A step-by-step guide to conducting competitor analysis

To succeed in any market, you need to understand who you’re up against. Competitor analysis helps you identify your rivals, uncover their strengths and weaknesses, and find opportunities to stand out.

This step-by-step guide outlines how to analyse your competitors, so you can make smarter, more strategic business decisions.

Key takeaways

• Competitor analysis is the process of researching and evaluating your competitors to understand their strengths and weaknesses

• To start, you need to identify your biggest competitors, then conduct market research

• It’s important to examine each competitor’s products and services, including features and price points, as well as marketing strategies

• Use your findings to help understand where your business can do better and how it can stand out

What is competitor analysis?

Competitor analysis is the process of identifying and evaluating your current and potential competitors to understand their strengths, weaknesses, strategies and market position. This helps you make informed business decisions and develop ways to gain a competitive edge.

Why do a competitor analysis?

There’s a reason why your biggest competitors run successful businesses. Conducting market research into how they operate can help you identify what they are doing better than you, the marketing strategies they use, and what steps you can take to make your business stronger.

Competitor analysis can give you a better understanding of your market, as well as identify opportunities to help your business stand out.

What to include in a competitor analysis

When compiling your competitor analysis report, you may want to include a description of your company’s target market, as well as details about your products or services.

It’s important to compare each detail of your products or services against those of your competitors to give you a clearer idea of what you’re doing right and where you could improve.

Your report should include current and projected market share, sales and revenue, as well as a pricing comparison analysis and a review of your own and other businesses’ marketing and social media strategies.

How to conduct competitor analysis

To effectively conduct competitor analysis, you need to identify your biggest competitors, then start gathering data on their products, pricing and marketing strategies.

Here’s a step-by-step guide:

1. Identify your competitors

First, select between five and ten competitors to analyse. You should divide these into direct and indirect competitors. Direct competitors offer similar products or services to the same audience, while indirect competitors offer alternatives to solve the same problem.

To find competitors, you can search on Google, check out social media platforms or look at local business directories and industry reports.

2. Carry out market research

Next, you need to carry out some market research. Focus on both primary and secondary research.

Primary research is the data you gather yourself through customer interviews, surveys or focus groups, or via buying your competitors’ products and services.

Secondary research is public information that already exists and can involve examining competitors’ websites or reading company records.

3. Consider each competitor’s products or services

Look at what each competitor offers and how each product or service compares to what your business provides. Consider everything, including features, style and design, ease of use, product quality and any warranties available.

You should also look at customer service, including how each competitor delivers support, whether that’s over the phone, through an online chat feature or by email. Another important factor is brand reputation – how do customers perceive each brand, and what do they say about it?

4. Look at your competitors’ pricing

You should also explore how much your competitors charge for a similar product or service to yours. Do they offer any form of discount, and when does it apply?

Analysing your competitors’ pricing strategies helps you determine how to position your own pricing. If your product or service offers greater value, you may be able to justify a higher price. Conversely, you might choose to undercut competitors to attract more customers.

Also, consider shipping costs – high delivery fees can deter potential buyers. Look at whether competitors offer free shipping on a minimum spend, and decide if a similar approach makes sense for your business.

5. Analyse how they market their products

Explore how your competitors market their products. Start by reviewing their websites – pay attention to layout and calls to action (CTAs) and consider subscribing to their newsletters to see how they engage potential customers.

Check whether they maintain a blog or knowledge centre and note how frequently they publish content. Examine the topics they cover, the keywords they target, and the depth of their content – does it offer basic information or more advanced insights? Do they regularly send out press releases?

Also assess the style and tone of their content. Are there spelling or grammatical errors? Do they use supporting media such as videos, infographics or case studies to enhance their message and promote their offerings?

Additionally, check whether they use tools such as Google Ads to promote their business. If so, analyse their ad creatives, offers and landing pages, as well as their copywriting style.

6. Analyse their digital presence

It’s also important to look at your competitors’ social media presence. What platforms do they use (Instagram, TikTok, Facebook)? How frequently do they post content, and what type of content do they use? This could be product showcases, tutorials or testimonials.

It’s also worth looking at engagement metrics such as likes, shares and comments, and whether there are any influencer partnerships.

7. Perform a SWOT analysis for each competitor

The final step is to carry out a SWOT analysis for each competitor and your own company. This outlines a business’s strengths, weaknesses, opportunities and threats (SWOT) in a table and enables you to compare your own business easily with others.

When compiling it, think about the following:

Strengths – Identify each company’s strengths (including your own). Are there any products that are performing well? What’s unique about the company? What does each business do best – brand awareness, price point or great distribution?

Weaknesses –Identify what each company is not doing so well. Are certain products underperforming? Is there a leadership issue? Does the business have a poor reputation or bad reviews?

Opportunities – Think about how you or a competitor could take advantage of new technology or expand operations

Threats – Consider what could have a negative impact on each business, whether that’s new taxes or changing market trends

Completing a SWOT analysis for each company – including your own – enables you to easily assess where you can stand out against the competition and what opportunities you can exploit. It makes it easier to understand what your competitors are doing better than you and how you can position your company to ensure you don’t lose out.

How to present a competitor analysis

Once your research is complete, present it in a clear and accessible format. A slide deck works well to highlight each competitor’s profile, key findings and your SWOT analysis.

Include insights on market gaps and opportunities, and enhance your presentation with visuals such as website or social media screenshots, as well as charts showing metrics such as web traffic, ad impressions and social media followers.

What should I do with the information gathered?

Your final step is to apply your insights to your business to help you strengthen your strategy and stand out in the market. Asking the following questions can help:

Product differentiation – What features or improvements could you add to your product offerings to make them more competitive?

Pricing strategy – Could you change your pricing to attract new customers without compromising value?

Customer experience – How could you simplify and enhance the buyer journey to boost conversion and loyalty?

Content strategy – What new topics or experiences could your content address better than competitors?

Marketing channels – What channels are you not yet using, and how could you grow a presence on those channels?

Business threats – What threats do you and other businesses face, and what steps can you take to prepare for them?

Competitor analysis example

Let’s imagine you’ve launched a new eco-friendly skincare business, offering a range of organic products in sustainable packaging. You’ve identified your two main competitors as Company A and Company B, and you now need to carry out your competitor analysis.

Company A offers a range of face cleansers and moisturisers with a price tag of between £5 and £40. The company regularly markets its products through social media platforms and relies on influencers.

Company A’s strengths include competitive pricing, a strong social media presence and good product variety. Its weaknesses include a slow, outdated website and poor content marketing.

Company B offers premium organic skincare sets with a much higher price tag of between £100 and £300. It markets its products through high-quality blog content and video tutorials.

Company B’s strengths include its excellent educational content and premium brand appeal. However, its weaknesses include its high price range, which might deter some customers, and a limited range of products.