No business operates as an island. Competition – direct or indirect plays a critical part in every business landscape and strategy. If you are not paying attention to your competitors, it could lead to a very unpleasant surprise at the end of the day.
But how does a business effectively match its competitor without putting itself at a disadvantage? The answer is simple. Build an effective competitive analysis framework that allows you to measure and compare your business strategies with that of your competitors to mitigate any possible threats that could arise while positioning for future growth.
What is a Competitive Analysis Framework?
A competitive analysis framework is a tool that helps you analyze your competitors and their strategies, strengths, and weaknesses. It gives you an in-depth study of your competitors, their products or services, marketing strategies, and more.
The objective here is to gain insights into how they do business so that you can improve on it while maintaining your brand image, value proposition, and customer base.
A good competitive analysis framework can help you build a better understanding of your industry and position yourself for success in this ever-changing landscape. Understanding your competitor’s strategies will help you determine whether there is an opportunity for you to enter into a new market or improve upon your existing strategy.
In this article, we will walk through how to build an effective competitive analysis framework for your business.
Building An Effective Competitive Analysis Framework
If you are looking to grow your business, you may want to consider a competitive analysis framework. A competitive analysis allows you to take a step back from the day-to-day operations of your business and evaluate how your company stacks up against the competition.
Here’s how to build an effective competitive analysis framework for your business;
1. Identify your competitors
The first step in building your competitive analysis framework is to identify your competitors. This may seem obvious, but it is important to think about which companies are going after the same customers and markets as you.
This is important because your competitors can be direct (businesses selling similar products or services) or indirect (businesses selling something different but maybe targeting your customers).
2. Highlight what you know about them
Once you’ve identified your different competitors, highlight what you know about each of them. It is important to consider what you know about these companies.
What do you need to find out more about? Think about the following questions:
- What are the gaps in your knowledge of your competitors?
- What is their business model?
- What makes them successful in this market?
- Do you know how many employees they have or where their offices are located?
- What is their annual revenue?
3. State how you differ from these companies
Once you’ve identified what you know about your competitors, it’s time to consider how you differ from them.
When writing this section, it is important to be specific. How do you understand the market differently? What is your competitive advantage in this market, and how does it affect your customers? What is the value you provide to customers that your competitors don’t? What do your customers like about your business, and what makes them choose you over other businesses?
In this section, it is also important to consider how your competition has changed over time. Have they expanded their offerings? And if so, how does this affect the market for your product or service?
4. State your similarities with these companies
At this point in the process, you should have a good understanding of what your company is like. Now it’s time to look at how you compare with the competition.
To start, consider the following questions:
- How does our company culture compare with other companies in our industry?
- What are their values and goals? What are ours? Do they align with ours or are they different? How can we use this to our advantage or disadvantage in marketing campaigns and other messaging strategies?
- How do they operate similarly to us—and what can we learn from that experience?
5. Address any gaps in your list
At this point, you should have a good idea of who your competitors are and what they’re doing. If there’s anything that’s missing from your list, it’s a good time to add it now.
A few questions to consider: Are there any competitors that didn’t make it onto the original list? If so, add them! Are there certain types of information about these competitors (for example, what their strengths and weaknesses are) that you’re missing? If so, record those as well! Once you have all of the information that you need, it’s time to put it into a SWOT analysis framework.
Using the SWOT Analysis Framework
The SWOT analysis framework is a great tool for analyzing your competitors. It allows you to look at their strengths, weaknesses, opportunities, and threats from a neutral perspective so that you can understand them better (and not just what they want you to know!). Once you have completed your analysis of each competitor using this framework, consider how it might apply to your business. If there are any gaps in their strategy or areas where they could be improved upon, then these are things that you can capitalize on by offering them as part of your business strategy.
It stands for Strengths, Weaknesses, Opportunities, and Threats. Strengths and weaknesses are internal factors that you can control; opportunities and threats are external factors you cannot control.
How to Research Your Competitors
The most important thing to remember when researching your competitors is that there is no “magic bullet”. It will take time and effort, but it’s worth it! You can use the different formats below to help you gather relevant information about your competitors.
1. Do a deep dive into their online presence
Look at what they post on their website, blog, and social media accounts. What kind of content do they post? How often do they update their page? Do they have a strong visual presence (e.g., lots of photos)? What do they post about? What topics do they avoid? How often do they blog/tweet/post? What’s their tone of voice like? Is it consistent across platforms or does it vary depending on the audience being targeted (e.g., a business-to-consumer vs. B2B)? Are there any keywords that come up repeatedly in their content creation activities (e.g., titles, descriptions, tags)? If so, what do these words mean for your brand positioning and messaging? Read any reviews or testimonials that are available online; what do customers say about the company? Check out the company’s website for any contact information.
There is a lot to learn from the website and online presence of a company, so take the time to explore it thoroughly.
- What is their business model?
- Do they have an e-commerce site or a lead generation landing page?
- Can you see any examples of how they market themselves, like videos or case studies?
- What is their target audience? Are they targeting a specific industry or group of businesses?
- How do they position themselves with competitors (i.e., by emphasizing differentiating factors)?
Now, go and get some answers!
2. Collect information on your competitor’s customers
You’re not just interested in what your competitors are doing, you want to know who they’re doing it for. There’s a lot you can learn about your competitors if you start with their customers. First, look at their website and social media pages to see who they market to. Do they have any customer testimonials? If so, read them carefully (and get in touch with those customers if possible).
If you have the opportunity to talk with your competitors’ customers, do so. What do their customers like about them? What are their biggest grievances? You might not be able to get a lot of information from one or two interviews, but if you can get in touch with several different people who have used their services, it will help paint a more complete picture.
If you’re not sure where to start with this one, try using the following questions as a guide:
- Who is their target audience?
- How do they communicate with them?
- Where are they active online?
- What websites, social media platforms, and communities do they spend time on?
- What do people say about them when they talk about the company or industry?
- Are there any social media groups or forums where people discuss their products or services?
3. Check their type of partnerships or collaborations
Are they working with other businesses that are similar to yours? – Do they have any strategic partnerships with industry leaders or influencers? – If they do, how do these partnerships benefit their clients and customers?
Check their type of partnerships or collaborations. You can learn a lot about a company by looking at who they work with. If you want to see which influencers are working with them, try searching for their name on social media and seeing which influencers pop up in the search results.
Using the Competitive Analysis Framework
Building a strong competitive analysis framework is an important part of growing your business and this article shows you how to do it step by step.
You can’t grow your business without knowing who you are competing against. You need to know what your competitors are doing right and wrong so that you can position yourself better than them. If you don’t have any idea who the competition is, then how will you know if what they’re doing is working or not?
Your competition doesn’t have to be another business; it could be an industry, a country, or even a company with a similar product or service to yours.
Knowing these competitors will help you grow your own business and make sure that you’re always staying ahead of the curve. A competitive analysis framework can help you do this by keeping track of all the key aspects of how they operate, what they offer, and how they market themselves.
Conclusion
If you want to succeed in business, you have to stay ahead of the competition. The first step is knowing who they are and what they’re doing. A good competitive analysis framework can help you achieve this by giving you a deeper understanding of your competitor’s strengths and weaknesses, how they differ from your own company, and where there might be opportunities for improvement.
Your goal here should not only be about learning who they are but also understanding how they are different from yourself so that as much as possible when it comes time for consumers looking for products like yours, whether online via Google searches or offline at local businesses where customers would shop instead if given an option between two places selling similar products (like bookstores), customers choose YOU instead!
