competitive analysis - the takeaways and faqs.

Knowing your own products like the back of your hand is essential for getting your e-commerce store going. But stacking your offering up against the competition is what will keep it growing!

This is where competitor analysis comes in. It’s a handy competitive research tool that can help you effectively carve out an ever larger share of your market.

Competitor analysis can benefit you in multiple situations:

• Maybe you’re launching a new product and need to know how to present it,
• Maybe your brand is feeling stale and you need ideas (a great way to re-engage existing customers),
• Maybe you noticed your sales growth slowing, or even stopping completely,
• Or maybe you simply have some downtime in your marketing schedule and want to sharpen up your message and ads in relation to your competitors. 

Whatever stage your business is at, analysing your competitors can help you find new opportunities and keep on top of industry trends.

Evaluating your competition might seem like a daunting task, but we’ve prepared a detailed guide to all things competitor analysis. 

In this blog, you’ll find:

• A definition of what competitor analysis is;
• A breakdown of its main benefits ;
• A step-by-step guide to conducting a competitor analysis yourself;
• A free competitive analysis template you can use for your e-commerce store;
• And some tips and tricks for getting your competitor analysis right.

Ready to beat the competition? Then read on!

A competitive analysis - also known as a competitor analysis - is a process of evaluating what your current and potential competitors are up to . It involves looking at what the businesses you compete with are doing, and, more importantly, deciding on what you can do in response. 

Competitor analysis is about understanding your competition by evaluating:

• their products, 
• their marketing and sales strategies, 
• their customers and audience, 
• and their strengths and weaknesses.

So it’s less about just comparing prices and more about understanding the businesses operating in your niche, and what advantages you might have over them.

Analysing competitors is a crucial step in your business planning process. Ultimately, you’re going head-to-head with your competition to win the loyalty of the exact same customer base. Competitor analysis is a tool that reveals critical insights that can help you come out on top in this race.

The biggest benefit is that you will understand how to turbo-charge your business’ growth. That’s because you will know how to compete in the market. A clear competitive analysis will make any business decision you take more informed and more likely to succeed.

Here’s a breakdown of some of the main benefits of doing a competitive analysis:

Finding a competitive edge

While market research helps you find customers for your business, competitor analysis helps you make your business unique. A customer’s first question will be: Why do I need this product? But their second will be: Why do I need your version of this product?  Focusing attention on your current and potential competition will help zero-in on specific product features, pricing strategies, and marketing approaches that can distinguish your brand from its competitors and persuade customers to pick you.

Learning from others 

Competitive analysis helps you understand the businesses competing for your potential customers. This is key to figuring out where you can improve. By analysing your competitors, you can not only learn their best practices, but also avoid some of the mistakes that they’ve made.

Managing threats and reducing risk for your business

Even if your sales are rocketing right now, how can you be sure that this will continue?  Understanding your competitive landscape well makes you better prepared to face any unpleasant surprises . Competitor analysis allows you to identify your competitive vulnerabilities and keep an eye on potential threats. Scoping out where customers may go if they don’t choose you is a good way of making sure it doesn’t happen.

You can do it too.

Capitalizing on opportunities

Is there a product or niche that is on fire right now, and could propel your store from five figure earnings to six figure? Well, there might be, but without competitive analysis there’s a good chance you’ll miss it. Competitive analysis makes it easier to spot gaps in the market and jump on these opportunities while they’re still hot. 

Planning ahead

Many businesses find themselves wrong-footed, not because they did something wrong, but because they failed to anticipate changes in the market. A competitor analysis will help you identify the strategies your competition uses to provide value to your target buyers. By looking at these strategies, you can better recognise how you can enhance your own long-term business strategy, or find alternative strategies to attract additional customers. Just imagine you’re selling DVDs online right before Netflix launched its streaming service! If you’re analysing the competition, you’d understand that your business needs to change (maybe a pivot to movie merchandise instead). 

The more you can understand the businesses that directly and indirectly compete with you, the better you’re equipped for success. In essence, competitor analysis is a way to ensure you are one step ahead of your competition.

So, with no further ado, let’s see how it’s done.

It’s easy to burn hours of time on competitor analysis. To save you some time, we have set out a structured step-by-step guide that should help keep you focused on what to look for and where.

Let’s get into the how-to’s of a competitive analysis in 6 easy steps:

Step 1: Create a spreadsheet for collecting the data

The first step is the least interesting, but it’s important. You’ll need to be ultra organized when conducting your analysis, so get a spreadsheet set up. Make sure everyone working on the analysis can access it.

And in terms of the content of the spreadsheet, we’ll leave that for later in this blog, when we present your very own template for conducting a competitive analysis. 

Step 2: Identify your competitors

It’s time to find the competition. Of course, good ol’ Google will be a valuable tool here. But one important point to remember is that you should always add modifiers to your search terms. These are additional words or phrases that will dramatically narrow down the number of results for a search, and help you find your direct competitors more easily. 

For example, imagine you’re a US-based e-commerce business that sells monthly subscriptions of organic gourmet coffee. If you simply search for “Gourmet Coffee”, you return over 375 million results. And the first is a blog about coffee, not a competitor. 

Now add the modifiers “Monthly subscription” + “US” + “organic” and you get an 87.5% reduction in search results. Plus, all the results are for e-commerce coffee stores. Bingo!

Once you have tried the most obvious modifiers, make some variations like “best”, “cheapest”, and “fastest delivery”. And don’t forget Google tries to work out the intention of a search too (eg. whether you’re trying to buy something, research something, compare something etc.) So adding “buy” or “for sale” into your search enquiry might also help with honing in on your competitors. 

Step 3 - Define your competitors by type 

Once you have a list of competitors, it’s time to organise them a bit. The key categorization is to divide them into direct competitors and indirect competitors.

Direct competitors

These are e-commerce stores that are offering the same products (or very similar) to the same audience (or very similar) as you are. So, to go back to our coffee subscription example, any other e-commerce stores selling coffee as a subscription to customers in the same region and demographic would be a direct competitor.

Indirect competitors

These are e-commerce stores that are selling a similar product to you, but with some crucial differences. For example, you might be at opposite ends in terms of pricing (luxury vs low end). For our subscription gourmet coffee store, indirect competitors would either be those selling cheap, lower quality coffee, or those not selling as a subscription. You could even consider competitors selling a different product that solves a similar problem. For example, if you’re selling vitamin supplements, you may consider standard pharmaceuticals to be your competitors.

A different approach for different competitor types

It’s important to be careful when categorising your competitors into direct or indirect, because the way you respond to these types of competitors will differ. 

In the case of direct competitors, you might need to change specific parts of your product or service in response to what you discover about your competitors. Furthermore, when you’re targeting the same audience you’ll need to focus on specific benefits (like free shipping) that you can offer over your direct competitors.

But with indirect competitors, you might think more about persuasion. How can I get a customer who buys low-end coffee interested in trying gourmet coffee instead? So you’re going to focus less on the specifics, and more on the general benefit you have to offer.

Step 4 - Analyse each competitor’s value proposition and positioning

Now things are starting to sound a bit “advertising agency.” But don’t worry, fancy terms like “value proposition” and “positioning” describe really simple ideas. Here’s what they mean:

• Value proposition - a summary of the main reasons to choose a product or brand.
• Positioning - where a brand fits within the overall market.

Analysing these elements are important, because they give you a lot of information about the  company’s product, service, and audience. And this gives you an opportunity to stand out. 

For example, take a look at this value proposition from Apple: Looks brand new. Feels like home.

Apple is emphasising an important feature to their customers - the fact that its new iPhone looks modern, but will feel familiar for Apple users. 

Understanding this gives you important information about who Apple is targeting - existing Apple users looking for an iPhone upgrade. So, if you’re Samsung you can come up with a distinctive and different message. Something like this:

By creating a different value proposition - one focused on discovery - you stand out and offer something different. If you’re thinking about your own value proposition and how to make it stand out, check out this list of 9 great value proposition examples to get you inspired.

How to find your competitor’s value proposition and market positioning

While companies communicate a lot about their value proposition and market positioning, it can sometimes take a little bit of digging to find it. Here are some tips you can follow to make the process easier. 

Go to the about us section of your competitor’s website then:

• Note what they say their mission is. For example, if they say their mission is to “Make gourmet accessible to more people”, this probably means they’re cheap and are targeting the low end of the market. If they say they want to “Provide lovers of coffee with unique tasting opportunities,” this means they’re highly personalised (and therefore probably expensive).
• See if your competitor compares itself directly to other products on the market. For example, Four Sigmatic spell out on their website exactly where they see themselves in the health food market.

You should also take a look at their social media activity. This can give you a good snapshot of their size and activity, and help you identify their target audience too.

Step 5 - Compile this data in one place

Add all the data you’ve gathered into your spreadsheet. You could create a scoring system to make it easier to analyse and help you pick out key trends.

Step 6 - Find your competitive advantage

Here comes the toughest part. But this is the whole point of the exercise - to find a way to present yourself that will give you an advantage over your competitors. 

Start with your direct competitors. Look through your data to see if there are any gaps in the market positions. Are there loads of competitors in the low-end side of your market, but very few in the luxury segment. Or perhaps everyone is focusing on free shipping, but very little is mentioned about flexible returns policies. 

Once you have looked through each competitor, you’ll need to turn the attention onto your e-commerce store. Ask yourself:

• What are our biggest strengths as a team?
• What do we do badly or find challenging?
• What do we enjoy and value most?

For example, let’s say you realise that you are highly creative but not so great at organisation. Then it would make sense for you to focus on building a brand people love by being active on social media, rather than thinking about logistics-intensive benefits like flexible returns.

Combine the two (your analysis of your direct competitors and your reflection on yourself) to find the perfect competitive advantage for you. 

For example, take a look at this brilliant ad by Atoms shoes.

Here is a brand that knows exactly what its competitive advantage is: 

creating comfortable, long-lasting shoes made from high quality materials.

They even spell out exactly what they’re not. 

This level of clarity is what you’re aiming for with your competitive analysis. 

Finally, once you have identified your competitive advantage, take a look at your secondary competitors. You might spot gaps in the market, or think of ways to convince some of their audience to try your product.

You’ve got a clear idea of the steps you’ll need to follow for your competitive analysis. Now, as promised, here’s a handy template you can use. It’s designed for general use for e-commerce stores, but of course you can adapt or tailor to your specific niche.

We’ve filled in the answers for our fictional gourmet coffee store to give you an idea of how to answer each section.

OK, just time for 5 handy tips to you should follow when you’re carrying out your competitor analysis.

• Analyse web traffic and organic performance: If organic traffic is a key component of your marketing strategy, look for organic competitors by seeing whose content performs well for specific search queries. You’ll need to look at the content they create and see how you can offer more value. You can also use tools like ahrefs or semrush to get more granular. Useful metrics to look for are number of referring domains and volume of organic search traffic . 
• Check out the ads your competitors are running: If you rely mainly on ads for your marketing, look at your competitors ads to see how they engage their audience and sell their product. Here’s a step by step guide on how to find your competitor’s ads.
• Know when enough is enough: Although it’s always sensible to do competitor analysis, avoid obsessively researching every possible competitor. It’s easy to take research to the point where you get stuck in ‘analysis paralysis’ and never get round to actually taking action so your business grows. You could try limiting competition analysis to once every 3 or 6 months, and be tight on how long you give yourself for the process.
• Take everything you see from your competitors with a pinch of salt: Don’t assume that everything a competitor does actually works well. When looking at a competitor’s glossy website, it’s easy to think everything is perfect. But few businesses get everything 100% right for their customers. And many businesses do things that aren’t always ideal or profitable, but due to other pressures they never get round to changing. Even if it is right for them, it might not be right for you. 
• Repeat, repeat, repeat at regular intervals: Competitive analysis isn’t a one-and-done exercise. While the frequency of analysis can differ depending on the industry, we recommend conducting a competitor analysis anytime from once a quarter to once a year. This gives you time to react to your discoveries and benchmark your progress.

Competitive analysis is an important tool in maintaining your store’s continuous growth. By keeping tabs on what the other e-commerce stores in your niche are doing, you can:

• Constantly improve and clarify your value proposition so you really stand out in the market,
• Identify opportunities in the market that can bring in big bucks,
• Manage potential risks i n the future so that your business is secure for the long term.

And to carry out a successful competitive analysis, just adapt the competitor analysis example template in this article to fit your specific area of business. Then follow these 6 steps:

• Create a competitive analysis spreadsheet based on the template in this article,
• Identify your competitors (don’t forget to use a range of modifiers when you’re searching for them on Google)
• Define your competitors by type (separate them into direct and indirect competitors)
• Analyse your competitors’ value propositions and market positioning (for analysing your competitors’ social media activity, take a look at this guide to spying on your competitors’ ads in Instagram and Facebook.)
• Compile all your data in your competitive analysis spreadsheet
• Find your competitive advantage (after all, this is the main benefit of conducting a competitive analysis).

So, you’ve got the competitive analysis template. And you’ve got the steps for completing your competitive analysis. Now all you need is schedule some time to put this strategy into action (we recommend once every 3-6 months, and annually at the very least). Then get ready to propel your business’ growth and secure its long-term future.

What is competitive analysis?

A competitive analysis - also known as a competitor analysis - is like an audit. You gather information on who your competitors are and what they’re doing. This usually includes looking at their products, their marketing and sales strategies, their customers and audience, and the strengths and weaknesses of their business.

How does it work?

There are 6 keys steps to follow when conducting your competitive analysis: create a spreadsheet (based on the template in this article), identify your competitors, categorise them into direct and indirect competitors, analyse them, compile your data, and then identify your competitive advantage.

Why is it worth doing?

There are 3 main reasons to conduct a competitive analysis. The first, and most important, is to identify your own competitive advantages. See what you can offer that your competitors can’t and use this to attract new customers. Secondly, a competitive analysis will help you identify new opportunities and gaps in the market. Thirdly, it will enable you to secure your business’ future by being ready for changes and shifts in the market.

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I'm a content manager at sixads. I'm fiery about marketing, writing and traveling, so you can often find me scribbling away in some unknown corner of the world. If you want to know more ways to increase traffic and attract buyers to your online store get in touch with sixads on one of the channels bellow.

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• by IdeaBuddy Team
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Table of Contents Hide

An example of airbnb, why you need to do a competitor analysis, categorizing your competitors, what you should compare, comparison matrix, factor importance, overall score, analyze your competitors with ideabuddy, how do you decide on the rankings, conducting a competitor analysis is worth the investment of your time.

One of the most important things to do when starting a business is to get a better understanding of your competitors. The easiest way to do this is by using a template or a tool for competitor analysis.

This is a stage when entrepreneurs focus on their own business idea without looking at what else is happening in the market.

The next question is: How do you conduct a competitor analysis? More specifically, how do you do it in a way that is meaningful, and that provides useful insight to help make your new business successful?

Let’s look at all these questions in more detail, starting with why you should conduct a competitor analysis.

Every business has competitors

Even if you have an absolutely unique idea or product that nobody else has thought of, you still have competitors. They might be indirect competitors, but they are still competitors.

Why? Any business or brand that can attract customers that could otherwise do business with you is a competitor.

Take Airbnb as an example. It is known as a market disruptor as it presented travelers with a new and unique alternative for booking travel accommodation. When Airbnb launched, it had no significant direct competitors doing the same things it was – how could there be when AirBnB was the industry disrupter ?

However, hotels, motels, hostels, campsites, etc were still in competition with Airbnb, albeit indirectly. The same applies to booking aggregators and comparison tools like Booking.com.

All these types of businesses are not direct AirBnB competitors as they don’t do exactly the same thing, but they are indirect competitors as they do attract customers that AirBnB also targets.

There are several compelling reasons to analyze your competitors. High up on this list of reasons is to understand how your business stands out in the market. A competitor analysis will also help show how your business will attract customers who may already be clients or customers of the businesses you will soon be in competition with.

Furthermore, the modern world of business is very fast-paced. Trends change quickly, launching a new business is easier than it used to be, communications are instantaneous, and the marketing platforms available today make it possible to reach very large audiences quickly and often affordably.

So, the more you know about your business and how it stands in the market, the better.

Conducting a competitor analysis can also give you a competitive advantage by helping you develop strategies that will win business from your competition. For example, by doing a competitor analysis, you can identify areas where a competitor is stronger than you, so you can take steps to improve your business.

You can also exploit the areas where you are stronger.

Finally, conducting a competitor analysis will help you understand your customers better.

Now let’s get into the nitty-gritty of doing the competitor analysis. You first need to identify your competitors, then you should categorize them as direct or indirect:

• Direct competition : businesses selling products or services that are the same or are very similar to yours
• Indirect competition : businesses selling products or services that are different from yours but might satisfy the same customer need

Generally, direct competitors are more important, but that doesn’t mean you should ignore indirect competitors, as they can also take market share that you hope to capture.

The objective of a competitor analysis is to understand your competition’s strengths and weaknesses in relation to your business.

The best way to do this is to breakdown your analysis into attributes. Here’s an example of a breakdown of five specific attributes you can analyze:

• Price – does the competitor have higher or lower prices than yours, and compared to others in the market? Does their pricing structure make their products more attractive to customers, i.e., have they got their pricing right? Or, have they overpriced their products to the point that they are unattractive to customers?
• Quality – what is the perceived value and variety of the products and/or services offered by your competitors? Is this perceived value a benefit to the business or not?
• Customer service – how do your competitors treat their customers, and what levels of customer satisfaction do they achieve?
• Reputation – what level of credibility among various target segments do your competitors have? How loyal are their customers? How strong is their brand, and is it viewed favorably, indifferently, or negatively?
• Location – do your competitors have a good location? Does their location give them a competitive advantage? Does it make their business accessible to customers?

The above is just an example, as some of the attributes might not be as important to your business as something else. For instance, if you are a tech or engineering company, you might remove “location” from your analysis, replacing it with “talent acquisition and retention”,  i.e. the availability, acquisition, and retention of talent.

Using a template for competitor analysis

The next step in the process is to use a structured approach to analyze your market rivals. The easiest way to do that is by using the template for analyzing your competitors. The objective here is to get information you can actually use to benefit your business.

A comparison matrix is an ideal template for competitor analysis to provide you with the information you are looking for. It will give you an overview of the threat each competitor poses to your business and will highlight where your strengths lie.

Here’s a free template for competitor analysis you can use. It includes the comparison factors mentioned above:

The steps to using this Comparison Matrix competitor analysis template include:

• Add at least three competitors. They can be direct or indirect competitors.
• Assess your business and your competitors, scoring each of the attributes with a score: 1 for Poor; 2 for Fair; 3 for Good; and 4 for Excellent.
• Add a weighting to each attribute to signify its importance to your business. For example, Location is important to a manufacturing business in terms of rent costs and access to transport links, but the location is likely to be much more important to a retail store that needs footfall, i.e. people to walk through the door.
• The weight you give an attribute should be in comparison to the other factors in the table. It should be a percentage too, with the sum of each weighting equalling 100 percent.

To explain the last point above further, here are examples from the two sectors mentioned previously – manufacturing and retail. Adding up the percentages in each example gives 100%.

A manufacturing business might give Factor Importance ratings as follows:

• Price – 25%
• Quality – 25%
• Customer Service – 20%
• Reputation – 20%
• Location – 10%

However, the Factor Importance ratings for a retail business might look something like this:

• Quality – 15%
• Reputation – 15%
• Location – 25%

In other words, location is much more important for the retailer than the manufacturer.

Finally, calculate the overall score for you and your competitors by multiplying the score you give each attribute with that attribute’s Factor Importance percentage. Add all these figures together to get a final score. The business with the highest score will be the one with the most competitive offering in the market.

Let’s look at an example of competitor analysis, using the Factor Importance ratings of the manufacturing business above:

We now multiply all the scores with the Factor Importance percentages. So, Competitor A gets a score of 4 for Price. Price has a Factor Importance of 25%, giving us a figure of 1. We do this for all the scores:

You now add up all the scores for each business. The higher the score, the more competitive the business is in the market. Here are the results for this example:

• Competitor A – 3.4
• Competitor B – 3.3
• Competitor C – 3.05
• My Business – 3.1

So, in this example, you can see that Competitor A is the strongest in the market. This business owner is a new entrant so it doesn’t have a reputation in the industry at the moment. However, building that reputation through delivering on things like price, quality, and customer service will increase its score for the Reputation attribute, potentially putting it ahead of its strongest competitor.

The process above takes a bit of time and a bit of working out, but there is an even faster and easier method for doing a competitor analysis than a template – by using the IdeaBuddy app .

IdeaBuddy is super-easy to use and has a clean, intuitive layout. Plus, it automates many of the above steps. You just enter your assessment of each attribute, and IdeaBuddy will give you the information you need to properly analyze your competition, including the Threat Level assessment of each competitor.

Okay, you have three competitors entered into your Comparison Matrix or to IdeaBuddy, but how do you now analyze each factor to allocate it a ranking?

This requires knowledge of the competitor which means you will need to do some research.

Ideally, you should try the customer experience first-hand, i.e. buy a product, visit the location, use a service, etc. This may not be possible in all situations, but where it is possible, trying the customer experience first-hand will be one of your best sources of information.

You should also analyze the company’s website:

• Browse their list of products/services
• Check their brochure and any other marketing materials they produce
• View their social media channels
• Look at, watch, or listen to their ads
• Check out reviews left for the company on review websites
• Read company reports
• Read blogs written by the company and by key individuals in the company

Finally, where possible, speak to people with first-hand knowledge of the competitors you are analyzing. This includes previous employees, current and former customers, and anyone else you know who has knowledge of the company.

The insights you get from conducting a competitor analysis will give you invaluable information. Therefore, it’s worth the investment of your time. Of course, you should take advantage of tools that make the process more efficient and effective, such as the Free Comparison Matrix template offered here.

You should also try IdeaBuddy for free .

Also, don’t do this as a once-off exercise. After all, markets change, and your competitors can change too, not least to react to the launch of your business. So, go back to your competitor analysis periodically to update the information and gain new insights.

Read also: How To Do a SWOT Analysis For Your Business

IdeaBuddy Team

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9 competitor analysis templates (with example data)

Last updated: March 2024

Is competition always a good thing? It can certainly be a motivating factor — pushing you to think more creatively, stretch your limits, and keep growing. This is especially true for product managers . You are constantly working to differentiate your offering from others in the market and deliver greater customer value.

Gaining a deep understanding of your competitors is vital for product success and innovation. Strong competitive research and analysis can help you identify exciting opportunities and safeguard against potential threats. It also informs how you define your product strategy and address customer needs in a better way than competitors.

But understanding your competition takes real effort. A meaningful competitor analysis goes beyond listing out basic offerings and pricing structures — it requires a firm grasp of your market, the competitive landscape within it, and the one-of-a-kind value your product provides.

Done well, competitive research will become an integral piece of your product planning process . But it is important to note that competitors should only help inform your product's trajectory, not dictate it. Instead of making decisions about your product based only on getting ahead of the competition, use your research in conjunction with what you know is best for your customers and your company. What your customers want and need is your top priority — this is what will ultimately help you deliver a lovable product .

There is no way around it — your competitors are a consideration. But this is just one data point to use when you set your own strategy and roadmap. Brian de Haaff Aha! co-founder and CEO

The free Excel and PowerPoint competitive analysis templates in this guide make it easy to organize and communicate your competitive research . They are a huge time-saver. That said, Excel and PowerPoint templates require manual updates and are often disconnected from your daily product work. If you want to quickly capture and share competitive information, use a lightweight whiteboard template from the Aha! template library. If you are ready to go deeper, building product roadmaps , defining go-to-market strategies , and feature prioritization, try Aha! Roadmaps .

Use the template below — with a free trial .

Jump ahead to any section below:

What is a competitor analysis?

What are the types of competitor analysis, how to perform a competitive analysis, whiteboard template, aha roadmaps competitive analysis template, competitive landscape template, competitor profile template, competitor scorecard template, competitor overview template, capability analysis.

Feature analysis template

Imitability analysis template

Competitive differentiation analysis template

A competitor analysis is a useful tool to understand the market landscape. This helps you identify alternative ways prospective customers can solve their problems. It is also a great way to evaluate other vendors' strategies so you can assess their strengths and weaknesses . This gives you important insights into how other companies are trying to provide value to your target buyers.

Your competitive analysis should answer these core questions:

Who are the other companies vying for customers in your market?

What products and services do they offer?

What is each competitor’s market share?

What are their strengths and weaknesses?

How do your own products and services compare?

How can you differentiate your products and services?

Product and marketing teams use these findings to inform their strategic plans and determine what will make their product a success. It allows you to formulate an approach that considers the strengths and weaknesses of your own offering relative to the competition.

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50+ guided templates for product teams

There are many different types of competitor analysis. When considering which template to use, it is important to think about the factors you want to analyze and how you will share your findings.

Listed below are the pre-built examples included in this guide.

Surpass your competition by using these carefully selected templates to see where your product fits in the market.

Conducting a competitive analysis pushes you to consider all options available to your prospective customers. Through this research, you can ensure product differentiation and establish a sustainable competitive advantage.

Before we dig into the templates you can use to display these valuable findings, here are the basic steps involved in performing a competitive analysis .

Establish a list of direct and indirect competitors

Direct competitors offer a similar type of product within the same market. Indirect competitors offer a different type of product that serves the same need.

Research your identified competitors

Compile information by exploring the company's website, customer and product reviews, social media, financial information, sales collateral, videos, and press releases.

Test the product yourself

Sign up for a free trial or tour of the product. Experiment with the functionality and test run the features.

Document the user experience

Study the product's UX and empathize with the customer. Go through the steps and identify usability pros and cons.

Identify your competitor's vision and positioning

What do your competitors aim to achieve? Why does their product exist? How do they describe their offering in the market?

Define the differentiators

What distinguishes their product in the market? How do they stand out? Where do they fall short?

Create a competitor analysis report

The templates below provide a great starting point. Share your report with the product, sales, and marketing teams.

Maintain & update report

Make this process part of your strategic product planning. Assign a point person to keep the report updated throughout the year.

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This whiteboard template in Aha! software lets you conduct a detailed competitor analysis in a streamlined view — so you organize key observations about multiple competitors in one space. Use sticky notes and sliding scorecards to help uncover opportunities to make your product stand out. Plus, since it is a whiteboard template, this one is great for collaborating live with your team.

Start using this template now

Use the Aha! Roadmaps competitive analysis template to track key competitors across your workspace hierarchy. Quickly capture important information including revenue, workforce, and product positioning. Then create a competitor chart — showing exactly how your products stack up — and share competitor profiles in an Aha! Roadmaps presentation . Maintaining competitor profiles in the same tool you use for roadmapping helps integrate strategic thinking into your planning process.

This PowerPoint template makes it easy to visualize your competitors in a single view. It is the perfect way to position the key players in the market and how they relate to each other. It is useful, for example, when you need to provide an overview of your competition to executives or advisory boards. You can easily customize the titles for each quadrant and change the values on the x and y axis to align with how your company assesses the market.

This Excel template makes it easy to build a detailed profile for each of your main competitors. It is great for capturing a wide range of information about their organization, customers, and products.

A well-defined competitor profile gives internal teams — such as marketing and sales — a better understanding of who they are up against. It provides insights into the strengths and weaknesses of each competitor so the team can position their own offering as the better solution to prospective customers.

Create a competitor scorecard to rank your competitors and measure the threats they represent to your business. It is a great way to assess your competitors using a consistent set of scoring metrics.

You decide which attributes you want to score. For example, you can assess organizational attributes, such as market awareness or ability to execute. Or you can rank product attributes, such as ease of use, unique features, and quality. This Excel template also provides a weighted scoring approach so you can rank the relative importance of each attribute from the customer's perspective.

Use this worksheet to gather important information about all of your competitors in one place. It allows you to capture details about each company, product, and their go-to-market strategies .

This Excel template is a useful tool to organize your research so you can easily find and access the information you need. It serves as the foundation of your competitive analysis and provides a consistent way to collect and analyze key data.

A capability analysis allows you to assess how your product and team compares to a competitor's. It is a great way to analyze the collective skills, abilities, expertise, and even how product features match up. This Excel template helps you define what your organization is good at and where you can improve. It also lets you rank the relative importance of each capability to customers. This keeps you focused on how effectively you are solving the customer's problem .

Features analysis template

Use this features analysis PowerPoint template to create a detailed comparison of the features that each product includes. It allows you to conduct a thorough assessment of competitive products so you can see how your own offering stacks up.

This helps you identify features that are unique to your product as well as any gaps in relation to what your competitors offer. A common approach is to use Harvey Balls to show the degree to which each feature is complete. This makes it easy for internal teams to understand the relative strengths and weaknesses of their product from the customer's perspective.

Imitability ladder template

The imitability ladder PowerPoint template helps you determine the uniqueness of your offering. It is a great tool to help you assess how easily your tangible resources (financial, physical, technological, and organizational) and intangible resources (human, innovation, creativity, and reputation) can be imitated. This helps you understand your competitive advantage and identify existing and potential weaknesses in your business strategy.

This PowerPoint template helps you define a product strategy that will set your company apart from the competition. It is perfect for identifying the basic, expected, augmented, and potential benefits of your product.

This makes it clear where you need to add value to your solution so you can create customer delight and lasting competitive advantage. You can include functional features and non-functional features (such as design or branding) that differentiate your product from competing solutions.

Staying informed on what options your current and prospective customers have will help inform your long-term product strategy. Remember to regularly update your competitive analysis and corresponding business models. This will help you identify changes in the market and respond quickly to new challenges and opportunities.

By integrating competitive research with a deep understanding of your goals and customers' needs, you will be in a strong position to make your offering a success.

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5 Strategic Ways to Write Competitor Analysis Business Plan

Have you ever heard about a competitor analysis business plan? Competitor analysis business plan is the way to analyze your competitors in business. Do you want to know about it? Let’s check this article out.

What Is Competitor Analysis Business Plan?

What is competitive analysis of a business plan? Have you ever heard about it? As we know, a business plan is a document where you write your business goals and the things and ways to achieve them. When you are writing a business, it has to be informative by inputting all the business data like products and your business marketing strategies.

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There is a competitor analysis business plan. What is it and how to find the business plan competitive analysis example? So competitor analysis means analyzing your competitors strengths and weaknesses that might include the competitors marketing strategies, service development as well as the potential products. You can find all of the data by using the market research methods.

Read also: 11 Steps to Write Restaurant Business Plan with Examples

What Are the Benefits of Writing Competitor Analysis Business Plan?

Before you write an analysis of the competition in business plan, you can try to find the competitor analysis in business plan example first. But before that, you need to know the benefits of writing a competitive analysis template. Here are the benefits for you.

Identify Potential Competitors

The first reason why you need to write business plan template is because it helps you to identify your potential competitors so that you can prepare a strategy to face it. When you are writing the competitor analysis business plan, here are several things you might get such as :

• The highly profit margins in the industry.
• It is relatively easy to enter the business market.
• The market grow rapidly.
• Few business competition.

Opportunities

By using business plan format to analyze your competitors, you might get the opportunities to know your competitors very well. This also helps to increase your business strategy as well as its sales.

Other benefits you might get is you will know what risks your business might face up in the future. So that you can prepare any action or strategy in anticipation of something bad happening to your business.

How to Write Competitor Analysis Business Plan Examples

There are several ways to analyze your business competitors. You can use digital marketing competitor analysis to help you analyze your competitors including their product, brand, the marketing strategies and so on. 

Beside using digital analysis, you can also analyse it by writing a competitor analysis business plan. Are you curious on how to write a competitor analysis for a business plan? Here are the tips for you.

Find Out Who Is Your Competitor

The first thing you need to do before writing a business plan is knowing who your competitor is. You can do the market search to help you find your competitors. Your competitors will depend on what and where you start your business. If you sell locally, your competitors must be the local business owner too. If you sell worldwidely, you might have local and international competitors.

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Find Out about Your Competitors

After you know who your competitors are, you need to find out about them. Here are the things you need to find out, such as:

• What markets do your competitors serve?
• What products do your competitors offer and what are the benefits?
• How many people are buying their product and what are the products?
• What marketing strategies do they use?
• What services do they offer to customers?

Gathering Information for Your Competitor Analysis

You need to gather all information about your competitors to help you analyse them. You can search for your competitors’ information through the internet by looking at their company’s website or marketplace. But it is not enough, you can try to go to their business place and observe your competitors’ business and how they treat their customers.

For example if you set up a restaurant and you have other restaurant competitors, you can try to visit their restaurant and try out their menu. Then you can compare it to your menu. You will get the answer why your competitors get many customers? How do they treat them? How is the food they offer and so on. 

Analyzing the Competition

When you have a bunch of your competitors’ information, you can try to analyze them. You also need to analyze the competition in the business. By knowing how your business as well as your competitors, you can find out what strategies you can use to compete with your competitors.

For some businesses, identifying the market niche really works to find out the specific target market. The market target might be group based on the gender, age, location and other factors. The goal by analysing your competitors is to identify and expand the competitive benefits that you can offer while other competitors can’t.

Writing the Competitor Analysis Section

Business plan is not only used to analyse your competitors but you can use a business plan to find your business idea. The way you write the business plan is actually the same no matter what thing you want to analyze.

When you use a business plan to analyze your business competitors, you need to write the competitors analysis section in the form of paragraphs. First paragraph usually outlines about the competitive environment including who your competitors are, what products they offer, how much target they control and other related information about your competitors.

The following paragraphs usually talk about your competitors’ detailed advantages. In this paragraph, you need to explain what your competitors benefits and why your business competes with them, and what strategies your business should use to compete with them. You need to describe every step you need to take to compete with your competitors.

Read also: Tight Budget? Here 11 Marketing Tips for Online Business!

Competitor analysis means analyzing your competitors strengths and weaknesses that might include the competitors marketing strategies, service development as well as the potential products. You can find all of the data by using the market research methods .

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Competitor analysis.

Tips for use

With the Competitor Analysis you analyze your competitors’ strengths and weaknesses. This tool can easily be used by yourself, or with colleagues. Print the template and use the tool to create an understanding of your competition. 

Have a look at the example of Fleur Flowers to get an understanding of a Competitor Analysis.

With the Competitor Analysis you analyze your competitors’ strengths and weaknesses. Follow the steps to complete your own Competitor Analysis.

Summarize your target group

Shortly describe your target group. Who are the customers that buy your offering? Make the description as specific as possible. If your target group consist of businesses you can mention their size, industry or their offering. If your target group consist of consumers you can mention their age, goals, gender, education level or interests. 

Identify your competitors

Write the names for up to three competitors in the first row. To help you generate this list, think of where your customers would go if they cannot buy your product or service.

Determine competitors’ strengths and weaknesses

Now think like your customers. Why would a customer go for the services of your competitors instead of coming to your company? You can describe this by thinking about the offerings of your competitors. It would even be better when you visit your competitors and experience what their customers experience. Write down three strengths of each competitor. Also consider why customers would not go to your competitors. Write down three weaknesses of each competitor. 

Describe the key findings

Finally, in the fourth column of the template write down the key findings for the strengths. What stands out? What patterns can you discover from your competitors? And which opportunities can you come up with? Also, write down your key findings for the weaknesses. What are the aspects that your competitors don’t do well? How could you avoid making the same mistakes? What should you do to serve your customers in such a way that you differentiate from your competitors in a positive way?