Competitive Analysis: Business Growth the Picasso Way
The art of competitive analysis
Competitive analysis is an art, so we’ve decided to see what an artist has to say about it. Pablo Picasso is credited with the quote: “Good artists copy, great artists steal.” Whether or not he actually said this is up to debate. However, it’s a great segue into this topic.
While we’re not trying to plagiarize or steal when doing competitive analysis, it’s nevertheless incredibly useful to see what your competitors are doing, both to see what mistakes you’re making as well as how you can improve.
In this post, we’ll dive into the benefits of analyzing what your competitors are doing as well as what aspects of their business you should pay attention to. But first,
What is competitive analysis?
Competitive market research involves researching major competitors’ products, sales, and growth strategies. It consists of comparing key market metrics to find differences and similarities between your own business and your competitors.
What are the benefits of competitive analysis?
We’re not just doing this for fun, of course. Analysing your competitors can help you:
- Learn where you’re making mistakes
- Find out how to improve many of your business practices
- Stay relevant
- Measure your own growth by using your competitors as benchmarks
- Chisel down a tight and unique value proposition for your own product
- Identify opportunities created by your competition’s shortcomings
- Create a better company culture
Before we can discuss what aspects of your competition to look at, we must talk about how to determine who your competition is.
Determining who your competitors even are
This isn’t as simple as it may seem at first. A competitor is a business similar to yours but is not under your brand. However, we must also keep in mind that there are direct and indirect competitors.
Direct competitors offer a product or service that could easily substitute for yours and that generally cover the same geographic area. Indirect competitors, on the other hand, offer products and services that are not the same but could more or less address the same need or problem.
Let’s look at an example we’re all familiar with: tea and coffee. They’re not the same product and yet they can both quench our thirst for a plant-based, warm, caffeinated beverage rich in antioxidants. These two products are indirect competitors. Starbucks doesn’t have to worry (much) that it’ll lose its coffee-loving customers to a local tea house.
An example of a direct competitor to Starbucks would be Caribou Coffee, as they both offer quality coffee on the go.
Generally speaking, you want to research your direct competitors, but don’t ignore your indirect ones either. After all, that local tea house can get into some serious trouble if Starbucks starts selling more tea.
What are we looking at when doing competitive analysis?
Let’s move on to the meat of this article. The following categories are all aspects of your competitors you should investigate. Using the knowledge you gain from this, you can enjoy the aforementioned benefits.
1. Products, prices, and perks
A product or service lies at the core of every business. Investigating these aspects will tell you a lot about your competitors. Compare and contrast what the two of you have on offer. How do they price their products? Do theirs come with any perks which attract more customers?
Studying this can generate a lot of opportunities. For example, say you spot a niche in the market for an affordable version of what you’re selling. By dropping your prices, you can quickly begin ousting your competition. Conversely, if your product is of higher quality, there’s nothing wrong with making it more expensive, though be sure to make it clear why this is so.
2. Sales’ tactics
What works for your competitors is likely to work for you and vice versa. Look at what they’re doing right and what they’re doing wrong. What is their sales process like? What channels does it go through? Are they expanding? Do they have regular discounts? What is their revenue? All of these questions can help elicit powerful data that can transform the way you approach sales.
Even better, if you have a customer who has at some point considered your competitors or even flat out chosen them over you, don’t be too proud to ask them for a detailed explanation as to why. Have an open conversation about it and you will glean valuable insight into improving your product or service.
This is another key aspect of any business. Correctly marketing a product or service goes a long way in selling it to lots of customers. When looking at marketing in the context of competitive analysis, there are several sub-categories you should pay attention to.
Look at the copy on their blog and website. How correct is it? What kind of keywords do they use and in what density? Which tone or voice do they use? What kind of images do they use?
In addition to this, observe their presence outside of their website. Do they engage in forum discussions? Take a look at their link-building strategy. Familiarize yourself with their tools and process to the best of your ability. Analyzing your competition’s content in this way will give you a better idea of what (or what not) to do with your own content and SEO practices.
Social media presence is important for any business. How your competitors handle their social media strategy can give you some great ideas. Some things to look out for are:
- What platforms they’re on
- When and how they share their content
- What kind of content do they share
- How they incorporate calls-to-action
- Their followers
- How they interact and engage with their followers
3.3 Partnerships and collaborations
Finally, take a look at how your competitors collaborate with other businesses or influencers. Competitive analysis can reveal strategies previously unknown to you. Is your competitor partnering with a certain type of business? Maybe you can do something similar.
In the same sense, by watching what kind of influencers promote their product, you can get an idea of what to look for or stay away from.
Good, fast, effective technology can remove roadblocks and increase your company’s efficiency. Take a close look at the technological tools your competition is using. There may be some great stuff you’re not taking advantage of.
A great piece of advice from HubSpot regarding this is that you can look at your competitors’ job listings, especially for engineers or web developers. The listings are likely to mention the tools the candidate needs to be familiar with. Here you can gain insight into what tech your competition uses. Another effective tool is Built With.
5. SWOT Analysis
Competitive analysis all boils down to analysing your competition’s strengths, weaknesses, opportunities, and threats. Everything we’ve talked about more or less is just approaching this from a different angle. Performing this analysis can also provide you insight into the SWOTs of your own business.
Here are some questions to ask:
- What are they doing well?
- What could they do better?
- In what areas do they have an advantage over you or you over them?
- What is their weakest area?
- Are there opportunities in the market that they have/have not identified?
- In what ways are they a threat?
- In what ways are they threatened?
What does competitive analysis tell you about your business?
Have you found out your worst marketing practice? Do you now understand why your social media accounts have so few followers? Are you still convinced your blog posts are fully optimized? All of these questions can be answered by analyzing your competitors. Our guide can get you started on this long road.
However, competitor analysis can often take a lot of time. If you’d like some help, consider getting in touch with us so we can see if a virtual assistant is right for you. After all, you’ve got better things to do than worrying what John from down the street is doing with his doughnut shop… right? (Please say yes.)