What is a Competitive Analysis — and How Do You Conduct One? | International Association of Digital Marketing Professionals (IADMP)

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Every time I work with a new brand, my first order of business is to conduct a competitive analysis.

A competitive analysis report helps me understand the brand’s position in the market, map competitors’ strengths/weaknesses, and discover growth opportunities.

In this article, I’ll break down the exact steps I follow to conduct competitor analysis and identify ways to one-up top brands in the market.

We’ll cover:

What is competitive analysis?
What is competitive market research?
Competitive Analysis in Marketing
How To Conduct Competitive Analysis in 5 Steps
How to Do a Competitive Analysis (the Extended Cut)
Competitive Product Analysis
Competitive Analysis Example
Competitive Analysis Templates
Competitive Analysis FAQs

Competitive analysis gives you a clearer picture of the market landscape to make informed decisions for your growth.

That said, you have to remember that competitive analysis is an opportunity to learn from others. It isn’t:

Copying successful competitors to the T.
Trying to undercut others’ pricing.
A one-and-done exercise.

Let’s look at how this exercise can help your business before breaking down my 5-step competitive analysis framework.

4 Reasons to Perform Competitive Analysis

If you’re on the fence about investing time and effort in analyzing your competitors, know that it gives you a complete picture of the market and where you stand in it.

Here are four main reasons why I perform a competitive analysis exercise whenever working with a brand for the first time:

Identify your differentiators. Think of competitor analysis as a chance to reflect on your own business and discover what sets you apart from the crowd. And if you’re only starting out, it helps you brainstorm the best opportunities to differentiate your business.
Find competitors’ strengths. What are your competitors doing right to drive their growth? Analyzing the ins and outs of an industry leader will tell you what they did well to reach the top position in the market.
Set benchmarks for success. A competitor analysis gives you a realistic idea of mapping your progress with success metrics. While every business has its own path to success, you can always look at a competitor’s trajectory to assess whether you’re on the right track.
Get closer to your target audience. A good competitor analysis framework zooms in on your audience. It gives you a pulse of your customers by evaluating what they like, dislike, prefer, and complain about when reviewing competing brands.

The bottom line: Whether you’re starting a new business or revamping an existing one, a competitive analysis eliminates guesswork and gives you concrete information to build your business strategy.