A competition analysis simply consists of analysing the strategies, strengths and weaknesses of those companies that work in the same market sector as your business. It is very important to carry it out as it provides you with all the necessary data for your business to grow quickly by knowing how others in your sector are doing. Today we will tell you the keys to carry it out in the best way possible.
why do a competitor 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 leverage analytics as a tool to benchmark the strategies that give you the best results and implement them in your business.
- You improve the consumer's shopping experience. By understanding how your competitors work, you can find better ways to offer your product or service and provide a unique shopping experience.
- You discover new opportunities for your business. With analysis you can exploit the weaknesses of others to create a strategy that allows you to highlight your product or service.
what are the key points to improve your competitive analysis?
Before starting with the points, remember that when we talk about competition we can distinguish between direct competition and indirect competition. Direct competition includes all those companies that target the same market segment and offer the same product and/or service as you, and indirect competition targets the same customers with their products and/or services, but these products are substitutes for yours. Now, let's get down to it!
- 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 corporate images (such as logos, colours or concepts), the values that each brand represents, and so on.
- 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 youhave 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.
- 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 competitors can become yours if you analyse it well and a well-studied weakness can help you improve your business. Also, 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 sectorial business reports.
- analyse all the social networks of your competitors. In thesame 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. As 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 competitors, 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.