what is competitive analysis in business plan

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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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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 Do a Competitive Analysis

Table of Contents

A competitive analysis is a tool you can use to discover where your business is doing well, where you need to improve and which trends you need to get ahead of. Complete a competitive analysis when your company isn’t moving forward as fast as you want or when competitors are securing orders from your ideal customers.

In this article, we’ll explain the concept of a competitive analysis and how to perform one for your business.

How to complete a competitive analysis

Josh Rovner, business consultant and bestselling author of Unbreak the System: Diagnosing and Curing the Ten Critical Flaws in Your Company (Lioncrest Publishing, 2020), shared with us nine steps for completing a competitive analysis.

1. Identify the products or services you want to evaluate.

For most analyses, they will be the products or services that generate the highest revenues or demonstrate the most significant potential for growth.

2. Seek direct competitors.

These companies compete for roughly the same market with comparable products or services. For example, accountants competing against other accountants.

3. Pinpoint indirect competitors.

These companies target the same market but with different products or services. For example, accountants competing against bookkeepers.

4. Examine replacement competitors.

These companies offer a different product or service, but address the same issue as your products or services (for example, apps that assist entrepreneurs).

5. Determine which parts of your competitors’ businesses are worth investigating.

These aspects could be pricing, distribution and delivery strategies, market share, new products or services coming to market, who their long-standing, highest-spending customers are, the quality of after-sales support, and which sales and marketing channels they use.

6. Research all identified competitors.

You may only find minimal accounting and operational records for most competitors, especially nonpublic companies. Other useful information – like target customers, product features, type of staff employed and price points – will be easier to find.

7. Document your research in a written analysis.

Make sure your document is substantive and actionable, but not so long that your staff won’t read it. Comparison charts and graphs are useful to help you and your team visualize your position in the market in relation to your competitors.

8. Identify areas to improve and execute the changes.

Could you improve the quality of your products or services by adding or amending a feature, lowering the price to be more affordable or improving after-sales support? Could you achieve a better ROI on your marketing budget by investing in a more capable CRM for better lead management ?

Rovner recommends including information about related trends in your market and region for a more complete picture of the entire competitive landscape. “Document what threats are out there that could have a negative impact on your business, and document the opportunities out there that you could take advantage of better than your competitors.”

9. Track your results.

Measure your sales with a profit and loss statement to determine if the changes were successful.

Competitive analysis explained

A competitive analysis – also known as a competitor analysis – is a way of evaluating how well your business and its products or services are performing compared to other companies selling similar products or services in your market.

“A competitor analysis focuses on identifying market participants positioned to encroach on your opportunity and isolates each participant’s operational strengths, substantive weaknesses, product offerings, market dominance, and missed opportunities,” said David Taffet, CEO of Petal.

Competitor analyses help you improve your business in these ways:

• Identify your strengths and weaknesses. When you know where you’re ahead of the competition, you can focus your marketing message to press home that advantage. When you know where you’re behind, you can better understand how you need to improve your products, services or after-sales to exceed your competitors.
• Understand the marketplace you operate in. You know who many of your competitors are but you won’t know all of them right off the bat and may not be aware of the latest entrants to the market . Identifying your primary competitors (as well as any upcoming threats), and how they differ from your business is key to beating them.
• Evaluate trends in your sector. Which new or improved product, service or feature are competitors offering to gain an advantage? Which trends have they seen that you haven’t yet? By examining the behaviors and actions of other companies in your marketplace, you can judge whether they’ve taken the right course and whether you should be going head-to-head with them. [Related content: Top E-Commerce Challenges Facing SMBs ]
• Plan future growth. Want to be the third-largest firm in your sector instead of the fourth? A competitive analysis gives you the information you need to get there, including how much more you need to sell, the demographics to market and any skill gaps your organization has.

Factors your competitor analysis should include

Colin Schacherbauer, executive marketing assistant at Investor Deal Room, recommended the following 10 components for an effective competitor analysis.

Feature matrix

Find all the features that each direct competitor’s product or service has. Keep this information in a competitor insight spreadsheet to visualize how companies stack up against one another.

Market share percentage

Evaluating the marketplace by percentage helps identify the main competitors in your area. Don’t exclude larger competitors entirely, as they have much to teach you about how to succeed in your industry. Instead, practice the 80/20 rule: Keep an eye on 80% direct competitors (companies with similarly sized market shares) and 20% top competitors.

Pinpoint how much your competitors charge and where they fall on the quantity versus quality spectrum.

What type of marketing plan does each competitor employ? Look at competitors’ websites, their social media strategy, the type of events they sponsor, their SEO strategies, their taglines and current marketing campaigns. [Follow these tips to create a great business marketing plan .]

Differentiators

What makes your competitors unique and what do they advertise as their best qualities? How is that different from your company?

Identify what your competitors are doing well and what works for them. Do reviews indicate they have a superior product? Do they have high brand awareness? Can you test a competitor’s products yourself to see where they are performing better?

Identify what each competitor could be doing better to give you a competitive advantage. Do they have a weak social media strategy? Do they lack an online store? Is their website outdated?

Look at where your competitors are located and the regions they service. Are they brick-and-mortar companies or is the bulk of their business performed online?

Evaluate your competitors’ objectives, employee satisfaction and company culture . Are they the type of business that advertises the year it was established or are they recent startups? Read employee reviews for further insight into competitors’ culture. [Learn the best ways to improve your company culture .]

Customer reviews

Analyze your competitors’ customer reviews, both positive reviews and negative ones. In a 5-star system, look at 5-star, 3-star and 1-star reviews. Three-star reviews are often the most honest.

Benefits of carrying out a competitive analysis

In an era of digital innovation , no business can remain preserved in time and expect to survive. Companies can disappear overnight if they don’t pay attention to new trends. A clear example of this is Blockbuster’s catastrophic error of initially dismissing Netflix’s services. Today, Netflix is a juggernaut, while Blockbuster is virtually extinct.

Even if your sector is not susceptible to this type of seismic change, it’s worth knowing what drives your clients’ decision-making processes. By keeping a regular eye on your marketplace through a competitive analysis, you’ll also be aware of these trends:

• Changes to competitors’ existing products or services that make them more attractive
• New complementary products or services from your contenders that you could also offer or alter
• The threat posed by new market entrants or transformative products

“In some cases, you may find that you are at a competitive disadvantage, in which case you may need to make a change in order to maintain your sales volumes,” Rovner said. “In other cases, you may notice that you have an advantage that could enable you to make a change that increases your sales or profit.”

How often you should perform a competitive analysis

Regular competitive analysis is key. You may want to do the analysis once a year on a large scale and quarterly on a smaller scale.

“Too many businesses do a competitor analysis early on and then neglect it once their brand is established,” Schacherbauer added. “Industries are constantly changing, and each time a new company enters your space, they are doing a competitor analysis on you. It’s important to continually evaluate your competitors.”

Analyzing your business regularly against your competitors will reveal opportunities to improve your products, better serve your target customers and increase levels of profitability. You may also want to consider using another model – like Porter’s Five Forces – to further analyze the competition.

“Understanding one’s competitors allows one to distinguish oneself from the competition, focus on the underserved market opportunities, determine the services to offer, identify the best practices to employ and isolate the worst practices and rotten players,” Taffet said.

How competitive analyses help small businesses

Your successful business today won’t necessarily be a successful tomorrow if you don’t keep an eye on the competition. By employing a competitive analysis, you can evaluate the current marketplace and where you stand compared to your competitors. With that knowledge, you can make adjustments to set your company up for continued success.

Skye Schooley contributed to the writing and reporting in this article. Source interviews were conducted for a previous version of this article.

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A Guide to Competitive Analysis: It’s Not Just about Competitors

By Joe Weller | April 16, 2018 (updated February 13, 2024)

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If you were running a cross-country marathon, wouldn’t you want to know something of the terrain and expected weather conditions before you began? The same principle of preparation applies when starting and continuing a business. It’s not enough to focus on your own production and financial goals: You need to understand what’s happening around you, how others create goods or services, the economic forecast, changes in rules and regulations, and more. In other words, you need to conduct a competitive analysis. The thought of searching for and digesting the required information may seem overwhelming, but we make it easy.

In this article, we explain how to focus your analysis by first deciding what questions you want answered. Learn how to find current and potential competitors and how many of them you need to review. Then, we cover the specific aspects of your competitors that you need to consider as well as where to find more information about them. Marketing experts weigh in on how to maintain focus during analysis. We also offer free, downloadable competitive analysis templates to start you on your own information gathering and analysis.

What Is Competitor Analysis?

Competitor analysis (CA) is a process of identifying competitors and gauging their business and marketing strategies to understand both their strengths and weaknesses and those of your own business. Competitive analysis provides a higher-level perspective of the entire marketing landscape and competitive intelligence.

“Competitive analysis is the process of analyzing all collected information to derive some insight for reducing risk and making better decisions,” explains competitive intelligence expert and author Babette Bensoussan .

“It is about your broader competitive environment,” she says. “I always remind my clients that competitors make up only one element of a business’s competitive environment. Other elements include government, technology, buyers, and suppliers, to name a few that impact how well you can compete.”

What Is the Purpose of a Competitive Analysis?

Researching your competitive landscape is essential to business growth and survival, and helps you offer better products or services to customers. You should gain an understanding of how customers view your company, what you’re doing right, and what you’re doing wrong. Therefore, competitive analysis forms a crucial part of marketing plans to help you understand what differentiates your product or service. Particularly when applying for funding, competitive analysis provides valuable insight into business plans. However, competitive analysis offers much more:

• Branding possibilities
• Insight into how competitors design products and messages
• SEO possibilities
• CRO (conversion rate optimization)
• GTM strategies
• User experience (UX) advantages of your and others’ products and websites
• Gaps in the market
• New products and services to develop
• Market trends

According to a Conductor survey , 60 percent of marketers don’t feel proficient in competitive analysis. Many don’t practice it on a regular basis. Knowledge derived from these exercises is critical, and you need to assess competition regularly. Nevertheless, marketing departments often skip competitive analysis, which leaves them with a fragmentary understanding of the landscape and competitors. Being proactive can help you anticipate and prepare for competitor developments and provide you with the agility to take advantage of changes.

According to Bensoussan, “In today’s world of constant change and information overload (whether the information be real or fake), it is critical for any business person to understand the competitive landscape and the forces that impact the profitability and viability of a business.”

What Should Be Included in a Competitive Analysis?

In most cases, a competitive analysis contains a few basic sections, which may vary depending on the size and form of your company and the focus of your analysis:

• A list of your main competitors
• An overview or what you know about them
• Who their target customers are
• A list of their products or services
• What media they use to market their goods and services
• Their current and past marketing strategies
• Their value proposition and effectiveness
• An analysis of all of the strengths and weaknesses of your competition (and your own company)
• An overview of the strategies being used by the competition to achieve their objectives
• An overview of the market and projections for the future

How to Prepare for a Competitive Analysis

One of the crucial prerequisites for a successful competitive analysis is an open mind. Check your beliefs at the door — what you think about your company, your customers, or your competitors isn’t necessarily true. That can be a good thing.

In addition, it is vital to understand why you are conducting an analysis. What are your goals for the business? What are your goals for this analysis? “Always, always be very clear as to what the decision you will be making is all about,” advises Bensoussan. “If you are not clear about your decision, then you will never know if you have good competitive analysis or just some more information.”

She offers these two questions as examples of how different the impact of each answer can be: “Tell me who’s who in the [manufacturing] of zippers?” versus “Should I enter the zipper-manufacturing industry, and can I achieve a return on investment of, say, 15 percent in three years?”

“Which question would help you the most in delivering good quality CA? Which outcome do you think would provide the most value?” Bensoussan asks.

Companies often enlist the help of outside consulting firms dedicated to conducting competitive intelligence research. Guidance on competitive intelligence support, such as database information, software platforms for market program tracking, and more is available through the Society of Competitive Intelligence Professionals .

Competitor Analysis Frameworks

Over the decades, marketing gurus have developed or advocated several competitive analysis frameworks. Here are six well-known methods to consider.

• Porter’s Five Forces Model: First published in 1979 by Harvard Business School professor Michael Porter, the Five Forces model provides a view beyond competitors to factors in your industry landscape that may threaten or strengthen your position. The Five Forces include the following:

• Potential New Entrants: Consider how much money, time, and effort it would take for a company to displace you.
• Competitive Rivalry: Determine who your competitors are, who the closest competitors are, and their products, prices, and quality. Fewer rivals mean more opportunity for your unique qualities to shine; many rivals mean more competitors to steal your customers and potentially better deals to lead customers elsewhere.
• Suppliers: The more potential suppliers you have, the better for you. Consider how having fewer suppliers might impact your operation.
• Buyers: If you have many customers, you have the power. Otherwise, buyers can negotiate more advantageous deals elsewhere or find sources other than yours. Consider how you would treat that situation.
• Substitutes (or Complements): A competitor could create a product or model that replaces yours. On the other hand, a new product or service could also complement yours, which would create a symbiotic sales situation. Complements are sometimes considered the sixth force in the model.

Porter stressed the importance of not confusing these constants with temporary disruptions, such as technological innovations or government interventions in industry.

You can download the Five Forces model below to answer your own questions about an industry or business proposition.

Download Five Forces Model

Excel  |  PDF

Industry Life Cycle Overview: Both industries and individual products have life cycles, which reflect the state of sales, whether robust or diminishing. Understand which stage of the life cycle your industry, company, or product is in to help target your marketing efforts. Product life cycles contain such stages as these:

• Introduction: At the introductory stage, a new industry or product is not well known or proven. It is usually marketed to a few early adopters. Because resources focus on product development, testing, and refinement, few or no profits accrue. Marketing focuses on explaining the product, creating awareness around it, and establishing a niche.
• Growth: As awareness grows and the industry or product becomes established, profits may also grow. However, in the growth stage, rival products may also appear. Although improvements require funds, production efficiencies may also develop. Some products have only a short growth phase. For example, a particular fashion may last for only one season. Other products experience a long or extended growth phase, such as software products, which continue their usefulness through upgrades. During the growth stage, marketing centers on differentiating the product, so it stands out from competing products.
• Maturity: In the maturity stage of a product or industry, sales may expand, but at a less accelerated rate. Fewer competitors may dominate the market and may attempt to differentiate on quality or increase sales by touting low costs.
• Saturation: You reach the saturation stage when every customer who could buy the product already owns the product. A lack of innovation or competition from a superior product could result in saturation.
• Decline/Termination: Industries and products decline for several reasons. Innovations may overtake them and render them obsolete. Businesses and product lines may fail to upgrade and innovate. At the decline or termination stage, companies may fold, continue in a smaller market, or merge with larger, successful businesses.  

Strategic Groups Analysis: You perform strategic groups analysis on companies within a business sector, such as automobiles, to see how they vie for their share of consumer expenditure. By dividing companies into strategic groups, you can understand how businesses of different sizes behave in the marketing landscape. Businesses within groups tend to be competitors, whereas businesses in other groups are related but not competitive. For example, running shoes and high-end women’s dress shoes are in different groups. Analyzing companies in this way can also reveal other significant information: direct competitors and their basis for competition; if and how a company can move to another group; and strategic problems and opportunities. Strategic groups are usually plotted on an x-y axis, where two highly relevant criteria form the axes. Here are some examples of criteria:

• Brand ownership
• Company size
• Capacity utilization
• Cost structure
• Geographical market segmentation
• Marketing activities
• Ownership structure
• Sales channels
• Product diversity
• Product quality
• R&D capability
• Vertical and horizontal integration

First, plot the companies where you think they belong on the graph. Now, with all companies plotted, create groupings. If you want, you can use larger or smaller circles to indicate market share. To gain greater insight, perform a Five Forces analysis on them, or consider the mobility barriers that prevent companies from shifting to other strategic groups.  

SWOT: Perhaps one of the most commonly addressed marketing analyses is SWOT (strengths, weaknesses, opportunities, and threats). In essence, SWOT represents what competitors do and do not do well. As you look at SWOT for competitors, also consider it for your own products and services.

• Strengths: What do they do better than you? What are they known for? Is their pricing, inventory, convenience, and level of service better than yours?
• Weaknesses: How do they fall short of your company’s standards? Can you leverage their shortcomings to improve your standing with customers?
• Opportunities: What in your competitors’ landscape can you exploit to your advantage?
• Threats: What in your competitors’ landscape threatens their business position?

Note that strengths and weaknesses focus on internal characteristics, while opportunities and threats concern external forces. SWOT can be performed separately, but it may provide a useful frame for studying a business’ products and services, marketing, and sales.  

Competitive Array: Competitive arrays, also known as competitive matrices , provide a way to quantify characteristics that may be unquantifiable. For example, if company A sells 500 widgets and company B sells 250, it’s clear which company sold more. But how do you quantify the attractiveness of online and print media or innovation? Creating the competitive array can be an individual or group exercise. To start, list your competitors across the top of your writing surface. In the left-most column, list important characteristics. Next, create a column for weighting the importance of each characteristic so that the sum of the characteristics totals one. The higher the weighting, the more important the characteristic (you may have a few characteristics with the same weight). Next, grade each competitor for each characteristic on a scale, such as from one to 10. Now, multiply the grade by the corresponding weight.  

Competitive Value Proposition Analysis: The characteristics of a value proposition are exclusivity, clarity, and credibility. This method concerns how unique the product or service is, how clearly the product message is conveyed, and whether the message is credibly supported by evidence, such as testimonials, statistics, or test results. Because customers remember only a few key advantages of your product from your media promotion, the main value proposition must be correct and clear and mesh with your actual competitive advantage. To figure out how to differentiate your company, you must determine how competitors differentiate themselves from each other. POPs (points of parity), PODs (points of difference), and POIs (points of irrelevance) help you dissect value propositions.

• Points of Parity (POPs): These are elements of customer benefit that both you and your competitors offer.
• Points of Difference (PODs): These are features of customer benefit that you offer but competitors don’t. Keep in mind that not every point of difference is significant to consumers.
• Points of Irrelevance (POIs): These are characteristics that customers don’t care about.

Your unique value proposition (differentiating characteristics) doesn’t need to appeal to every customer. Don’t make your value proposition too general. You can’t be all things to all customers, just as you can’t do what your competitors are doing.

Otherwise, there's no differentiation. You end up being like teenagers, everybody in the same jeans," says Sonia Schechter, Chief Marketing Officer of Marxent , a provider of virtual reality and augmented reality apps for furniture retailers. Therefore, target your message.

Discover your points of parity by using our POP template.

Download Points of Parity Template

Excel  |  Word  |  PDF

Who Are Your Competitors?

As a first step in competitive analysis, marketing guides typically suggest determining who your competitors are. Competitors can be divided into groups of direct competitors, indirect competitors, and future competitors.

• Direct Competitor: These are companies who sell a direct substitute for your product, operate in the same geographic area, and/or offer the same goods (such as groceries) to the same market. Ask who your customers would buy from if you weren’t in business.
• Indirect Competitor: These are companies in the same geographic area whose products occupy the same general, but not specific, category as your own (e.g., a general bakery versus a designer cake store). Indirect competition satisfies the customer’s need for a particular product or service, although that product or service may be different from yours. Similar products operating in different market segments do not represent direct competitors. For example, a high-end seafood restaurant doesn’t compete with a burger place.
• Future Competitor: Future competitors may currently be indirect competitors who change and expand solutions. In the bakery example, the general bakery could hire a high-end designer to compete with the specialty cake maker. Or, the designer cake store could branch out into breads and muffins.

It may be difficult at first to envision what types of organizations you need to analyze and whether you need to analyze all competitors.To identify competitors, ask yourself who your customers would buy from if your product did not exist. Perhaps even more important, consider who your customers think your competitors are. How many competitors you review depends: If only a few companies do what you do, analyze everyone. If you have many competitors, use Pareto analysis to focus on the critical 20 percent. Larger businesses may analyze the top 10, whereas a small business can focus on three. Disregard online competitors unless you plan to sell online.

‌ Download Pareto Chart Template - Excel

How to Find Current Competitors

Some competitors may seem obvious, but sleuthing can reveal challengers you weren’t aware of.

• Google search for a product or service similar to yours. Consider the companies in paid ads and organic returns.
• Try SEMrush to check which domains are using which keywords.
• Ask your current customers who they would choose besides you.
• Check Alexa, Google Trends, or SimilarWeb for general estimates on the popularity of domain names and keywords.
• Review Dun & Bradstreet for new incorporations.
• Consult Derwent for new patent information.
• See who has booths at trade shows.

How to Find Potential Competitors

While you consider the current playing field, you must also keep your eye on what’s coming around the corner. These are the future new entrants in your niche. Consider who might start a  business that would compete with yours. New competitors can be found in related markets, related technologies, or related products. Companies from other geographical areas with similar products may begin to sell in your area, and former employees or managers can start their own companies based on the themes of your business. In addition, consider the following conditions that may encourage competition:

• A company gains competitive advantage.
• Buyers are dissatisfied with suppliers.
• An unmet demand for goods exists.
• Few major barriers to entry exist.
• The industry offers high profit margins.
• The industry offers unrealized growth potential.
• Competitive rivalry is not intense.

It’s Not All about Competitors ( Competitive Doesn’t Always Mean Competitor )

Depending on what your product or service is and where it is in its life cycle, a competitor focus may not be optimal. For example, for emerging technologies, no true competitor may exist.

“Looking too closely at competition is a massive distraction,” Schechter notes. “If you’re selling a commodity or established product, such as a drugstore, which sells the same thing anywhere, you’d be looking at specific issues, like price, location, and assortment.”

Schecter says marketers themselves often don’t understand that what the competition is doing is not important: “Successful marketing is how you define yourself in the landscape. People don’t care about a feature-by-feature description, or even one feature. They buy the package. They like you. You’re different or you’re solving a particular problem. A new business must define and lay out the landscape for the customer.”

To succeed, understanding what customers want is key. “Marketers have nuanced detail, and customers don’t care about that detail,” Schechter continues. “But, you have to listen to their questions and engage in dialogue with them to gain real understanding,” she points out. She cites Apple’s promotion of the camera in the first iPhone as an example of marketers understanding what — out of thousands of potential functions — was important to consumers. “B2B marketing is the same. It’s about listening to customers, figuring out how they’re shopping, and trying to see through their eyes,” Schechter emphasizes.

“Obsessing over competition can get you off track. If you’re listening to customers, you’ll build the right product. But you don’t need to build your dreams on other people’s ideas,” she concludes.

Where to Find Information for a Competitive Analysis

Remember that every department of your business is a potential source for information, including the following areas:

• Sales: Questions for potential, current, and lost customers
• Research and Development: New patents
• Purchasing: Suppliers
• Marketing: Customers and other consumers

Once you’ve determined who your competitors are and what you want to learn about them and from them, you need to go information hunting:

• Visit offices or brick-and-mortar stores. What do they look like? Who’s there?
• Get financial and organizational information from public filings and from sources like Hoovers, Manta, and Dun & Bradstreet.
• Monitor PR Newswire for new developments and changes.
• Some marketing platforms may actually include information about your competitors.

Interviews and Research Surveys

Interviewing competitor customers and consumers who know little about your business is important to overcoming your preconceptions about the business landscape. You probably have specific questions in mind, but here are the basics:

• Why are you shopping for a solution?
• What were the main reasons you chose the company you did?
• Ranked from most important to least important, what are your five shopping criteria?

Media Scanning or Competitor Content Analysis

You can learn much about competitor products and messaging by scanning media. Media doesn’t just include online content (web pages, tweets, and Facebook posts) — it also includes such traditional marketing collateral as white papers, case studies, and data sheets. Moreover, consider reference materials, such as LexisNexis and Hoovers, and trade, business, or news publications for ads, news stories, and press releases. Media and content can reveal not only new products and new branding, but also new positioning and segmentation strategies, pricing, target markets, and promotion strategy.

What Information to Search for in Competitive Analysis

The approach to analysis depends on the questions requiring answers. To organize your analysis, divide it into three aspects: product or services, marketing, and sales. Each aspect contains its own questions and means of analysis.

Download Competitive Analysis Checklist

Products and Services

Your understanding of products and services must be thorough. Investigate the complete product or service line. Try to understand who your competitors’ customers are and what they need. Look at their pricing strategy and see if it differs for online and brick-and-mortar stores. Also, consider how they differentiate from their competitors.

Tracking competitor sales processes can involve more legwork. For public companies, SEC filings provide some financial information about growth or contraction, but, for private companies, information is less readily available. Information about sales channels may be easy to find through a look in the phone book or online. You can also gather details about the sale process by asking current customers why they chose your product over others. You can also acquire valuable information by following up even after you lose a sale in order to understand the customer’s thinking. What do their partner resales programs look like? What are their revenues versus sales volume?

Marketing Efforts in Competitive Analysis

What does the competitor marketing plan entail? How do competitors invest marketing efforts? What can you do even better? A variety of approaches can help you define competitor marketing strategy.

When you identify marketing assets, take a reasonable sample of items — no need to review all of them. Just remember to keep samples consistent among competitors. Also, when reviewing items, consider the quality of the collateral. It should appear professional, with no typos, and in the formal, professional, idiomatic voice. In addition, a solid library of resources, such as consistent blog posts, whitepapers, case studies, videos, webinars, and podcasts may point you to themes and leads you should follow.

E-Marketing Strategy Competitive Analysis

Few businesses today can function without a web presence that helps generate traffic and inquiries or purchases. Some statistics say that prospective buyers visit a website as many as nine times before purchasing and, depending on the product, visit multiple sites before purchasing. Forrester research after 2010 suggests potential customers visit three sites on average before buying. The more sites visited, the more money the customer intends to spend.

Therefore, understanding how your site compares to your nearest competitors can be helpful. To drive eyes to websites, online purveyors use search engine optimization (SEO) to employ the keywords most likely to garner high search ratings in Google (and other search engines). Marketers frequently also use SEM (search engine marketing) to promote a business or product by increasing visits to a website through paid keywords. Look at how saturated their content is with keywords and where they use keywords, whether in H1 and H2 tags, page titles, content, or links. Also, look at the difficulty level of their keywords.

Consider the usability of the steps in the sales funnel as well as the navigation. What do the  landing pages say? Also, look at backlinks (i.e., links from other pages to your competitor’s page) to your web page. See how many backlinks exist — and from which pages — to understand if this is something you can improve for your website.

Structure is important, but quality content also matters. Online marketing collateral appears as blogs, white papers, ebooks, case studies or user stories, videos, webinars, podcasts, and more. But words and pictures themselves are not valuable if they don’t offer any unique information or concise approaches to existing knowledge. Check whether content is shared and which topics attract attention, or, conversely, what that content and those topics are linked to. What do readers comment on, if they do comment? Who else is sharing what your competitors are publishing?

Social Media

Certain social media platforms appeal to some audiences more than others. The channels a company favors can reveal clues to the demographics of their target market. Make note of what social media buttons they include on pages and where on the page they include them.

Software Tools for Understanding Online Competitors

Besides monitoring content, you can monitor the mechanics of competitor websites to glean more data about how marketing strategy and product offerings are changing. Software helps to automate these investigations for you. Following are some of the many products available:

• BuiltWith : See what platform was used to build a page.
• Ghostery : Find trackers on a website.
• SEMrush : Discover company rankings, organic keywords, AdWords, and analyses of backlinks.
• Versionista : Track web page and website changes, SEO changes, and more.
• Visualping : Monitor webpage updates.
• SpyFu : Find competitor keywords and AdWords, including AdWord and keyword variations and history.
• iSpionage : Track PPC and other keywords in competitor campaigns.
• SimilarWeb : Compare competitor websites to your own.
• Heatmaps: Use large amounts of data to provide a visual representation of how users interact with a website. Heatmaps can indicate where users click and look and for how long. Levels of intensity of activity are usually displayed through colors.
• Session Recording Tools: Record user browsing sessions. Session recording tools can yield a wealth of rich data, but raise some privacy concerns.
• Tag Management Systems: Advanced e-marketing implementations use tags to aid analysis and reporting. Tags are snippets of code that are usually added to the <head> tags of a web page.

Web Page User Testing for UX in Competitive Analysis

It’s essential to understand how consumers approach your website, especially for web-based products and marketing. Allow customers to test your site, and even view it yourself from a customer’s perspective, to help eliminate unnecessary steps and streamline your sales funnel. Doing so can also help to illuminate the opportunities for upsells and cross-sells.

Limiting the analysis to two or three competitors offers a manageable amount of insight into usability, which helps you avoid reviewer overload and confusion. For impartial results, don’t reveal to test participants which website is yours.

Ask test participants to enter words in Google or list the words and phrases they would use to find a certain product or service. Not only does this yield potentially fruitful keywords, it also indicates whether your site appears in search returns.

To get a sense of each participant’s impression, have them look at each website for five seconds and answer the following questions:

• What three words would you use to describe the site?
• What is it about? What products or services are offered and for whom?
• How does this website make you feel?

To understand their process, give participants a task to perform on each website. Ask them to answer the following questions:

• What was the worst thing about your visit to this website?
• What aspects of the experience could be improved?
• What did you like about the website?
• What other comments do you have?
• Which website did you like best and why?

How Much Data Do You Need in a Competitive Analysis?

It may seem overwhelming to sit down and search out your competitors’ business situations. That’s why setting a clear intention before you begin an analysis is so important. In addition, Babette Bensoussan advises that you don’t need to analyze everything:

“Over the years, I have learned that once you have 70 percent of the information required for your chosen analytical technique, you can proceed to the analysis,” she explains. “You never really need all the pieces of a jigsaw puzzle to tell you what the picture is. This same philosophy applies to analysis. More information may not yield better insights nor improve predictive accuracy.”

How Do I Write a Competitor Analysis Report?

The format of your analysis depends on individual choice and the audience. You may also choose to use one kind of format while you work through the analysis, and another when you present findings.

Take a sheet of paper. In the left-most column, write the names of your closest competitors. Across the top of the page, list the main attributes of each product, such as target market, price, size, method of distribution, extent of customer service, prospective buyers, and so on. Then, make a check or a note for each attribute the competitor fulfils. An additional column can contain information about service or product availability, the website, a toll-free phone number, and other general information.

A competitor profile helps you make a detailed record about each competitor, and also allows you to capture snapshots of a business over time. Consider listing some of the following information:

• Location of offices and factories
• Key personalities, history, and trends
• Ownership, organizational structure, and corporate governance
• Number of employees and skill sets
• Management and management style
• Compensation, benefits, and retention rates
• Plant capacity, utilization rate, age of plant, capital investment
• Product mix per plant and shipping logistics
• Products and services
• Depth of product line
• New products developed and success rate
• Research and development details
• Brands and brand loyalty and awareness
• Patents and licenses
• Quality control conformance
• Cash flow and liquidity
• Profit growth profile
• Method of growth (organic or acquisitive)
• Objectives, mission statement, growth plans, acquisitions
• Marketing strategies
• Segments served, market shares, customer base, growth rate, and customer loyalty
• Promotional mix, promotional budgets, advertising themes, ad agency used, online promotional strategy
• Distribution channels (direct and indirect) and exclusivity agreements

Here is a step-by-step process for writing a competitor analysis report:

• Write down your competitors.
• Write what you know about them already.
• Discover who their target customers are.
• Discover their pricing methods.
• Investigate their marketing strategy.
• Figure out their competitive advantage.

Download our competitive analysis landscape template to get ideas for gathering information and reporting analysis results.

Download Competitive Analysis Landscape Template

Excel  |  Word  |  PDF  | Smartsheet

Competitive Analysis for Small Businesses

Small business can be competitive. Beyond meeting financial targets, you need to understand the competitive landscape (short of allowing it to distract you) and then target a niche market.  Many of the same analyses that apply to large businesses also apply to small businesses. However, if this is your first business, or if you don’t have a marketing background, you may want to pay attention to a few aspects.

First, it is helpful to acknowledge how much or how little you know about your competitors by sketching a profile of your top two or three competitors. Next, try to learn all you can about your competition.

You can use the following template to perform a competitive analysis for your small business.

Download Small Business Competitive Analysis Template

Word    |    PDF

What Is a Competitive Analysis in a Business Plan?

Competitive analysis should play a key role in the preparation of a business plan. Particularly if you seek outside funding, your knowledge of the competitive landscape will show your understanding of your business and the market forces at play.

When starting a business, consider all the analysis questions described above, but pay particular attention to issues of growth and opportunity. Consider addressing the following circumstances:

• Whether current competitors target a specific niche or offer products to the mass market
• If, how, and why competitors are growing or reducing business
• How your company will be stronger than competitors and better able to exploit changes in the market landscape
• What you will offer customers that no one else does (your competitive advantage)

In the business plan, describe the competitive landscape as it relates to direct and indirect competitors and opportunities and risks, emphasizing your competitive advantage. This competitive analysis can form the basis for your first marketing plan.

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Competitive Analysis

Understanding customers is not enough. Firms gain a competitive advantage only when they do better than their competitors in satisfying the target consumers’ needs.

Competition is one of the most inevitable forces in the business world. No matter how big or small, a firm has competitors in the industry and the strategies of these competitors affect its business strategy.

Ever since the seminal works of Porter (1980, 1985), sophisticated competitive analysis is considered a crucial cornerstone of the strategic decision process. Identifying competitors, evaluating their strategies, and determining relative strengths and weaknesses are crucial steps to business success.

What is a Competitive Analysis

Competitive Analysis is the process of identifying key competitors, assessing their objectives, strategies, strengths and weaknesses, and reaction patterns and selecting which competitors to attack or avoid.

In strategic management, “competitive” analysis is often interchangeably used with the term “competitor” analysis which is a bit narrower in scope compared to the former. [1]

Importance of competitive analysis

The following reasons have led to a greater need for competitive analysis, making it a necessity rather than a desired goal:

Cheap and quick access to information

Keeping key competitive information out of sight from competitors has become difficult. With the rapid rise of information access, big data tools, and enhanced analytics, competitor’s reaction times have shrunk.

Changing sociocultural value systems

It is now easier than ever for a competitor to attract a firm’s talent as companies show less loyalty to their employees, and by extension, employees show less loyalty to their employers. Keeping proprietary information safe has become increasingly difficult.

Traditional competitive structure and advantages no longer work

Prominent industries of the twentieth century were resource-based (such as manufacturing, steel, telecom etc.) and could achieve a competitive edge through scale economies, segment entrenchment, and first-mover advantages.

Strong entry barriers such as capital, machinery and know-how kept competition at bay. Most of the rivals were known and disruptions were rare.

In contrast, modern businesses depend on factors such as intellectual property, data, innovation, knowledge, brand equity, proficient R&D teams, and skill sets.

Disruptive technologies can swiftly remove entry barriers while rendering well-established business models obsolete. For example, film-based photography was replaced by digital cameras which are now replaced by smartphones.

While the generic strategies of cost, differentiation, and focus described by Michael Porter are still conceptually fruitful, they are hard to achieve and sustain.

Customers are better informed and have more sophisticated needs

With access to significantly more information, customers are less likely to be swayed

by an emotional appeal. They perform hard-nosed research before striking a deal, especially

with big-ticket items.

As with B2B markets, buying habits are less ingrained, and purchases are increasingly based on specification, cost, and value. Bad news travels fast, and the presence of customer pressure groups, Internet blogs, and vociferous word-of-mouth channels can quickly damage a brand.

Performing competitive analysis

Competitive analysis involves the following steps:

1. Identify the company’s competitors

Defining broadly, a firm’s competitors are all those who fight for the same customers’ spending power.

On the surface, identifying competitors can look straightforward. For example, Boeing knows Airbus is its strongest competitor, and Intel knows it is competing with AMD.

But as we will see, there are different kinds of competitors and identifying them can be tricky as not every competitor is immediately obvious:

Brand competitors

These are the most obvious ones. They are firms that offer similar products or services to the same customers at similar prices. For example, Ford will consider Toyota as its competitor but not Rolls-Royce even though they sell similar products because the latter sells at a very different price point.

Product competitors

This is a much broader way of defining competition and includes firms that make the same product or class of products.

For example, Volvo would consider not only other car manufacturers but also the makers of trucks, motorcycles, or even bicycles, as they belong to the same category of products.

Industry competitors

These are competitors that offer similar products or services but differ in some important ways, such as organization size, the precise type of product offering, or the target market.

Industry competitors offer a product or class of products that are close substitutes for one another, thus making the demand interlinked.

The rise of Netflix (and the fall of Blockbuster) is a classic example of industry competitors.

In 2004, Blockbuster’s physical-store-based DVD rental business did great until Netflix introduced the mail-order subscription model followed by online streaming which eventually bankrupted Blockbuster.

Form (or market view-based) competitors

Form competitors offer products or services which fulfill the same customer needs as the focal firm even though the products or services are very different in form or technology. They address the same unmet needs of the customers.

For example, Heineken might consider Carlsberg, Budweiser, and other brewers as its competition. But the primary customer “need” it addresses is “social drinking”. Hence, Heineken’s competition could come from a very distinct class of products, such as energy drinks, alcopops or health drinks that could satisfy the same need.

The form-based concept of competition opens a company’s eyes to a broader set of actual and potential competitors and leads to better long-run market planning.

Taking a customer-oriented view of the market is hence critical to avoiding ‘competitor myopia’ where the immediate competition blinds a company to latent competitors who can destroy the old ways of doing business.

Generic Competitors

As customers have limited time and money to spend, competition can sometimes arise from unrelated areas. For example, a fine dining restaurant could compete with a movie theatre for the same share of customers’ time and, hence, money.

Other ways of classifying competition

A firm’s competitors can also be classified as direct, indirect, and future competitors.

• Direct competitors are businesses that offer identical or similar products or services as the focal firm. These represent the most intense form of competition as customers often compare prices, features, and deals as they shop.
• Indirect competitors are businesses that offer products and services that are close substitutes. They target the firm’s markets with the same or similar value proposition but with a different product. Industry and form competitors usually fall in this category.
• Future competitors are existing companies that are not yet in the marketplace that the firm intends to occupy but could move there at any time. Indirect competitors are obvious candidates for future competition.

A rule of thumb

While almost every other firm could appear to be a potential competitor in some way, in practice, a firm cannot dedicate resources to monitor all of them.

Studies have shown that the biggest competitive threat is likely to come from firms that have some or all the following characteristics:

• They sell to the same type of customers as the focal firm.
• They have similar or lower-cost supply and distribution channels.
• They have similar or superior technologies.
• Their target market significantly overlaps that of the focal firm.

To make the best use of their resources, firms can use this as a rule of thumb to narrow their focus on the most likely competitors.

2. Determine competitor’s objectives

While the high-level objective of all competitors is to maximize profits, the actions through which they achieve it can vary.

Firms can differ in the emphasis they put on short-term versus long-term objectives. Some are oriented towards ‘satisfying-customer’ rather than ‘maximizing’ profits. Hence, marketers must look beyond competitors’ profit goals as competitors can have a mix

of objectives, each with differing importance:

Knowing a competitor’s objectives reveals whether it is satisfied with its current situation and how it might react to competitive actions.

For example, a company that pursues low-cost leadership will react strongly to a competitor’s cost-reducing manufacturing breakthrough vs. an increase in advertising spend.

3. Identify competitors’ strategies

Competitors can be sorted into strategic groups – firms that follow the same (or similar) strategy in a given target market.

For example, in the auto industry, Ford, Honda and Toyota belong to the same strategic group producing medium-priced mass-market cars supported by good service. On the other hand, brands like Mercedes, Maserati and Jaguar belong to a different strategic group. They produce a narrower but premium line of cars and charge more.

Strategic group identification can provide important insights – if a firm intends to enter one of the strategic groups, it must develop some strategic advantage over existing players.

While competition is most intense within a strategic group, it can also extend among groups due to several factors:

• Some strategic groups may appeal to overlapping customer segments.
• Customers may not see much difference in the offers of different groups.
• Members of one strategic group might expand into new strategy segments. For example, the Lexus brand of Toyota competes with the likes of Mercedes.

A company needs to look at all the dimensions that identify strategic groups within the industry. It needs to know each competitor’s product quality, features and mix, customer services, pricing policy, distribution coverage, sales force strategy, and advertising and sales promotion program.

4. Assessing competitors’ strengths and weaknesses

The ability of a competitor to carry out strategies and reach its goals depends on its resources and capabilities. Hence, marketers need to identify each competitor’s strengths and weaknesses.

But collecting this data can be hard.

For example, industrial goods companies may find it hard to estimate competitors’ market shares because they do not have the same syndicated data services that are available to consumer-packaged goods companies or e-commerce firms.

Companies normally learn about their competitors’ strengths and weaknesses through

secondary data, personal experience, and hearsay. Primary marketing research with customers, suppliers and dealers is also a good way to collect information.

Benchmarking [3] is another, such tool that helps a company identify its relative strengths and weaknesses. It is the process of comparing a company’s products and processes to those of competitors or leading firms in other industries to find ways to improve quality and performance.

In searching for competitors’ weaknesses, a company must challenge its assumptions for validity. For example, a competitor can believe they produce the best, but this may no longer be true.

Some competitors can also be victims of beliefs that are no longer valid – for example, ‘customers prefer full-line companies’ or ‘the sales force is the only important marketing tool’.

Identifying and understanding these assumptions can enable a company to capitalize on them strategically.

5. Estimating competitors’ reaction patterns

Marketing managers need a deep understanding of a given competitor’s mentality if they want to anticipate how that competitor will act or react.

A competitor’s reaction could depend on several factors, such as:

• A belief that their customers are loyal.
• They may be slow to notice a move.
• Lack of resources to react.
• Choosing to react only to certain types of assault (For example, to price cuts but not aggressive advertising).

In some industries, competitors live in relative harmony; in others, they fight constantly.

For example, social networks compete aggressively for users. These platforms are quick to borrow features from one another. Instagram copied the “stories” feature from Snapchat. [4] Similarly, YouTube copied “shorts” from TikTok. [5]

Having a fair idea about competitor’s reaction patterns gives clues on how best to attack or how best to defend the company’s current positions.

6. Choosing competitors to attack or avoid

Intelligence gathered in previous steps equips a company to decide which competitors to attack or avoid.

Strong or Weak Competitors

Most companies prefer to compete against weak competitors. This requires fewer resources and less time. But in the process, the firm may gain little.

In contrast, strong competitors can be good “grinding stones” for sharpening a company’s abilities and providing better returns when successful.

Customer Value Analysis [6] which involves identifying major attributes that customers value is an effective tool to assess what competitors to choose.

The key to gaining a competitive advantage is to examine how the company’s offer compares to that of its competitors in each segment. This way, the company can find a place in the market where it meets the customers’ needs in a way that rivals can’t. This is the strategic sweet for a company to be in.

Close or Distant Competitors

Most companies compete with close competitors, i.e., firms that closely resemble them.

Given the strategic advantages they bring (see below), companies must avoid aggressively ‘eliminating’ close competitors.

• They help increase the total demand
• They share the costs of market and product development
• They help legitimize and establish new technology
• Some serve less attractive segments or lead to more product differentiation
• They improve bargaining power against labor or regulators

Good or Bad Competitors

“Good” competitors play by the rules of the industry. They favor stability, set reasonable prices, motivate others to lower costs or improve differentiation, and accept a reasonable level of market and profit share.

In contrast, bad competitors take huge risks, play by their own rules, and disrupt the market.

Elon Musk-backed SpaceX is a classic example of bad competition. In an otherwise mature and stagnant industry with limited players, SpaceX drastically lowered the cost of spaceflight through innovations such as reusable stages and fairings.

NASA’s space shuttles, which were retired in 2011, cost an average of $1.6 billion per flight, or nearly $30,000 per pound of payload. In contrast, SpaceX’s Falcon 9 rocket typically charges around $62 million per launch, or around $1,200 per pound of payload to reach low-Earth orbit. [8]

Finding Uncontested Market Spaces

Firms can also go for a relatively bolder and distinct strategy, best known as the “ Blue Ocean Strategy ,” by creating products and services for which there are no direct competitors. [9]

Such strategic moves, termed ‘value innovation’ lead to powerful leaps of value creation for both the firm and its buyers, generating new demand and rendering rivals obsolete.

Tools and techniques for Competitive analysis

The importance of understanding competitors has been widely acknowledged in the industry as well as academia. This has led to the development of numerous tools and techniques for competitive analysis.

Some of the most commonly used tools and techniques are briefly discussed:

SWOT Analysis

SWOT Analysis is a strategic audit tool that takes both internal and external perspectives to distill the findings into critical organizational strengths, weaknesses, opportunities, and threats:

SWOT analysis facilitates competitive analysis by pinpointing an organization’s internal strengths and weaknesses and allowing for an objective assessment of its competitive capabilities. It also highlights external opportunities and threats, offering insights into the competitive landscape.

Growth-Share Matrix (BCG Matrix)

The Growth Share Matrix is a portfolio management framework that helps companies decide how to prioritize their different businesses. It classifies a company’s business portfolio into four categories based on industry attractiveness (growth rate of that industry) and competitive position (relative market share):

By assigning each of the company’s businesses to one of the above four categories, the BCG matrix helps decide where to focus resources and capital to generate the most value, as well as where to cut losses.

Since the matrix is built on the logic that market leadership results in sustainable superior returns, the market leader obtains a self-reinforcing cost advantage that competitors find difficult to replicate.

GE McKinsey Matrix (Nine-Cell Matrix)

The Nine-cell matrix , while similar to the BCG matrix, is a more sophisticated business portfolio framework.

Unlike the BCG Matrix which has been criticized for its reliance on a single dimension for analysis, the Nine-cell matrix uses multiple variables to determine the two dimensions: Industry attractiveness, and Competitive strength.

The horizontal axis of this matrix represents competitive strength and is divided into High, Medium, and Low. It measures the business’s competitiveness among its rivals and helps indicate a business’s ability to compete in the industry.

Porter’s Five Forces model

In 1979, Michael Porter developed the Five Forces model – a framework for analyzing a company’s competitive environment. The model helps determine the forces that shape an industry structure and the level of competition in that industry.

Five Forces work well for businesses that are starting or looking forward to starting a new marketing strategy. It gives a better understanding of the industry’s competitive structure.

Value Chain Analysis

Value Chain Analysis forms of competitive advantag is a means of evaluating each of the activities in a company’s value chain to understand how each step in the process adds value.

The tool compels a company to question the importance of each of its activities by benchmarking them against competitors. The process helps realize various forms of competitive advantages, such as cost reduction or product differentiation.

Space Matrix

The S trategic P osition and Ac tion E valuation matrix (SPACE matrix) is a tool that focuses on strategy formulation specifically related to the competitive position of an organization.

The matrix is broken down into four quadrants (see below), each of which suggests a different type or nature of a strategy.

The matrix analyzes functions based on two internal (Financial strength and Competitive advantage) and two external (Environmental stability and Industry strength) strategic dimensions to determine the organization’s strategic posture in the industry.

By calculating the importance of each of these dimensions, the SPACE matrix places them on a Cartesian graph with X and Y coordinates. The quadrant in which a company’s final score lies helps find the optimum strategy.

Space matrix can be used as a tool to calibrate a company with respect to its competition and as a basis for other tools like SWOT, Industry analysis or accessing strategic alternatives.

EFE and IFE Matrices

The External Factor Evaluation (EFE) matrix is a strategic management methodology that assesses and evaluates an organization’s external opportunities and threats. Similarly, an Internal Factor Evaluation (IFE) evaluates a firm’s internal environment and reveals its strengths as well as weaknesses

These matrices serve as competitive benchmarking tools to compare a company’s EFE/IFE matrix with those of its key competitors. This helps in understanding how the company fares relative to its rivals and in identifying areas where it can gain a competitive edge.

PEST & PESTEL Analysis

A PEST analysis looks at a company from the lens of political, economic, social, and technological factors – the key externalities that can affect its activities and performance. PEST EL adds Legal and Environmental factors to the PEST model.

Using the tool shows how a company and its competitors face various challenges and advantages through the lens of each of the PESTEL perspectives. It also helps collect competitor data and determine how they handle the challenges presented in each of the perspectives.

Competitor Profile Matrix (CPM)

CPM helps companies assess themselves against their major competitors using the critical success factors for that industry. Constructing the CPM involves three steps:

• Find the Critical Success Factors (CSFs) for a company and attach weight to those factors according to their relative importance.
• Identify major competitors and rate each competitor, including the company itself on each of the CSFs
• Multiply the weight by the rating for each factor to get a weighted score. Then add each company’s weighted scores to get a total weighted score.

This, in summary, competitive analysis helps decision makers understand who competitors are and what the market structure is. The process requires paying close attention to each competitor’s apparent objectives, resources, competitive moves, strengths, and weaknesses.

A well-executed competitive analysis empowers organizations to formulate robust strategies, ultimately enhancing their ability to succeed in the market.

1. “Competitor Analysis in Strategic Management: Is it a Worthwhile Managerial Practice in Contemporary Times?”. Alex Yaw Adom, Israel Kofi Nyarko and Gladys Narki Kumi Som, https://iiste.org/Journals/index.php/JRDM/article/view/33186 . Accessed 28 Sep 2023

2. “Principles of Marketing”. Philip Kotler, Veronica Wong, John Saunders and Gary Armstrong, https://www.amazon.com/dp/B00HK38B3I?ref_=cm_sw_r_cp_ud_dp_42BGW75WED62JADPCZ0Z . Accessed 28 Sep 2023

3. “Benchmarking”. Strategic Management Insight, https://strategicmanagementinsight.com/tools/benchmarking/ . Accessed 03 Oct 2023

4. “Snapchat was ‘an existential threat’ to Facebook — until an 18-year-old developer convinced Mark Zuckerberg to invest in Instagram Stories”. Insider, https://www.businessinsider.com/how-developer-mark-zuckerberg-invented-instagram-stories-copied-snapchat-2020-4?IR=T . Accessed 30 Sep 2023

5. “YouTube Shorts copies TikTok again with voiceover narration”. Engadget, https://www.engadget.com/youtube-shorts-voiceover-narration-190351673.html . Accessed 30 Sep 2023

6. “Customer Value Analysis (CVA)”. CIO Wiki!, https://cio-wiki.org/wiki/Customer_Value_Analysis_(CVA) . Accessed 03 Oct 2023

7. “Can You Say What Your Strategy Is?”. Harvard Business Rveiew, https://hbr.org/2008/04/can-you-say-what-your-strategy-is . Accessed 01 Oct 2023

8. “To cheaply go: How falling launch costs fueled a thriving economy in orbit”. NBC News, https://www.nbcnews.com/science/space/space-launch-costs-growing-business-industry-rcna23488 . Accessed 03 Oct 2023

9. “Blue Ocean Strategy”. Strategic Management Insight, https://strategicmanagementinsight.com/tools/blue-ocean-strategy/ . Accessed 30 Sep 2023

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What Is Competitive Analysis and How to Do It Effectively

• 15 min read

Rebecca Strehlow, Copywriter at Crunchbase

Whether you’re an entrepreneur, market researcher or marketing enthusiast, knowing your competitors inside and out is a crucial part of the job. 

Competitive analysis is more than a quick online search; instead, it’s a systematic process that allows you to gain valuable insights into your competitive environment. By examining the strengths, weaknesses, strategies and market positions of rival companies, you can make informed decisions that help you come out on top.

Let’s dive into what competitor analysis is and how to do it, as well as the tools and templates you need to thrive in the modern market.

What is competitive analysis? 

Competitor analysis, often referred to as competitive analysis, is the systematic process of gathering and evaluating information about your competitors to gain a deep understanding of the competitive landscape in your industry. It involves delving into your competitors’ business models, marketing practices, product offerings, target audiences and much more.

This practice helps you keep a pulse on competing products in the market and make well-informed decisions for your business. It also enables you to find opportunities for growth, anticipate trends and proactively respond to potential threats.

Benefits of competitor analysis

The advantages of doing competitive analysis can have a meaningful impact on your bottom line. Here are just some of its key benefits: 

• Informed decision-making: By understanding your competitors’ strategies, you can make well-informed decisions about your own business. This includes choices related to product development, marketing and pricing.
• Identification of market opportunities: Competitor analysis can reveal gaps in the market or areas where your competitors may be underperforming. These insights can help you identify new opportunities for growth and expansion.
• Risk mitigation: By staying aware of your competitors’ activities, you can better anticipate potential threats and challenges. This proactive approach enables you to develop strategies to effectively mitigate risks and overcome threats before they happen.
• Benchmarking: Comparing your business to competitors helps establish benchmarks for performance. This allows you to measure your progress and identify areas where you excel or need improvement.
• Product and service enhancement: Analyzing competitors’ products and services can inspire improvements in your offerings, leading to increased customer satisfaction and loyalty.
• Improved marketing strategy: Understanding how your competitors market their products or services can help you refine your own marketing strategy to better reach your target audience.
• Adaptation to market shifts: The business environment is constantly evolving. Competitor analysis helps you stay agile and adapt to changes in customer preferences, technology and market trends.
• Competitive advantage: Armed with insights from competitive analysis, you can develop strategies to gain a competitive advantage in your industry.
• Long-term sustainability : Consistent competitor analysis allows your business to plan for the long term by identifying potential challenges and opportunities that may arise in the future.

Together, these benefits can empower you to thrive in the face of competition and establish a strong presence in the market. 

How to do competitor analysis 

To harness these advantages, you’ll need to learn how to perform competitive analysis effectively. The process is quite structured and involves several key steps to ensure that you gather relevant data and gain actionable insights.

• Identify your competitors
• Define your objectives
• Collect data
• Look for the 4 Ps
• Conduct a SWOT analysis

1. Identify your competitors

To pinpoint your competitors, create a list of organizations that compete with you both directly and indirectly in the marketplace. 

Direct competitors are organizations that offer similar products or services to the same target audience. In other words, they’re the businesses that potential customers could choose instead of your company.

To identify your direct competition, start by examining businesses that operate in the same industry or niche. Ask yourself questions such as:

• Who offers products or services that are nearly identical to ours?
• Who targets the same customer segments and geographical areas as we do?
• Who are our primary rivals when it comes to market share and sales?

Once you have identified these direct competitors, you can create a list or spreadsheet to keep track of their names, key characteristics and any available data that will be useful in your analysis.

Next, you’ll want to identify your indirect competitors. Indirect competitors serve a similar target market as your company, but may offer different products or services. They are indirect rivals because they can influence consumer choices, even though they are not in direct competition with your business. To identify indirect competitors:

• Look for businesses that serve the same customer needs, even if their products or services are not identical to yours.
• Consider how customers might choose between your offerings and those of indirect competitors.
• Examine businesses that could potentially expand into your market.

Including both direct and indirect competitors in your analysis provides a more holistic view of your competitive landscape and helps you anticipate shifts in consumer preferences or market dynamics.

Remember that the business environment is constantly changing, and new competitors may emerge over time. Regularly updating your list of competitors is essential to ensure that your competitor analysis stays relevant.

2. Define your objectives

The next step in competitive analysis is to clearly outline your objectives. This will ensure that you’re gathering relevant information that directly supports your business strategy. Here’s how to define your objectives effectively:

• Clarify your goals: Begin by outlining your overarching goals. Common objectives may include improving market share, optimizing pricing strategies, enhancing product development or refining marketing tactics.
• Identify your information needs: Use your goals to determine exactly what kind of information you’ll need. Ask yourself: What kind of data or insights will be most helpful in achieving your stated objectives? For example, if you want to improve product development, you may need data on your competitors’ product features, customer reviews and pricing.
• Develop KPIs: Write down the key performance indicators that are most relevant to your objectives. KPIs are quantifiable metrics that will help you measure your progress. For instance, if your goal is to enhance marketing strategies, relevant KPIs might include website traffic, conversion rates or social media engagement.
• Determine a time frame: Understanding the time frame of this project will influence the depth and scope of your analysis. Are you conducting a one-time competitor analysis, or is this an ongoing process? 
• Align with business strategy: Ensure that the above aligns with your overall business strategy. Your competitor analysis should directly contribute to the success and growth of your business.
• Adapt when necessary: Be open to adjusting your objectives as needed. The business landscape can change rapidly, and you may need to adapt in response to new opportunities or challenges.

When you define your objectives, you give yourself a clear roadmap for your research. This helps you focus on gathering the most pertinent data and ensures that your analysis directly benefits your business. Whether you’re looking to outperform competitors in a particular area or gain a broader understanding of the competitive landscape, well-defined objectives are the cornerstone of a successful analysis. 

3. Collect data

Effective data collection is another fundamental step in the competitor analysis process, as the quality and relevance of the data you gather directly influence the insights you gain. Begin by identifying data sources that will give you the information you’re looking for. These sources can include both online and offline channels.

Online sources are often the richest and most accessible. Common data sources for competitive monitoring include:

• Crunchbase : Crunchbase is a valuable resource for gathering data about companies, including your competitors. It offers details about a company’s firmographics, funding, leadership team, investor relationships and key metrics. This data helps you understand your competitors’ financial health, investment history, growth strategies and potential areas of expansion. 
• Company websites: Competitor websites are valuable sources of information about your competitors’ products, services, pricing and promotional strategies. They provide direct insights into how your competitors present themselves to customers and the market. 
• Social media: Social media platforms such as Facebook , X (formerly Twitter) , Instagram and LinkedIn offer a glimpse into your competitors’ marketing and promotional efforts. Analyze their posts, content engagement and follower interactions to understand their messaging and customer engagement strategies. You can also use social media to monitor comments, reviews and conversations to gauge customer sentiment and identify your competitors’ strengths and weaknesses.
• Customer review sites: Review sites like G2 , Capterra or dedicated industry-specific review platforms also offer candid customer feedback. Analyze the reviews to understand customer satisfaction levels, identify pain points and discover areas where your competitors excel or underperform. Some reviews may also mention pricing, which can help you determine how customers perceive the value of your competitors’ products or services.
• Market reports: Market research companies like Nielsen , Gartner , Forrester and Euromonitor International often produce comprehensive market reports across various industries. They often include data on market size, growth projections and emerging opportunities, helping you assess the overall landscape your competitors operate in. Market reports may also include company profiles, giving you information about their market share, strategies and financial performance. 
• Industry publications: Business publications and journals often publish in-depth articles and analysis about trends, innovations and market players. They can provide valuable information about your competitors’ strategies, market positioning and noteworthy developments. Crunchbase News , which offers data-driven reporting on private markets, is a great place to start.
• Government databases: Government databases can provide access to financial and regulatory information about companies, including your competitors. This data may include financial statements, business registrations and industry-specific regulatory compliance, helping you understand their financial health and legal compliance.

As you gather this data, make sure you have an organized place to put it. A good idea is to create a competitor matrix, also referred to as a competitor grid, which is a spreadsheet for organizing your research. List out your competitors on one axis of the grid (either the horizontal or vertical axis is fine). On the other axis, list the data points you’re looking to collect, such as company location, market position, price and branding.

A couple additional notes: pay attention to both your data accuracy as well as any ethical considerations. Confirm that the information you gather is up to date and reliable, as outdated or inaccurate data can lead to erroneous conclusions. On top of that, be mindful of legal requirements. Respect privacy rights, copyright and intellectual property laws when gathering data.

4. Look for the 4 Ps

Next, you’ll want to analyze your competitors’ marketing strategies. A systematic way to approach this is by looking at the 4 Ps of marketing, also known as the marketing mix. These are product, price, place and promotion, which you can break down into the following questions:

• What are the key features and attributes of our competitors’ products?
• How does the quality of our competitors’ products compare to ours?
• Are there any unique or innovative features in our competitors’ products that we should be aware of?
• What is the product life cycle of our competitors’ offerings, and how does that impact their market presence?
• How do our competitors brand and position their products in the market?
• Do our competitors offer a wide product range, or do they focus on a niche market?
• What are the customer reviews and feedback on our competitors’ products, and what strengths or weaknesses do they highlight?
• How do our competitors handle product updates, customer support and warranties?
• What are the pricing strategies employed by our competitors (e.g., premium, value, competitive or penetration pricing)?
• How do our competitors price their products or services compared to our pricing?
• What types of discounts, promotions or special offers do our competitors use, and how frequently do they change them?
• Do our competitors offer bundle pricing or product packages?
• How do our competitors handle pricing changes and adjustments based on market conditions or demand?
• What is the perceived value of our competitors’ products or services in relation to their pricing?
• Are there any loyalty programs or customer rewards related to pricing that our competitors offer?
• How do competitors communicate their pricing to customers, and does it align with their branding and positioning strategies?

Place (distribution)

• What distribution channels do our competitors use to reach their customers (e.g., direct sales, retailers, e-commerce or wholesalers)?
• How extensive is the geographic reach of our competitors’ distribution networks?
• Are there specific partnerships or collaborations that our competitors have with distributors or retailers?
• What is the availability and accessibility of our competitors’ products or services, both online and offline?
• How do our competitors handle inventory management, logistics and fulfillment to ensure timely delivery to customers?
• Do our competitors have a physical presence, and how does it impact their brand and customer engagement?
• What is the overall customer experience with the distribution and availability of our competitors’ offerings?
• Are there any supply chain or distribution challenges that our competitors face?
• What are the core elements of our competitors’ marketing and advertising strategies (e.g., online ads, content marketing, social media, traditional media)?
• How do our competitors position their brand, and what is their unique selling proposition?
• What messaging and tone do our competitors use in their advertising and marketing campaigns?
• How do our competitors engage with customers on social media, and how do they manage their online reputation?
• What content marketing tactics do our competitors employ to educate and engage their audience?
• Do our competitors use influencer marketing or partnerships with other brands or organizations?
• What customer feedback, testimonials or case studies do our competitors use in their promotional materials?
• How do our competitors measure the success and impact of their promotional efforts, and what adjustments do they make based on these metrics?

These questions will force you to think hard about your competitors and the ways they position their product or service in the market. Be sure to make a note of these data points so you have an organized spreadsheet with your competitive analysis. 

5. Conduct a SWOT analysis

Now, conduct a SWOT analysis using all the data and insights you’ve gathered. A SWOT analysis is a competitive analysis framework for systematically evaluating your competitors’ strengths, weaknesses, opportunities and threats. Create a table or slide deck with the following notes about each competitor:

• Strengths: Consider areas like product quality, brand reputation, financial stability and unique capabilities. What does your competitor excel at? What are their key assets and resources? What advantages do they have over your business and other competitors?
• Weaknesses: Analyze your competitors’ weaknesses, which are internal factors that put them at a disadvantage. Evaluate areas where they struggle, such as customer service issues, product limitations or operational inefficiencies. Where does your competitor fall short? What are their operational or financial weaknesses? Are there aspects of their products or services that receive consistent criticism?
• Opportunities: Consider the external factors and opportunities that your competitors can capitalize on. These may include market trends, emerging customer needs, technological advancements or changes in regulations. Here, you’ll want to ask yourself the following questions: What market opportunities are your competitors pursuing? Are there emerging trends that they are well-positioned to benefit from? How do they adapt to changing market conditions and customer demands?
• Threats: Evaluate the external factors and threats that pose risks to your competitors’ business. These could be increased competition, economic downturns, changing consumer preferences or regulatory challenges. What are the external threats that our competitors face? How do market or industry conditions pose risks to their operations? Are there competitive pressures that could erode their market share?

After identifying the strengths, weaknesses, opportunities and threats of your competitors, it’s time to analyze the findings. Look for connections and relationships between these factors. For example, how do strengths offset weaknesses, or how can opportunities be leveraged to mitigate threats? Consider how these factors impact your competitors’ overall competitive positioning.

Competitive analysis templates

Competitive analysis is a complex task, but you don’t have to start from scratch. These competitor analysis templates provide a structured framework for gathering and analyzing data about your competitors:

• Competitor research template
• Competitor matrix template
• Social media competitor analysis template
• SWOT analysis template

1. Competitor research template

This advanced search template is a helpful starting point for gathering data about competing companies. You can customize the template by adding multiple search filters, such as industry, geographic location and funding information, to pull up the companies that match your competitor profiles. The more you fine-tune your search, the more precise your list of competitors will be.

2. Competitor matrix template

A competitor matrix template , like this one from HubSpot , allows you to systematically compare key features, pricing and other attributes of your products or services with those of your competitors. By comparing these attributes side by side, you can better assess your biggest threats and identify areas where your business can excel.

3. Social media competitor analysis template

This social media competitor analysis template offers a structured framework for assessing and comparing your social media performance with that of your competitors. With sections for tracking key metrics, content strategies, audience engagement and more, this template simplifies the process of understanding how your social media efforts stack up against the competition. 

4. SWOT analysis template

This SWOT analysis template represents one of the most important types of competitive analysis templates. A template can simplify the SWOT analysis process and ensure that nothing falls through the cracks, helping you identify areas for improvement, capitalize on advantages and mitigate potential risks.

Competitive analysis examples

To understand how competitive analysis works in practice, let’s explore a few real-world examples that highlight its significance within different industries:

1. Apple vs. Samsung

Tech giants Apple and Samsung have long been rivals in the smartphone market. Both companies must scrutinize each other’s product launches, innovations and market share to stay competitive. Their competitive analysis involves a deep dive into one another’s product features, pricing strategies, branding and marketing tactics. 

2. Coca-Cola vs. Pepsi

Coca-Cola and PepsiCo have engaged in one of the most iconic and enduring business rivalries. Competitor analysis here includes assessing their advertising campaigns, product diversification, distribution networks and customer preferences. These two giants need to continuously monitor each other’s market positioning in order to win over consumers.

3. Amazon vs. Walmart

Amazon and Walmart are leaders in e-commerce and retail. They must perform ongoing competitive analysis to compare delivery speeds, pricing structures, customer experience and market expansion strategies. Both companies are committed to staying ahead by understanding the strengths and weaknesses of the other.

4. Airbnb vs. Booking.com

Another iconic competitor analysis example is within the online travel industry. Airbnb and Booking.com are key competitors that need to evaluate each other’s user reviews, property listings, pricing and website user experience. Both platforms continuously track each other’s offerings to enhance their competitive position.

5. Nike vs. Adidas

Nike and Adidas are major players in the athletic apparel industry. These companies closely follow each other’s strategies to dominate the market. Their competitive analysis includes examining product innovations, brand endorsements, athlete sponsorships and global market presence. 

Competitor analysis tools 

In order to conduct robust competitive analysis like the companies above, you’re going to need the right tools. These include everything from online databases to website monitoring platforms. Here are our top recommendations: 

1. Crunchbase

Crunchbase is a comprehensive business intelligence tool that provides best-in-class data about both public and private companies, including your competitors. You’ll get insights into funding, leadership teams, key metrics and investor relationships, allowing you to understand your competitors’ financial health, investment history and market focus. This information is vital for identifying potential threats in the market, as well as opportunities to differentiate yourself. Learn more about market research on Crunchbase .

2. Brandwatch

Brandwatch is a social listening and consumer intelligence platform that helps you monitor your competitors’ social media mentions, customer sentiment and brand reputation. This allows you to gauge public sentiment about your competitors and identify areas where you can strengthen your brand’s image and stand out in the market.

SEMrush is most commonly known as an SEO platform, but it’s also a useful competitive analysis tool. It helps you analyze your competitors’ digital marketing strategies, keywords, backlinks and advertising efforts. Ultimately, this gives you insights into your competitors’ online presence and helps you identify their strengths and weaknesses in the digital space. Note that you can view SEMrush web traffic data directly from Crunchbase .

4. SimilarWeb

SimilarWeb is a market intelligence platform that offers insights into website traffic, audience demographics and online performance. It allows you to benchmark your website’s performance against those of your competitors, discover their traffic sources and understand their online audiences.

IPqwery is a competitive analysis tool that offers insights into your competitors’ patent portfolios, technological innovations and intellectual property strategies. This allows you to assess innovation, identify potential partnerships, and evaluate the intellectual property landscape. IPqwery data is available with Crunchbase Data Boost .

Achieve sustainable growth with competitor analysis

Competitive analysis doesn’t only involve gathering information, but it’s also about turning insights into actions that drive your business forward. Competitor analysis is an important part of market research for startups and large companies alike, as it’s fundamental for long-term success. By carefully assessing your rivals and industry trends, you can adapt your strategies and stay ahead of the curve. 

• market research
• Originally published October 26, 2023, updated December 19, 2023

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How to Do a Competitive Analysis | Complete Guide with Competitive Analysis Charts

Table of Contents

What is a Competitive Analysis?

Importance of doing a competitive analysis, how to do a competitive analysis with visual techniques, identifying and categorizing top competitors, categorize your top competitors using a mind map, analyzing competitive landscape, swot analysis, pest analysis, porter’s five forces analysis, analyzing competitors’ market positioning, value proposition canvas, perceptual map, conducting competitive intelligence analysis, comparing competitor products and prices, radar chart, compare and contrast charts, competitor price analysis, when to use a competitive analysis, common mistakes and how to avoid them, what are your thoughts on how to do a competitive analysis.

Competitive analysis is a major part of any comprehensive market analysis. It allows you to gather information about your competitors, assess their strengths and weaknesses and helps you build strategies to improve your competitive advantage.

In a competitive analysis, there are many areas to look at and examine. In this list, we have covered how to do a competitive analysis using several competitive analysis techniques that you can use during each phase of your competitor research and competitive analysis.

A competitive analysis is a central part of a marketing plan. Information gathered from a competitive analysis helps you identify what makes your product or service unique from that of your competitors. Using that data you can develop strategies to attract your target market.

Competitive analysis is the process of identifying and evaluating the strengths and weaknesses of a business’s competitors to understand the marketing landscape and improve one’s strategy. This involves analyzing the competitors' products, pricing, marketing strategies, customer base, and other relevant factors. Businesses can adapt and develop in ways that set them apart from their competitors and appeal to customers in new ways by studying how their competitors operate and what differentiates them. The main objective of a competitive analysis is to identify opportunities and threats within a particular market or industry and to use the information to make informed decisions to gain a competitive edge in the market.

There are several reasons a business would opt to conduct a competitive analysis. They are,

• To identify market opportunities: Businesses can identify gaps and opportunities for market growth by understanding competitors' strengths and weaknesses. This can help businesses develop new products/services that target unmet customer needs or find new ways of differentiating themselves in the market.
• To gain a competitive advantage: Businesses can identify ways to differentiate themselves from their competitors and gain a competitive advantage. This can include offering better pricing, improving product features, or developing more effective marketing strategies.
• To better understand the market and customers: By analyzing the competitors, businesses can understand and gain insight into customer preferences, market trends, and emerging technologies or products.
• To anticipate and mitigate potential threats: By analyzing the competitors and the market, businesses can forecast potential threats to their market position and take steps to mitigate them. For example, if a competitor is known to lower prices, a competing business can focus on offering a high-quality product.
• To benchmark performance: Businesses can also benchmark their performance against competitors through a competitive analysis. By comparing metrics such as market share, revenue growth, and customer satisfaction, businesses can identify areas where they are outperforming their competitors and areas where they may need to improve.
• To improve decision-making: A competitive analysis can provide valuable insights to inform business decisions, including product development, pricing, marketing, and sales. Businesses can enhance their performance by using this information to make informed decisions.

A competitive analysis depends on competitor information about several areas. You can use the following competitor analysis techniques to gather and analyze the different types of data.

• Identify and categorize top competitors
• Analyze competitive landscape
• Analyze competitors’ market positioning
• Conduct a competitive intelligence analysis
• Compare competitor products and prices

Before you start comparing your product to those out there, you need to know who you are competing with. There are several methods you can use to research and identify your competitors.

• Search on Google, Bing etc. for your product name, product idea or related keywords
• Search on social media channels and online communities
• Ask your colleagues or other experts in the field
• Ask from your potential customers via emails, surveys etc.

Once your research is done, you may have a pretty long list of the names of direct, indirect, potential etc. competitors.

It’s important to categorize them, so you know which competitors to prioritize. A simple mind map like the one below can help you with that.

You can also categorize them as primary competitors, secondary competitors and tertiary competitors on the mind map.

You can further expand the mind map to include their location, website URLs ( click the relevant shape and add link ) and other necessary information as well.

Next step is to analyze the competitive landscape. Here you should focus on understanding the strengths and weaknesses or your competitors and threats and opportunities in the industry and find opportunities for growth.

SWOT stands for Strengths, Weaknesses, Opportunities, and Threats. Use it first to analyze your own product.

Look into what your strengths and weaknesses are. These are your product’s positive attributes like resources, unique product features etc. and negative attributes like inefficient processes, lack of resources etc. These are within your control.

Opportunities are technological advancement, growing market demand etc. And threats could be negative economic and political change. These are external and therefore are out of your control.

You can do a SWOT analysis for your competitors as well to learn how they are surviving in the market.

The PEST analysis looks at external factors that affect a product or service. Namely, they are Political factors, Economic factors, Social factors, and Technological factors.

By gathering this information you can determine how your competitors will behave in the face of changes occurring in these areas. You can alter or develop your strategies accordingly.

PESTLE is the extended version of PEST, as it takes Legal and Environmental factors into consideration as well.

Porter’s five forces analysis examines the environment in which a product operates. It helps to understand the level of competitive intensity in the industry. It primarily examines five factors in the industry

• Entry/Exit Barriers
• Substitutes

By examining these factors you can determine the profitability and the attractiveness of an industry. Refer to our List of Marketing Strategy Planning Tools to learn how to use Porter’s five forces analysis along with 13 other tools to plan your marketing strategy.

This is where you try to evaluate the ability of your competitors to influence the perception of their consumers (who also belong in your target audience). In other words, here you’ll be looking at how your customers perceive the products of your competitors as well as that of yours.

Value proposition canvas is a tool used to develop products that match the needs of customers. It is made up of the customer profile and value proposition of the business.

Customer profile consists of

• Gains: the gains the customers expect and wish to attain
• Pains: the negative experiences the customer has to go through when doing their job
• Customer jobs: the tasks the customers are trying to perform or the problems they are trying to solve

Value map consists of

• Gain creators: how the product offers added value to the customer
• Reliever: how the product can relive the pain of the customer
• Products and services: the products and services that create gain and relieve the pain of the customer

Value proposition canvases based on your competitors will help you figure out how they are offering value to their customers.

Refer to our Guide on Launching a New Product to learn how to use the value proposition canvas step-by-step.

The perceptual map helps you identify where your competitors are positioned in relation to your product’s position. It helps you understand what the average target market consumer thinks of your product and those of your competitors.

How to do it

Step 1: Select two determinant attributes you want to compare your competitors against. These determinants are the attributes consumers depend on to make decisions. For example, it could be the quality of the product and the price of it.

Step 2: Gather your list of competitors in the product category. From the mind map of competitors, you created earlier, pick 5 to 10 players in the first category.

Step 3: Based on a 1 to 5 rating scale, give scores to each selected competitor using the two determinant attributes.

Step 4: Using the grid, assign a place for each competitor. This will help you get a quick overview of where each and every competitor stand compared to one another.

Competitive intelligence analysis is the process of gathering and examining data on competitors, their products and customers, and target markets.

The synthesized data you generate through the analysis can be used by internal sales and marketing teams to make better decisions and develop strategies.

Step 1: Conduct research to gather data on your competitors. You can rely on resources like the customers, websites, social media, analyst reports, press releases, demo videos etc. to find information on your competitors, their customers etc.

Step 2: Use a mind map like the one below to organize and categorize the data you’ve gathered

Step 3:  Sort through and analyze all the data and create a competitor profile that covers aspects such as products, market, sales, partners, etc.

Step 4:  You can use a competitor profile like the one below to organize information and save them for later use and share it with your internal teams that need to come up with strategies to counter your competitors.

When developing new product features or outlining your pricing strategy, you need to take into consideration your competitors and how they have managed to deliver to their customers so far.

A radar chart is a tool that you can use to compare the products of your competitors based on different characteristics. It will help you identify which competitors are scoring high or low within the characteristics you’ve selected.

Step 1: Select the competitors you want to compare and assign them an axis that starts from the center.

Step 2: You can either select one characteristic and compare several competitors to evaluate their performance, or you can take one competitor and evaluate how they score under several characteristics.

Compare and contrast charts are a great visual tool to compare products. It will offer a quick overview of the capabilities of competitor products and that of yours when you are planning strategies or new developments.

Whether you want to compare product features, prices, or characteristics of competitor marketing strategies, compare and contrast charts are a great way to organize and analyze information.

With a chart like the one below, you can rate your competitors based on their strengths and whether increasing or reducing your product price is too costly or profitable for you.

Step 1: Research and gather price information of your top competitors

Step 2: Figure out whether reducing or increasing your product’s price to gain a competitive advantage over your competitors would cost you too much or help you make profits

Step 3: Use the grid below to visualize your findings and find which price reaction you should take in order to make a profit.

Read this article to learn how to use a standard competitive price response analysis in detail.

• To assess entering the market: If a business is considering entering a new market, a competitive analysis can help them to understand the competition and determine whether there is an opportunity to differentiate themselves.
• To identify product development opportunities: Competitive analysis can help a business identify gaps in the market and develop products that can fulfill the gaps in customer needs or offer unique features that set them apart.
• To determine the pricing strategy: By analyzing the competitors’ pricing strategies, businesses can develop more effective pricing strategies that reflect the market and offer competitive value to customers.
• To determine the marketing strategy: By conducting a competitive analysis, businesses can develop more effective marketing strategies highlighting their unique value proposition and differentiating them from their competitors.
• To determine the sales strategy: By understanding the sales strategies of their competitors, businesses can identify opportunities to improve their sales processes and better serve their customers.
• To create partnerships and collaborate: Competitive analysis can help identify potential partners or collaborators in the market and understand how these relationships can benefit the business.

Try to avoid the below mentioned mistakes when you are conducting a competitive analysis.

Focusing too much on the competition

It’s critical that you remain focused on your own business and not get caught up in what your competitors are doing. It is of course important to understand your competition, but it should not be the only factor influencing your company’s decisions. Rather, a competitive analysis should provide you with insights in the market and actions of your competitors. Make sure to balance your competitive analysis with your own strengths and goals.

Failing to consider indirect competitors

Due to the fact that they provide alternatives or substitutes for your goods or services, indirect competitors can be just as significant as direct ones. Even if they are not direct competitors, make sure you include any relevant competitors in your research.

Relying on inaccurate, outdated or incomplete information

A competitive analysis is only as good as the information it is based on. Make sure you are gathering accurate, up-to-date and complete information from reliable sources. Double-check your data and update your analysis regularly.

Not prioritizing key factors

When conducting a competitive analysis, it is critical to give priority to factors that are most important to your business. For instance, if pricing is an important aspect for your business, make sure you prioritize gathering and analyzing pricing information from your competitors.

Not developing an action plan

A competitive analysis is only useful if you use the insights gained to inform your business decisions. Therefore, make sure to develop an action plan based on the findings of your analysis and to set clear goals and objectives for your business.

Not carrying out keyword research of tracking Google search rank

Keyword research and tracking Google search rank can give you valuable insights into how your competitors are positioning themselves in the market and what keywords they are targeting. Make sure you include this information in your competitive analysis.

Not keeping up to date with industry news or trends

The market can change quickly, so it’s important to stay up to date with industry news and trends. Make sure you regularly check industry publications, news websites and social media for relevant updates.

Not updating the competitive analysis regularly

A competitive analysis is not a one-time event but an ongoing process. Make sure you update your analysis regularly to stay current with changes in the market and your competitors' activities.

Not getting relevant stakeholders involved

Make sure you involve relevant stakeholders, such as marketing, sales, and product development teams, in the analysis process and share the findings with them. This can help to align everyone around a common understanding of the market and competitors, and facilitate collaboration towards shared goals.

In this list, we’ve covered visual techniques that you can use to research competitors, analyze the competitive landscape and competitors’ market position and more.

These visual competitor analysis tools help you organize the data you collect and make effective decisions about how you should position and market your product or service.

Have you got any other competitive analysis techniques to add to the list? Leave your thoughts in the comment section below.

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FAQs About Competitive Analysis

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Amanda Athuraliya is the communication specialist/content writer at Creately, online diagramming and collaboration tool. She is an avid reader, a budding writer and a passionate researcher who loves to write about all kinds of topics.

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How to Write the Competitive Analysis for Your Business Plan

Back to Business Plans

Written by: Carolyn Young

Carolyn Young is a business writer who focuses on entrepreneurial concepts and the business formation. She has over 25 years of experience in business roles, and has authored several entrepreneurship textbooks.

Edited by: David Lepeska

David has been writing and learning about business, finance and globalization for a quarter-century, starting with a small New York consulting firm in the 1990s.

Published on February 19, 2023 Updated on December 12, 2023

Starting a business usually involves countless tasks, and one of the most important early hurdles is writing a business plan . Many entrepreneurs who aren’t looking for funding think they can skip this step, but that’s never a good idea. 

A crucial element of the business plan is the competitive analysis, mainly because only by understanding your competition will your company be able to beat them.

Fortunately for you, this handy guide lays out all you need to know to whip up an excellent competitive analysis that’s sure to give you a serious advantage. 

• What is a Competitive Analysis?

A competitive analysis describes your competitors and their products or services and identifies their strengths and weaknesses and competitive advantages. Writing the analysis involves detailed research and an examination of your competitors, their strategies, and their customers.

The goal is to identify how your business can gain a competitive advantage, usually by capitalizing on competitors’ weaknesses or beating them in a particular area, such as price or customer service.

A competitive advantage is critical to the success of your business, and something investors tend to focus on, so be sure to do your homework to determine yours.

• Steps to Write a Competitive Analysis

Writing a competitive analysis involves several steps.

1. Identify your top competitors

First, identify 5-10 competitors. They can be direct or indirect competitors. Direct competitors sell the same or similar products, while indirect competitors sell different products that solve the same problem. Burger King is McDonald’s direct competitor, for instance, while Chipotle is an indirect competitor.  

A good competitive analysis begins with a brief overview of each competitor.

2. Research your competitors

Next, research those competitors to find out more about what they offer, how they offer it, and to whom. You can get this info on the company’s websites, social media, marketing, and any news and financial reporting.  

Their marketing should help you to identify their value proposition and their target market . It may help to study their marketing through the eyes of a consumer. 

What need do they fill? Who would find their marketing appealing? Where do they advertise? If their ads appear on TikTok, they’re looking to attract a younger market. 

Read customer reviews to learn more about what they’re doing right, and more importantly, areas in which they fall short. You might even want to buy some of your competitors’ products, which would certainly help you with the next section of the plan. 

3. Compare products

Now it’s time to thoroughly compare your competitors’ products to your own, examining the features and uses, as well as pricing, quality, and market placement.  

This should show you how your product stacks up and give you ideas about how to improve it, perhaps with new features or added options.  

4. Identify competitor strengths and weaknesses

By now you should be able to identify the strengths and weaknesses of your competitors. What do they do well? Where do they fall short? In your competitor summaries, list the strengths and weaknesses of each. 

5. Identify competitor competitive advantages

At this point you should know each competitor’s competitive advantage. What is their key differentiator? How does their product stand out? A competitive advantage is usually one of the following:

• Customer service
• Brand awareness
• Technology 
• Convenience
• Rapid innovation
• Unique features
• High quality 
• Corporate social responsibility
• Empathetic marketing
• Eco-friendliness
• Employee expertise

6. Determine your competitive advantage

Now we get to the whole point the competitive analysis – figuring out where your business can gain an advantage. What does your company offer that they don’t? What can you do better than they do? Review the above list of competitive advantages – does any of them jump out to you? 

It could be something your business already does or has, or something you need to implement to gain an edge. Either way, it’s critical that you identify at least one differentiator that’s likely to persuade customers to choose your business. 

• Structure Your Competitive Analysis

As previously mentioned, your competitive analysis should be structured as a series of summaries about each competitor and how your company compares. It might help to create a chart or table to illustrate your main points and findings. 

Each summary should mention the key product features as well as strengths, weaknesses, and competitive advantage. Conclude the plan by explaining your competitive advantage, as well as how you will leverage it and sustain it. 

Sounds like a lot of work, right? And this is just one part of your business plan! 

A great deal of effort and research goes into a good competitive analysis, which highlights the complexity, and the importance, of writing a business plan. It’s a lot of work, but also a fantastic learning opportunity that will help develop informed strategies that shape your business. 

Even if you’re not seeking funding, take the time to write a solid business plan and be sure to dig into the competitive analysis. After all, finding and embracing your business’ competitive advantage is likely to be one of the keys to your success. 

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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.

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Competitive Analysis for a Paintball Business (Example)

• May 10, 2024
• Business Plan , Competitive Analysis

A competitive analysis is not just a tool for gauging the position of your paintball business in the market and its key competitors; it’s also a fundamental component of your business plan.

This analysis helps in identifying your paintball business’s unique selling points, essential for differentiating your business in a competitive market.

In addition, the competitive analysis is integral in laying a solid foundation for your business plan. By examining various operational aspects of your competitors, you gain valuable information that ensures your business plan is robust, informed, and tailored to succeed in the current market environment.

Paintball Business Plan

Fully editable 30+ slides Powerpoint presentation business plan template.

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Identifying Your Competitors in the Paintball Industry

Begin by identifying both your direct and indirect competitors. This includes other paintball fields, laser tag arenas, and outdoor adventure parks that cater to a similar audience. For instance, if your business specializes in realistic military simulation paintball games, your direct competitors include other venues that offer tactical paintball experiences. Consider indirect competitors such as video game arcades or any activity centers that might attract people interested in team-based competitive activities.

Utilize tools like Google Maps to visualize the geographical spread of these competitors. Customer review platforms like Yelp and TripAdvisor can offer customer reviews and ratings, providing insights into competitors’ strengths and weaknesses . For example, if many reviews highlight a competitor’s well-maintained equipment and diverse game scenarios, these are notable strengths.

Paintball Business Competitors’ Strategies

Analyzing the strategies of these competitors involves looking at several areas:

• Game Formats and Scenarios: Examine the variety of game formats and scenarios provided. If “Action Paintball Park” nearby is known for its zombie apocalypse night games, this might suggest a consumer interest in themed paintball events.
• Equipment and Safety: Consider the quality of equipment and safety measures in place. A competitor like “Elite Combat Zone” that offers top-of-the-line safety gear and high-quality paintball guns might appeal to a more safety-conscious clientele.
• Pricing Strategy : Review how your prices compare with those of your competitors. Are your session fees similar to those at “Budget Battlefields,” or are they aligned with the more premium experiences offered at “Tactical Adventures”?
• Marketing Tactics: Assess how competitors promote their businesses. Do they rely on social media campaigns, local advertising, or partnerships with schools and corporate groups?
• Customer Experience : Evaluate the overall customer experience. For instance, “FunShoot Arena” may be popular for its friendly staff and excellent customer service, enhancing its appeal.
• Operational Efficiency: Check if competitors use technology or innovative processes to streamline booking, registration, and equipment handling, such as “Streamline Paintball” with its online booking system.

What’s Your Paintball Business’s Value Proposition?

Reflect on what makes your paintball business unique. Perhaps it is known for its extensive and creatively designed playing fields, or maybe it offers exclusive night games that aren’t available elsewhere.

Identify market opportunities through customer feedback and industry trends. For example, the increasing interest in immersive and physically active experiences could be a significant market opportunity if your competitors focus mainly on traditional paintball games.

Consider your location: A paintball business in a rural area might focus on large-scale, immersive game environments, while one in a more urban area might emphasize accessibility, quick play sessions, and corporate team-building events.

How To Summarize It All In Your Business Plan?

Competitors’ strategies and market positioning can be superposed with your own paintball business’s value proposition by laying out on a page (or a presentation slide) the main differentiating factors. These factors will show investors and banks:

• How each competitor is positioned in the market
• How your paintball business  compares vs. competitors (what’s your value proposition )

In a competitive analysis, various parameters are used to compare and contrast your paintball business  with its competitors. The parameters listed below are examples of what you might include in your analysis. 

They are not exhaustive but serve as a guide to help you understand key aspects to consider. Each parameter provides insights into different facets of the competitive landscape, helping to paint a comprehensive picture of where your paintball business stands.

The location of your paintball facility influences its accessibility, visibility, and the type of clientele it attracts. A facility located in a rural or suburban area may offer more extensive outdoor fields, appealing to enthusiasts looking for a more immersive experience. Conversely, a more urban setting might attract casual players or corporate teams looking for accessible team-building activities.

Approximate Square Footage

The size of your facility impacts the number and size of fields you can offer, as well as additional amenities such as staging areas, parking, and customer service facilities. Larger spaces allow for more elaborate and diverse game setups, potentially attracting a broader audience.

Number of Fields

The number of paintball fields available dictates the variety of games you can host simultaneously and accommodates different skill levels and preferences. Multiple fields can reduce wait times and offer varied environments, enhancing the player experience.

Types of Games Offered

The variety of paintball games, such as capture the flag, elimination, scenario games, or speedball, defines the play experience and can attract different types of players. Offering unique or themed games can also set your business apart from standard offerings.

Special Features

Unique features such as themed fields, night games, tournament hosting, or high-quality rental equipment can distinguish your facility from others. These features can enhance the appeal of your facility and could be marketed as premium options.

Target Audience

Identifying your target audience—whether it’s competitive players, recreational groups, corporate teams, or families—helps tailor your marketing strategies and facility offerings. Understanding the demographics and preferences of your audience is key to aligning your business with customer expectations and needs.

Being part of a franchise can offer brand recognition and operational support, which might attract customers familiar with the brand. Conversely, operating as an independent facility allows for unique branding and possibly more flexible pricing and promotional strategies.

Other Comparison Factors

Consider adding these additional elements to your competitive analysis:

• Safety Standards: Evaluating the safety measures and staff training at competing facilities can provide insights into industry standards and customer safety expectations.
• Marketing Strategies: Analyzing how competitors market their facilities, including promotions, partnerships, and social media engagement, can offer valuable lessons for your own marketing efforts.
• Pricing Strategies: Understanding the pricing of games, equipment rentals, and memberships among competitors helps to position your offerings competitively.
• Customer Reviews: Assessing online reviews and customer feedback for other facilities can highlight areas for improvement and potential advantages.
• Community Engagement: The extent to which competitors engage with local communities and participate in local events can influence public perception and customer loyalty.

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Butcher Shop Business Plan Template

Written by Dave Lavinsky

Butcher Shop Business Plan

Over the past 20+ years, we have helped over 1,000 entrepreneurs and business owners create business plans to start and grow their butcher shops. On this page, we will first give you some background information with regards to the importance of business planning. We will then go through a butcher shop business plan template step-by-step so you can create your plan today.

Download our Ultimate Business Plan Template here >

What is a Butcher Shop Business Plan?

A business plan provides a snapshot of your butcher shop as it stands today, and lays out your growth plan for the next five years. It explains your business goals and your strategy for reaching them. It also includes market research to support your plans.

Why You Need a Business Plan for a Butcher Shop

If you’re looking to start a butcher shop, or grow your existing butcher business, you need a business plan. A business plan will help you raise funding, if needed, and plan out the growth of your butcher shop in order to improve your chances of success. Your business plan is a living document that should be updated annually as your company grows and changes.

Sources of Funding for Butcher shops

With regards to funding, the main sources of funding for a butcher shop are personal savings, credit cards, bank loans and angel investors. With regards to bank loans, banks will want to review your business plan and gain confidence that you will be able to repay your loan and interest. To acquire this confidence, you will not only want to confirm that your financials are reasonable, but they will also want to see a professional plan. Such a plan will give them the confidence that you can successfully and professionally operate a business. Personal savings and bank loans are the most common funding paths for social media marketing businesses.

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How to write a business plan for a butcher shop.

Below we detail what should be included with each section of your business plan for a butcher shop.

Executive Summary

Your executive summary provides an introduction to your business plan, but it is normally the last section you write because it provides a summary of each key section of your plan.

The goal of your Executive Summary is to quickly engage the reader. Explain to them the type of meat shop you are operating and the status. For example, are you a startup, do you have a butcher shop that you would like to grow, or are you operating a chain of independent butcher shops?

Next, provide an overview of each of the subsequent sections of your plan. For example, give a brief overview of the meat industry. Discuss the type of butcher shop you are operating. Detail your direct competitors. Give an overview of your target market. Provide a snapshot of your marketing plan. Identify the key members of your team. And offer an overview of your financial plan.  

Company Analysis

In your company analysis, you will detail the type of butcher shop you are operating.

For example, you might operate one of the following types of butcher businesses:

• Deli Butcher Shop : this type of meat shop specializes in cutting deli meats in small quantities for single or family size servings.
• Specialty Butcher Shop: this type of meat shop focuses on cutting specific meats such as wild game animals; their clients are usually hunters or fishermen.
• Abattoir Butcher: this type of meat shop specializes in cutting meats in wholesale sizes at abattoir/slaughterhouse.

In addition to explaining the type of butcher business you will operate, the Company Analysis section of your business plan needs to provide background on the business.

Include answers to question such as:

• When and why did you start the business?
• What milestones have you achieved to date? Milestones could include the number of customers served, number of positive reviews, total weight of fresh meat cuts, etc.
• Your legal structure. Are you incorporated as an S-Corp? An LLC? A sole proprietorship? Explain your legal structure here.

Industry Analysis

In your industry analysis, you need to provide an overview of the meat industry.

While this may seem unnecessary, it serves multiple purposes.

First, researching the meat industry educates you. It helps you understand the market in which you are operating.

Secondly, market research can improve your strategy, particularly if your research identifies market trends.

The third reason for market research is to prove to readers that you are an expert in your industry. By conducting the research and presenting it in your plan, you achieve just that.

The following questions should be answered in the industry analysis section of your meat shop business plan:

• How big is the meat and poultry industry (in dollars)?
• Is the market declining or increasing?
• Who are the key competitors in the market?
• Who are the key suppliers in the market?
• What trends are affecting the industry?
• What is the industry’s growth forecast over the next 5 – 10 years?
• What is the relevant market size? That is, how big is the potential market for your butcher shop? You can extrapolate such a figure by assessing the size of the market in the entire country and then applying that figure to your local population.

Customer Analysis

The customer analysis section must detail the customers you serve and/or expect to serve.

The following are examples of customer segments: individuals, families, deli shops, grocery stores, restaurants and fast food suppliers.

As you can imagine, the customer segment(s) you choose will have a great impact on the type of business you operate. Clearly, a family would respond to different marketing promotions than fast food supplier, for example.

Try to break out your target market in terms of their demographic and psychographic profiles. With regards to demographics, include a discussion of the ages, genders, locations and income levels of the customers you seek to serve. Because most butcher shops primarily serve customers living in their same city or town, such demographic information is easy to find on government websites.

Psychographic profiles explain the wants and needs of your target customers. The more you can understand and define these needs, the better you will do in attracting and retaining your customers.

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Competitive Analysis

Your competitive analysis should identify the indirect and direct competitors your business faces and then focus on the latter.

Direct competitors are other butcher shops.

Indirect competitors are other options that customers have to purchase from that aren’t direct competitors. This includes delis, supermarkets and grocery stores.

With regards to direct competition, you want to describe the other butcher shops with which you compete. Most likely, your direct competitors will be house flippers located very close to your location.

For each such competitor, provide an overview of their businesses and document their strengths and weaknesses. Unless you once worked at your competitors’ businesses, it will be impossible to know everything about them. But you should be able to find out key things about them such as:

• What types of customers do they serve?
• What types of meats do they specialize in?
• What is their pricing (premium, low, etc.)?
• What are they good at?
• What are their weaknesses?

With regards to the last two questions, think about your answers from the customers’ perspective. And don’t be afraid to ask your competitors’ customers what they like most and least about them.

The final part of your competitive analysis section is to document your areas of competitive advantage. For example:

• Will you provide a wider variety of meat options?
• Will you provide special discounts or perks for new or returning customers?
• Will you provide the highest quality meat?
• Will you offer better pricing?

Think about ways you will outperform your competition and document them in this section of your plan.  

Marketing Plan

Traditionally, a marketing plan includes the four P’s: Product, Price, Place, and Promotion. Your marketing plan should include the following:

Product : In the product section, you should reiterate the type of meat shop that you documented in your Company Analysis. Then, detail the specific meat products you will be offering. For example, will other food options such as side dishes?

Price : Document the prices you will offer and how they compare to your competitors. Essentially in the product and price sub-sections of your marketing plan, you are presenting the services you offer and their prices.

Place : Place refers to the location of your business. Document your location and mention how the location will impact your success. For example, is your business located in a busy retail district, or a highly trafficked area? Discuss how your location might be the ideal location for your customers.

Promotions: The final part of your marketing plan is the promotions section. Here you will document how you will drive customers to your location(s). The following are some promotional methods you might consider:

• Advertising in local papers and magazines
• Reaching out to local websites
• Social media marketing
• Local radio advertising

Operations Plan

While the earlier sections of your meat shop business plan explained your goals, your operations plan describes how you will meet them. Your operations plan should have two distinct sections as follows.

Everyday short-term processes include all of the tasks involved in running your butcher shop, including cutting meats, tracking inventory, and completing orders and sales for customers.

Long-term goals are the milestones you hope to achieve. These could include the dates when you expect to have X number of customers, or when you hope to reach $X in revenue. It could also be when you expect to expand your business to a new city.  

Management Team

To demonstrate your butcher shop’s ability to succeed, a strong management team is essential. Highlight your key players’ backgrounds, emphasizing those skills and experiences that prove their ability to grow a company.

Ideally you and/or your team members have direct experience in food service management. If so, highlight this experience and expertise. But also highlight any experience that you think will help your business succeed.

If your team is lacking, consider assembling an advisory board. An advisory board would include 2 to 8 individuals who would act like mentors to your business. They would help answer questions and provide strategic guidance. If needed, look for advisory board members with experience in overseeing supermarkets or grocery stores or successfully running their own business.  

Financial Plan

Your financial plan should include your 5-year financial statement broken out both monthly or quarterly for the first year and then annually. Your financial statements include your income statement, balance sheet and cash flow statements.

Income Statement : an income statement is more commonly called a Profit and Loss statement or P&L. It shows your revenues and then subtracts your costs to show whether you turned a profit or not.

In developing your income statement, you need to devise assumptions. For example, will you only cut meats in small portions or in large quantities for other businesses such as a supermarket? And will sales grow by 2% or 10% per year? As you can imagine, your choice of assumptions will greatly impact the financial forecasts for your business. As much as possible, conduct research to try to root your assumptions in reality.

Balance Sheets : Balance sheets show your assets and liabilities. While balance sheets can include much information, try to simplify them to the key items you need to know about. For instance, if you spend $50,000 on building out your meat shop, this will not give you immediate profits. Rather it is an asset that will hopefully help you generate profits for years to come. Likewise, if a bank writes you a check for $50,000, you don’t need to pay it back immediately. Rather, that is a liability you will pay back over time.

Cash Flow Statement : Your cash flow statement will help determine how much money you need to start or grow your business, and make sure you never run out of money. What most entrepreneurs and business owners don’t realize is that you can turn a profit but run out of money and go bankrupt.

In developing your Income Statement and Balance Sheets be sure to include several of the key costs needed in starting or growing a meat shop:

• Location build-out including design fees, construction, etc.
• Cost of equipment and supplies
• Payroll or salaries paid to staff
• Business insurance
• Taxes and permits
• Legal expenses

Attach your full financial projections in the appendix of your plan along with any supporting documents that make your plan more compelling. For example, you might include your office location lease or blueprints for your shop.  

Putting together your own business plan for your butcher shop is a worthwhile endeavor. If you follow the template above, by the time you are done, you will have an expert business plan (download it to PDF to show banks and investors). You will really understand the meat and poultry industry, your competition, and your customers. You will have developed a marketing plan and will really understand what it takes to launch and grow a successful butcher shop.  

Butcher Shop Business Plan FAQs

What is the easiest way to complete my butcher shop business plan.

Growthink's Ultimate Business Plan Template allows you to quickly and easily complete your Butcher Shop Business Plan.

What is the Goal of a Business Plan's Executive Summary?

The goal of your Executive Summary is to quickly engage the reader. Explain to them the type of butcher shop you are operating and the status; for example, are you a startup, do you have a butcher shop that you would like to grow, or are you operating a chain of butcher shops?

Don’t you wish there was a faster, easier way to finish your Butcher Shop business plan?

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Home Blog Business Value Chain Analysis: A Guide for Presenters

Value Chain Analysis: A Guide for Presenters

Successful businesses add value every time they sell something. Adding value means customers get what they want and are happy with their purchase, and the business owners earn revenue. Companies that give their customers more value make more profit than those that do not.

Therefore, understanding a business’s value chain is important for finding out how much value is added. This article highlights what a value chain is and why it matters. It will further guide you with a case study on how you can analyze yours to help your business keep more of the value it creates from sales.

Table of Contents

What is a Value Chain?

Elements of the value chain, advantages of value chain analysis in business, what is the difference between supply chain and value chain, how to create a value chain analysis, recommended ppt templates for value chain analysis presentations, final words.

Value chain refers to all the business processes that make a product or provide a service. This chain includes everything from coming up with ideas to selling the final product. Michael Porter introduced it to help the company break down its tasks into activities and focus on where it can be better than its competition [1] . These activities either make the product worth more to customers or cost less to produce.

Porter’s value chain is not just about what a company does. It is also about the other companies it works with, like suppliers and distributors. You can imagine it as a series of steps. Each step adds something meaningful to the final product or service.

Analyzing the value chain is like focusing closely on each stage to identify opportunities for improvement.  By looking closely at each part of the process, businesses can find ways to make things more efficient [2] . This saves money and helps become more competitive in the market.

Activities of the value chain are divided into two categories.

Primary Activities

Inbound logistics.

It involves all the activities related to logistics. We are all aware that logistics in a business is all about receiving, storing, and distributing inputs required for the production process [4] . We will perform tasks such as sourcing raw materials, handling inventory, and managing suppliers.

These activities directly convert inputs into finished products or services. This stage includes the manufacturing, assembly, packaging, and testing processes.

Outbound Logistics

Once the products or services are ready, outbound logistics focuses on efficiently getting them to the customers. This includes order fulfillment, warehousing, transportation, and delivery.

Marketing and Sales

This section covers all activities related to promoting and selling products or services to customers. It includes market research, advertising, sales strategies, pricing, and distribution channels.

After-sales service is crucial for maintaining customer satisfaction and loyalty. This includes installation, repair, maintenance, customer support, and warranties.

Secondary Activities

Procurement.

It is sourcing and purchasing raw materials, equipment, and other resources required for production. Effective procurement practices can help to improve the quality, cost-effectiveness, and reliability of the inputs.

Technology Development

Innovation and technological advancements also improve efficiency and competitiveness. This includes research and development (R&D), technology acquisition, and innovation processes.

Human Resource Management

People are the driving force behind every business. Human resource management encompasses recruitment, training, performance management, and employee relations to ensure a skilled and motivated workforce.

Infrastructure

Infrastructure refers to the organizational support systems and facilities required to support the value-adding activities. This includes IT systems, communication networks, facilities management, and other administrative functions.

Value Chain Analysis helps businesses make intelligent decisions and improve their actions [5] . For example, companies can use it to find where they’re wasting time or money and fix those areas. It also allows businesses to understand their unique value from competitors in the same industry. Plus, it’s beneficial for ensuring everything runs smoothly in their supply chain, so they always have what they need and when needed.

The supply chain and the value chain are related but have different jobs. The value chain mainly focuses on the activities within a single company. It adds value at each stage of a product’s journey, from creation to customer satisfaction. This includes production, marketing, and customer support [3] . On the other hand, the supply chain has a broader scope. It involves acquiring materials from suppliers, manufacturing goods, and delivering them to customers. It coordinates with various partners to ensure smooth operations and minimize costs [3] . At the same time, the value chain focuses on value creation. Thus, the supply chain is more about efficiently moving goods and minimizing production and transportation costs.

NB: This case study simplifies the Value Chain Analysis process for easier concept understanding. Due to the depth required for this kind of study, value chain analysis is performed at large-scale organizations as a tool.

Step 1: Identify Value Chain Activities

First, you separate the business operations into primary and support activities. Primary activities directly relate to creating and delivering a product or service. Conversely, support activities assist and enhance the efficiency and effectiveness of primary activities.

Café Delight maps out all its activities, from sourcing ingredients to delivering the final cup of coffee. Its focus on high-quality ingredients and exceptional customer service are critical to its brand identity.

Primary Activities for Café Delight include

Inbound Logistics : Procuring coffee beans, milk, and bakery items.

Operations : Brewing coffee and preparing food.

Outbound Logistics : Serving customers in-store or delivering orders.

Marketing & Sales : Promotional campaigns and loyalty programs.

Service : Customer service and after-sales feedback handling.

Support Activities might involve

Procurement : Sourcing high-quality ingredients.

Technology Development : Implementing order management systems.

Human Resource Management : Training baristas and staff.

Infrastructure : Managing cafes and administrative tasks.

Step 2: Determine Activities’ Values and Costs

Here, you evaluate each identified activity to understand its cost structure and the value it adds to the final product or service. This involves assessing how each activity contributes to customer satisfaction and competitive advantage and pinpointing where costs are incurred.

In this crucial step, the focus shifts to analyzing the utility or value of each activity within Café Delight’s operations. It is identifying areas where costs can be reduced to enhance profitability. Let’s break down this step further.

Value Analysis

• Café Delight’s team conducts a thorough examination of its operations. It focuses on functions that directly impact customer satisfaction and operational efficiency. For instance, they identify that the primary function of serving quality coffee promptly to customers significantly enhances satisfaction.
• Café Delight offers a variety of specialty coffee blends sourced from exotic locations, priced at $4.50 per cup. Customers highly value the unique flavors and quality of the coffee.
• Secondary functions, such as the ambiance and customer service, are also evaluated for their contribution to customer experience and loyalty.
• Additionally, the café provides a cozy and inviting ambiance, with comfortable seating areas and aesthetically pleasing décor. This ambiance enhances the overall customer experience and encourages repeat visits.

Cost Analysis

• The team also examines the costs associated with each function, including procurement, labor, and operational expenses. For example, they find that high-quality coffee beans and skilled baristas contribute to higher procurement and labor costs.
• Additionally, they identify areas where costs could be reduced without compromising quality, such as optimizing inventory management or streamlining operational processes.
• Procuring high-quality coffee beans from international suppliers incurs significant costs for Café Delight, averaging $25 per pound. However, the café justifies this expense by offering premium coffee blends with higher prices and customer loyalty.
• Skilled baristas are essential to maintaining the café’s reputation for exceptional coffee. With an average hourly wage of $18 per barista and a team of 10 working 40-hour weeks, labor costs constitute a substantial portion of the expenses of Café Delight.

By conducting a thorough value and cost analysis, Café Delight also identifies areas for cost optimization without compromising its commitment to quality and customer satisfaction. For instance:

• The café explores alternative suppliers or bulk purchasing options to negotiate better prices for high-quality ingredients, such as coffee beans and bakery items.
• It implements efficient labor scheduling practices and training programs to maximize productivity and minimize labor costs while maintaining service excellence.

Step 3: Identify Competitive Advantage Opportunities

Here, it analyzes the information from the first two steps to uncover opportunities for gaining a competitive advantage. This could be through cost leadership (making activities more efficient to reduce costs) or differentiation (making products or services unique to enhance value).

For Café Delight, potential competitive advantages could include:

Product Innovation and Differentiation

Café Delight can make its menu more interesting by adding new coffee blends. They can even create unique blends for different times of the year. They will introduce exclusive limited-edition blends or seasonal flavors. This keeps customers excited and coming back for more.

Operational Excellence and Efficiency

While maintaining a commitment to quality, Café Delight can improve its operations to streamline processes, reduce costs, and enhance overall efficiency. It will implement technology solutions, such as inventory management software and automated brewing systems, to enhance workflow and minimize waste, which will help it save money and time.

Customer-Centric Service Excellence

Café Delight sets itself apart by providing top-notch customer experiences. This helps build customer loyalty and generates positive word-of-mouth recommendations. Prioritizing employee training programs that offer individualized and attentive service is crucial. They can significantly impact their staff by preparing to predict customer preferences, handle problems effectively, and establish meaningful connections.

Brand Storytelling and Community Engagement

Café Delight can tell customers where their coffee comes from and why it’s unique. They will engage in storytelling through social media, blog content, and in-store experiences, highlighting the journey from bean to cup and the impact of supporting local farmers. This makes customers feel good about coming to Café Delight.

If you are short on time and need to make a quick presentation, we recommend you use a value chain analysis template . Using PowerPoint templates from SlideModel or similar platforms can significantly enhance the clarity and impact of your presentation. Choosing a template that visually aligns with the depth and complexity of your analysis is very important. At the same time, creating a presentation from scratch can be time-consuming as well. Therefore, SlideModel Templates provide a structured starting point. These templates allow you to focus on customizing content rather than designing slides from the start.

1. Value Chain Analysis PowerPoint Template

You can present a value chain analysis sample in either an all-in-one format or slide-by-slide using this creative value chain PPT template. The diagram is featured in full format on the first slide, whereas the second slide attends to the primary activities and the third to the secondary activities. Get creative and customize this best PPT template for professional-looking presentation slides.

Use This Template

2. Competitive Analysis Slide Deck for PowerPoint & Google Slides

A slide deck intended for any kind of competitor analysis we need to create. Featuring 21 slides, we can perform an industry analysis, discover competitors, perform a competitor segmentation study, analyze competitor’s review data, create a SWOT analysis and more.

3. Key Diagram in 5 Steps

This key-inspired diagram slide makes it easy to express 5-step processes. It highlights each phase in a 5-step process, building the idea of the key components of any kind of process.

4. Value Chain Diagram Slide Deck for PowerPoint & Google Slides

Optimize operations management and any kind of logistics presentation by using our value chain model slide deck. 3 different diagram layouts in light and dark themes. Check them out!

5. Cost Reduction Plan PPT Template

As we’ve seen in our case study, this Cost Reduction PPT template helps us illustrate the different tactics driven out from the value chain analysis and cost analysis. Make your presentations more effective by summarizing your cost reduction plan with this versatile PPT template in light and dark themes.

6. Gradient Value Chain Framework Primary Activities

You can edit this 5 Steps Gradient PowerPoint Model and describe the 5 main activities of the Value Chain Framework. If your presentation requires to introduce the audience to the model, before getting deeper into the findings, it is recommended to explain the structure before, and set the context of the value chain analysis. Using impacting diagrams will help the audience engage, and remember the concepts you will use later.

7. Comparison Slide Value Chain Analysis Pros & Cons

For larger-format presentations, users can introduce the pros & cons of a value chain analysis with this colorful PPT template. Just add the information in the placeholder text areas and articulate your speech to discuss each one of the points.

Value chain analysis is crucial for businesses to improve efficiency, maximize value, and gain an edge over competitors. By carefully examining primary and support activities, along with costs and values, organizations can identify areas for improvement and innovation. This helps streamline operations, make products and services stand out, and focus on customer needs. Overall, value chain analysis empowers businesses to boost performance, foster innovation, and achieve sustainable growth in a competitive market.

[1] The Value Chain – Institute for Strategy and Competitiveness. Harvard Business School. https://www.isc.hbs.edu/strategy/business-strategy/Pages/the-value-chain.aspx

[2] What is a value chain analysis? 3 steps: HBS Online (2020) Business Insights Blog . https://online.hbs.edu/blog/post/what-is-value-chain-analysis

[3] https://ecampusontario.pressbooks.pub/globalvaluechain/chapter/1-4-learning-objective-3/

[4] https://www.researchgate.net/figure/Value-Chain-Analysis-A-Primary-Activities-Inbound-Logistics-the-company-receives_fig2_341070011

[5] https://www.aicpa-cima.com/resources/article/value-chain-analysis

[6] What Is A Value Chain Analysis? 3 Steps https://online.hbs.edu/blog/post/what-is-value-chain-analysis

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Government releases 10-year business case for NT AFL team, spruiking $116 million-a-year economic boost

The Northern Territory government and AFLNT say the territory could see its own AFL team take to the field within the next decade, as they release a road map including plans for a new city stadium.

A business case published on Thursday recommends the federal government be asked to help fund construction of a long-mooted stadium in Darwin's CBD, in the hopes it would make an NT bid for a 20th AFL licence more compelling.

It says construction of a new stadium within the next seven to 10 years could cost between $700 million and $735 million.

It comes after Tasmania was awarded the 19th licence last year , despite plans to build a new waterfront stadium in Hobart being met with resistance .

The 210-page report envisages a new NT side could enter the competition "shortly after Tasmania in 2028", but admits it would need the federal government to "support the delivery of the key stadium and other infrastructure" in both Darwin and Alice Springs.

Announcing the plan at a press conference on Thursday,   AFLNT chairman Sean Bowden said the economic case for an NT team was "very strong".

"This will complete the AFL, it will make the AFL a truly national competition," he said.

"Ultimately, the biggest challenges for us are going to be … making sure our talent pathways are strong, the conditioning of players, and just winning the belief of the national competition that this is the right place and that we can take our rightful place in that competition."

NT Chief Minister Eva Lawler said the business case showed an NT-based side would be a net-positive for the territory economy, and spruiked its potential to lead to better social and health outcomes for the NT.

"That business case shows that the value of an AFL team would be about $116 million per annum to the Northern Territory, and it would employ around 160 people every year," Ms Lawler said.

She also argued an AFL side could address the NT's "liveability factor" and help retain more people in the territory, and drive business activity in the CBD on game days.

But Mr Bowden said the push to establish a team in Darwin and Alice Springs would need support from the AFL, its teams and the broader community.

"The talent that is just imbued in the Northern Territory amongst so many of our young people has to have that opportunity," he said.

"Talent pathways are critical.

"We want to see a dozen new Cyril Riolis, we want to see half a dozen new Andrew McLeods."

He said a new CBD stadium would "realise the full ambition" for the AFL side, and could even attract visitors from South East Asia.

The AFLNT team taskforce that helped complete the business case includes some of the biggest names in AFL, including former AFL chief executive Andrew Demetriou, Collingwood star Nathan Buckley and Adelaide Crows player Andrew McLeod.

Hopes for local business, tourism boost

NT Chamber of Commerce chief executive Greg Ireland said an NT AFL team and new stadium would increase tourism and business in the territory.

He welcomed the announcement, saying an NT AFL team and new stadium would improve liveability in the territory and, combined with major development goals around the gas industry, would help the territory economy grow.

He said game days in particular could support smaller businesses.

"We've seen what having world-class sporting facilities in the CBD has done to other jurisdictions," he said.

"The MCG, Adelaide Oval, they really have been an enabler for the local community and that feeds into local business."

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