Competitive Market Analysis: A Guideline to Conduct One

In running a business, the owner must know who their competitors are and how to outperform them. Therefore, competitive market analysis is what is needed to analyze competition in the market.

At some stages, you may need to know how your competitors are running their businesses successfully. In this activity, you will research their marketing strategy and assess your brand's strengths and weaknesses. In this guide, we will show you the importance of conducting a competitive analysis and how to do it. Read more in the explanation below.

What is Competitive Market Analysis?

In order for your business to grow, the implementation of a competitive analysis is an important thing that needs to be done regularly. This activity can provide insights about products, sales, and marketing tactics by key competitors in your area of ​​business.

By applying analysis to competitors, you can observe the strengths and weaknesses of similar businesses. The results of these observations can also help you see opportunities and potential to outperform competitors.

Competitive market analysis is an activity that can be carried out at the highest level or specifically in a particular business. But keep in mind that any analysis should be done with your business needs and goals in mind.

Benefits of Conducting Competitive Market Analysis

The application of competitive analysis is an effective way to run and develop a business based on data from competitors. By doing this method, you can see how competitive the product is in the market.

Analysis of competitors can help the business strategy planning process effectively. Some of the benefits of applying this method are:

Creating a Stronger Marketing Strategy

By learning how competitors work in running their businesses, you can design marketing strategies more effectively. From the analysis carried out, you will get data related to the implementation of their marketing activities and develop a business plan according to the needs and objectives of the company.

Finding Competitors' Strengths and Weaknesses

Competitive analysis is the right way to get insights into competitors' business practices. That way, you can identify the advantages and disadvantages of competing products. Then, the results of these observations can be used to make improvements or development of your product.

Find Out Market Trends

Competitive analysis is a method that can provide insights into market trends. It is not only limited to recognizing competitors' benchmarking, the observations also show data about features that attract consumers' attention in a certain period.

Predicting Future Business Growth

In its application in the business world, competitive analysis is an effective way to develop a business in the future. With this method, business owners can see how to run their business ideally according to their performance indicators.

How to Conduct a Competitive Market Analysis

To conduct an analysis of competitors, you need to pay attention to a few things first. Of course, the needs and objectives of the company need to be considered before carrying out the analysis. The following aspects are important to keep in mind in the future competitive market analysis:

• Product details
• Product price
• Customer service
• Marketing activities
• Product distribution activities
• Business goals
• Business strategy
• Resource
• Financial situation
• Company structure

By considering the things mentioned above, you can start an effective competitor analysis. How to conduct a competitive market analysis is as follows.

Competitor Identification

The first thing that needs to be done in carrying out a competitive analysis is to identify your business competitors. That way, competitor benchmarking can be done accurately and based on company needs.

To get the results of the analysis effectively, make sure to divide the competitors according to their classification first. In general, the two categories of grouping competitors in the competitive marketing analysis are

Direct Competitors

In business activities, direct competitors are companies that market products similar to your business. Generally, direct competitors operating in the same geographic area can outperform you in business competition.

To make it easier to understand, one example of competitive analysis with direct competitors is to pay attention to the marketing strategy of brand B. Brand B markets the same type of beauty products as yours.

Indirect Competitors

Indirect competitors are companies that provide different products but can provide the same benefits as your business. The existence of indirect competitors needs to be considered because they have the opportunity to become direct competitors one day and tighten competition in your business scope.

An example of competitive market analysis with indirect competitors is to analyze the marketing activities of brand C, a provider of skincare products that are different from your brand. Even though the products marketed are different, the target customer is the same as your business.

Gather Competitor Background Information

After getting a list of competitors to be analyzed, then you can do a search related to their business background. Start with basic information first and move on to gather more specific data.

Meanwhile, studying competitors can give you insights into the competitive landscape of the business. The competitive landscape is a matter that includes the nature of competition within a business scope and plays an important role in the analysis of competition with competitors.

In this case, some of the data that you can collect to carry out a competitive market analysis are:

Company History

To get an accurate analysis, you need to get information about the history of the companies first. Insights about when the company was built and the source of funding can help you understand competitors more deeply.

Location

In addition to the company history, the location also needs to be considered so that competitive market analysis can be carried out accurately. For e-commerce businesses, the scope of the competition is very broad, covering entrepreneurs all over the world. For brick and mortar business activities, the scope of the location can be adjusted to the product marketing area.

Company Size

One of the things that need to be considered in the competitive analysis is the size of the competitors. You need to know how many employees work in the company.

In addition, data on the number of customers can help calculate the revenue earned for comparison with your business.

Learn Sales Tactics and Results

In order to get accurate competitive market analysis results, you can study marketing strategies and sales results from competitors. For large companies, you can get reports on their business activities online. However, information related to private business activities will be more difficult to find.

After getting your competitor's annual business report, be sure to do a thorough analysis. For this reason, the marketing team can play its role in observing competitors' strengths and weaknesses and designing strategies for your company's products by paying attention to these things.

Focus on Their Products

In carrying out competitor analysis, other things that need to be considered besides the competitive landscape are the products they offer. The product details need to be separated into several parts and analyzed carefully so that the results obtained are accurate. Here are the product observation details you need to know:

Product

Pay attention to what products or services competitors are selling. Then, find out the features of the product. If you have this information, identify the strengths and weaknesses of the product.

Price

To get an accurate comparison, be sure to note the pricing methods used by competitors. In addition, pay attention to the form of the offer made to the customer and the effect that pricing has on the quality of the product.

Promotion

You can do an analysis based on how competitors promote their products. The things that need to be considered are the marketing channel, focusing on certain elements of a product, and the image of the brand itself in the eyes of consumers.

Target Market

Of course, competitive market analysis is a method that requires information about the target market of a product. The data that needs to be obtained from this aspect consists of the method of selling the product and the distribution method.

Analyze The Content Strategy

Currently, product marketing can be done by optimizing SEO on pages or business websites. For that, you need to analyze your competitor's content strategy. So, how to do it?

You can analyze the quality of content provided by competitors by using SEO tools from cmlabs. In addition, also check the quality of competitors' websites by considering Domain Authority and Page Authority scores.

In order to compete with competitors, you can do a similar strategy. Make sure to optimize every content on your blog or website in order to outperform competitors' content in the SERP.

Learn Competitors' Strengths, Weaknesses, and Opportunities

After getting in-depth information about your competitors' businesses, you can see what their weaknesses and strengths are. Also, be sure to consider their chances of outperforming your business.

There is so much information about competitive analysis and how to do it. Competitive market analysis is something that can help you identify your business competitors and outperform them strategically.

In addition, you can learn from competitors' strengths and weaknesses in terms of marketing techniques, product quality, and distribution methods. But keep in mind that the analysis must be carried out in accordance with the needs and capabilities of your own business so that the company's goals can be achieved.