Competition is crucial for businesses of all sizes. Whether you’re running a local business or launching a new app, you need to understand who your competitors are and what they’re doing. This is where a competitive analysis comes in.

It’s the process of gathering information about your competitors to identify their strengths and weaknesses so you can make better decisions and improve your business strategy. 

Understanding the Market

One of the greatest benefits of developing a competitive analysis is that it helps you get a clear picture of the market you’re operating in. 

Imagine trying to find your way through a city without directions, not so easy right? The same thing goes for running a business without understanding the competition. 

By researching your competitors, you can see who the major players are, what products or services they offer, and how they attract customers. You will have a better idea of where your business stands and where you fit in.

For example, if you’re opening a coffee shop, you would want to know how many other coffee shops are in the same area as you, what their pricing looks like, and how they’re marketing their products. 

This can help you find a niche that makes you stand out, like having specialty drinks unique to your business or an aesthetic and inviting atmosphere that the other businesses around you may lack.

How To Create a Competitive Analysis by Team Asana highlights, “…understanding the competitive landscape is key to positing your brand, identifying market trends, and staying relevant.” It provides a foundation for your business and helps you see where you can carve out your own space in the market.

How Competitive Analysis Helps You Stand Out

No business is perfect, and by understanding where your competitors fall short, you can position yourself as the solution. 

Say your coffee shop’s competitors are known for their slow wait times and limited options. This is your chance to offer a faster experience with a wider variety of options to appeal to customers who are unhappy with the competition. You can fill the gaps of your competitors and not only offer something better but build a more loyal customer base.

What is a Competitive Analysis – and How Do You Conduct One? by Christine White mentions, “…by identifying what your competitors are doing and not doing, you can find opportunities to outperform them in areas where they might be falling short.” This can be a powerful way to differentiate your brand and stand out in a crowded market.

Developing a competitive analysis helps you reduce risk. By knowing what your competitors are up to, you can anticipate potential threats and create solutions for them. 

If you see that a new competitor is entering the market with a similar product or service, you can start thinking of ways to defend your business, like offering promotions or launching a new product before they have a chance to grab your customer’s attention.

Staying Ahead of the Market

Competitive analysis doesn’t have to be complicated; it’s about taking the time to understand what’s happening around you and using that information to improve your business. At the end of the day, knowing your competition is important for any business that wants to succeed. 

Whether you’re just starting, or you’ve been in the business for years, analyzing the competition will help you find new opportunities, develop strategies, and stay ahead of the game. 

View my example of a competitive analysis below:

References

Asana, T. (2024, February 23). Conduct a competitive analysis (with examples) [2024] • asana. https://asana.com/resources/competitive-analysis-example 

White, C. (2024, August 22). What is a competitive analysis – and how do you conduct one?. HubSpot Blog. https://blog.hubspot.com/marketing/competitive-analysis-kit-1-varb