Competitor Analysis: Definition and How to Conduct It

Competitor analysis is one of the business strategies to understand the strengths and weaknesses of competitors in the market. It involves evaluating competitors' products, services, marketing strategies, and financial performance. 

The purpose of this strategy is to identify opportunities and threats that the company might face. By understanding your competitors, you can design more effective strategies to gain a competitive advantage.

Let's learn more about what competitor analysis is, its purpose, benefits, examples, and how to do it in the following article!

What is Competitor Analysis? 

Competitor analysis is the process of examining, identifying, and understanding all aspects of a business's competitors including their products, business models, marketing strategies, sales, company performance, and more.

When entering the market, you will be faced with competitive competitors. Therefore, by analyzing your business competitors, you get information to find new opportunities that have not been explored by competitors.

Competitor analysis is an important step to empower businesses of all sizes, from MSMEs, start-ups, to large corporations.

The Objective of Competitor Analysis

In the competitive world of marketing, analyzing business competitors is a crucial strategy to determine business success. Here are some of the objectives:

• Recognize the strongest competitors in the business industry.
• Understand the strategies used by competitors.
• Anticipate potential competitor actions that could damage the business.
• Track competitors' responses to decisions and actions taken in the business to influence them.
• Influence competitors' business patterns and decisions to support business growth and success.

The Benefits of Competitor Analysis

By analyzing your business competitors, you can provide deep insights into the position, strategy, and performance of competitors in the market.

Studying your business competitors has a wide range of benefits. Here are some of the benefits:

• Helps Make the Right Decisions: Whether planning your business future or making real-time decisions, analyzing your competitors can help you make more strategic decisions and investments.
• Capitalize on Competitor Weaknesses: Understanding a competitor's weaknesses can be an advantage for a business. If a competitor doesn't have the resources or ability to do something and your business does, it can give your business an advantage in the target market.
• Finding Opportunities: Analyzing your competitors is a strategy that can help you identify potential products or services that customers want. Therefore, you can create solutions through the products/services offered.
• Building a Marketing Strategy: By understanding how competitors allocate their budget and how they interact with customers, you can build a marketing strategy that is more unique and effective.

The Examples of Competitor Analysis

To give you a clear idea of how to analyze your competitors, you can take a look at some of the following examples: 

1. Analyze Competitor Content Performance

In analyzing a competitor's content performance, you can see what they post, how they build their brand identity, and how much response they receive from the audience. 

To see the type of content produced by competitors, you can use appropriate supporting tools, such as Google Keyword Planner. 

2. Analyze Competitor SEO Strategy

The next way to analyze your competitors is by using an SEO approach. This strategy can help you understand how your competitors rank on search engines like Google. 

You can identify where your competitors get their visitors from. In addition, you can also check the number and quality of backlinks that competitors have, to optimize SEO rankings.

3. Analyze Competitor's Ad Strategy

You can analyze your ad strategy through Ad Library, a useful tool for viewing ads run by competitors on Facebook and Instagram. With Ad Library, you can see the images, ad texts, and CTAs that competitors use. 

To start ad analysis, you can start by creating a list of competitors, setting comparison parameters, finding USPs, and analyzing the key points of competitors' ad strategies.

How to Conduct a Competitor Analysis

After seeing the examples above, you might be curious about how to do competitor analysis so that the results are appropriate.

Therefore, cmlabs has summarized several ways to analyze your business competitors. Here are the complete details:

1. Determine Objectives 

The first step to analyzing your competitors is to set clear goals. This means you need to know why you need to do the analysis. 

Normally, analyzing competitors is conducted to find out about competitor innovations, understand their marketing strategies, or even prepare yourself before entering a new market. 

By knowing the purpose, you can be more focused on gathering information significantly. 

2. Market Research

You can analyze your competitors through market research with the help of a business consultant. Market research is necessary since every business has different target consumers. 

By understanding the products or services offered by competitors, you can find out the needs and wants of consumers.

3. Identify Competitors

Next, it is important to identify your competitors so that the accuracy of the data being compared is more assured.

In this case, you can track customer journeys or conduct online research to find competitors in your business category.

In addition, you should also focus on finding competitors that are truly relevant to the business. You can use the WWH approach for every competitor you think of, including:

• Who are the customers? 
• What customer problems are they trying to solve? 
• How do they solve those problems? 

4. Collecting Competitor Data

The next step is to collect as much competitor data as possible. This data can include competitors' strengths and weaknesses, the types of products they offer, the size of the market, and their opportunities and threats. The collected data is then sorted and put into an analytical framework for further evaluation.

5. Create a SWOT Analysis 

When all the competitor data is collected, you can use SWOT analysis to analyze it in more detail. SWOT is a competitor analysis framework, that stands for Strengths, Weaknesses, Opportunities, and Threats. 

This method is useful to see the strengths, weaknesses, opportunities, and threats of competitors. In this case, the data collected can be more complete and help make better decisions in business strategy.

6. Explore Competitors' Digital Channels

The final step to analyze your competitors is to learn competitors' digital channels. This aims to help understand the type of content posted, recent activities, and how popular competitors are with the public. 

This step will help you gain information about the strategies and approaches they use in online marketing to increase their digital presence. 

As a result, you can customize your business strategy accordingly to outperform your competitors.
 

That was the complete explanation of what competitor analysis is, its purpose, examples, and strategies to do it. 

In the realm of business, analyzing competitors is an important strategy to strengthen a company's position in the market as well as the basis for developing smarter and more competitive marketing strategies.

In addition to projecting and analyzing competitors, you also need to maximize the efforts of organic digital marketing strategies, one of which is with SEO Services by cmlabs. 

The implementation of SEO strategies will make your website easier to find by the target audience. This strategy is also more cost-effective because it is not limited by a certain period, unlike paid advertising. 

What are you waiting for? Contact our Marketing Team and get a special offer now!