Nowadays, there is a lot of talk about how important it is to carry out a correct analysis of the competition in order to improve our own company. But do you really know what it is? Today we will tell you about it and give you the best tips to carry out a really good one.
what is a competitive analysis?
A competitor analysis is based on analysing the strategies, strengths and weaknesses of those businesses that work in the same market sector as your company.
It is very important to carry it out as it provides all the necessary data for your business to grow quickly, knowing how others in your sector are doing.
what are the main reasons to do a competitive analysis?
- it helps you recognise how to improve your business strategy.
- it shows you how to outperform your competitors in areas such as customer service.
- determine who your most direct competitors are and whether they share the same target audience.
- detect the level of interaction and engagement they have with all their customers.
- you get to keep up to date with market trends.
- you take advantage of the analysis as a tool in which you will take as a reference several strategies that provide the best results to implement them in your business.
- you improve the consumer's shopping experience, because by understanding how your competitors work, you can look for better ways to offer your product or service and provide a unique shopping experience.
- you discover new opportunities for your business, because with the analysis you can take advantage of the weaknesses of others to create a strategy that allows you to highlight your product or service.
7 steps to a proper competitor analysis
- Identify your main competitors. Before starting the analysis, your priority is to know which brands work for the same market sector you are targeting. You should make a list of the main competitors using criteria such as interaction and distribution channels, the geographical area in which they are active, the overlaps between business images (such as logos, colours or concepts), the values that each brand represents, etcetera.
- Compare the content of your competitors. Once you have a list of the companies that seem to be your main and most direct competitors, you should analyse their content, so you will see more elements in common, such as the vision or values that drive them to be part of the market.
- Analyse the data with specialised tools to audit competitiveness. Once you have made a first evaluation of the content you can make a second round with a specific tool, such as software or an online platform. Some of the tools to perform these specialised analyses are Ahrefs, Quick Sprout, Moz Link Explorer, Alexa and Buzzsumo. Quick Sprout, for example, offers a general analysis, while Buzzsumo tells you the reach of your pages or articles on social networks.
- Study their SEO strategy: Your competitor's SEO strategy can really make a difference when it comes to evaluating and comparing their search engine rankings. Also, identifying keywords is of utmost importance, as using different keywords will improve your site's visibility and attract new users.
- Perform a SWOT analysis. A SWOT analysis is essential for any business strategy as it helps you to know what actions to take to take advantage of opportunities, reduce threats, analyse your strengths and weaknesses. It is important to know that a strength of your competition can become yours if you analyse it well and a well-studied weakness can help you improve your business. Similarly, ask the Companies Registry for the annual accounts of your competitors. This will allow you to know the volume of their purchases and sales, as well as to make sectoral business reports.
- Analyse all the social networks of your competitors. In the same way as websites, social networks can provide a lot of information about a company. Companies usually publish offers, news and possible changes that may occur. Being an interactive and public medium, you can observe which companies follow these profiles and what are the opinions of their consumers. This can help you to know what people think of your competition, avoid mistakes they have made and position yourself better in the market.
- Compare your competitive advantages and generate a good strategy. As a last step you should consider making a global comparison of all the data you have collected from your competitors and identify in which aspects your business or brand outperforms them. This step will define the type of strategy you will use to improve the performance and reinforce the distinctive elements of your brand or business, either because you have a better quality in one area or because you know you have the necessary elements to stand out.
