{"id":9750,"date":"2022-11-25T09:58:28","date_gmt":"2022-11-25T09:58:28","guid":{"rendered":"https:\/\/www.price2spy.com\/blog\/?p=9750"},"modified":"2025-04-17T14:21:21","modified_gmt":"2025-04-17T14:21:21","slug":"complete-guide-to-competitor-analysis","status":"publish","type":"post","link":"https:\/\/www.price2spy.com\/blog\/complete-guide-to-competitor-analysis\/","title":{"rendered":"Complete Guide to Competitor Analysis"},"content":{"rendered":"\n<p>The only way to figure out how good you\u2019re doing is to compare yourself to your closest competitors. This way, <strong>you\u2019ll get a sense of direction<\/strong> and even get an early warning sign that you need to introduce some changes. Still, how does one do a successful competitor analysis? Here are a few things to set you straight.<\/p>\n\n\n<div class=\"wp-block-image\">\n<figure class=\"aligncenter size-full\"><img loading=\"lazy\" decoding=\"async\" width=\"600\" height=\"314\" src=\"https:\/\/www.price2spy.com\/blog\/wp-content\/uploads\/2022\/11\/competitor-analysis-1.png\" alt=\"Complete guide to competitor analysis\" class=\"wp-image-9754\" srcset=\"https:\/\/www.price2spy.com\/blog\/wp-content\/uploads\/2022\/11\/competitor-analysis-1.png 600w, https:\/\/www.price2spy.com\/blog\/wp-content\/uploads\/2022\/11\/competitor-analysis-1-300x157.png 300w\" sizes=\"auto, (max-width: 600px) 100vw, 600px\" \/><\/figure>\n<\/div>\n\n\n<h2 class=\"wp-block-heading\">Identifying Competitors<\/h2>\n\n\n\n<p>Let\u2019s say you want to enter the soft drinks business; would it make sense to compare yourself to Coca-Cola? Or, perhaps you want to start a fast-food stand. Does it make sense to immediately start competing against a local McDonald\u2019s franchise? The truth is that not everyone in your line of work, or even someone with whom you share a market with is a competitor. Therefore, the first step is to <strong>recognize your competitors<\/strong>.<\/p>\n\n\n\n<p>Also, keep in mind that <strong>just because you\u2019re competing for the same market<\/strong>, this <strong>doesn\u2019t automatically mean that the audience is either yours or theirs<\/strong>. For instance, while iPhone users usually stick to the iPhone, not even the biggest fan of McDonald\u2019s eats there every single day. The same goes for the fashion industry, sure, you like Louis Vuitton, but it\u2019s not like every clothing item you have has to be of this brand.<\/p>\n\n\n\n<p>Simply put, there are three major types of competitors:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong>Direct competitors<\/strong> are businesses that offer similar products and services. Customers usually choose directly between you and them. Analyzing, understanding, and out-competing them should be your priority. You can <a href=\"https:\/\/nikolaroza.com\/semrush-vs-ubersuggest\/\" target=\"_blank\" rel=\"noreferrer noopener nofollow\">use SEMrush or UberSuggest<\/a> to scope out your direct competitors based on the mutual keywords that your site and competing sites rank for.<\/li>\n\n\n\n<li><strong>Indirect competitors<\/strong> are the ones whose product works as an alternative to yours. A person who wants to go out and have some fun with alcohol may choose a beer over a wine, or the other way around. So, even though a brewery and a vineyard aren\u2019t direct competitors, it\u2019s not like they don\u2019t share the same market at all.<\/li>\n\n\n\n<li><strong>Substitute competitors<\/strong> are the ones who share your market ,even though their product is not the same. Why do they matter? Well, because people have limited budgets and, sometimes, they have to choose what to buy.<\/li>\n<\/ul>\n\n\n\n<p>With this out of the way, you can start with the analysis.<\/p>\n\n\n<div class=\"wp-block-image\">\n<figure class=\"aligncenter size-full\"><img loading=\"lazy\" decoding=\"async\" width=\"600\" height=\"314\" src=\"https:\/\/www.price2spy.com\/blog\/wp-content\/uploads\/2022\/11\/Identifying-Competitors-1.png\" alt=\"competitor analysis - identifying competitors\" class=\"wp-image-9756\" srcset=\"https:\/\/www.price2spy.com\/blog\/wp-content\/uploads\/2022\/11\/Identifying-Competitors-1.png 600w, https:\/\/www.price2spy.com\/blog\/wp-content\/uploads\/2022\/11\/Identifying-Competitors-1-300x157.png 300w\" sizes=\"auto, (max-width: 600px) 100vw, 600px\" \/><\/figure>\n<\/div>\n\n\n<h2 class=\"wp-block-heading\">Gather Crucial Information<\/h2>\n\n\n\n<p>Once you\u2019ve researched your competition and know what types of competitors there are, try to make a <strong>list of your closest competitors<\/strong>. Most accurately, these are the businesses that sell similar products and services to the same local audience. Once you make a list, try to establish one of several categories.<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong>Product:<\/strong> When reviewing the product, it\u2019s important that you observe it relative to your product. Is it of higher quality? Does it have extra features? Does it last longer\/have more uses? Here, you can\u2019t afford to be biased.<\/li>\n\n\n\n<li><strong>Pricing:<\/strong> Most importantly, you need to figure out how the prices compare. However, you\u2019d need to pair this research with a <a href=\"https:\/\/ramp.com\/vendor-management-guide\/spend-analysis\" target=\"_blank\" rel=\"noreferrer noopener nofollow\">spending analysis of your company<\/a> to better understand the price ranges you can offer. Keep in mind that people don\u2019t always go with the cheapest option but if the qualities are similar and their product is superior, you may have a blueprint\/production-related problem.<\/li>\n\n\n\n<li><strong>Location:<\/strong> People consider the location of a business far more often than they realize. Moreover, there are a great number of people who are impulse buyers and decide to make a purchase when they pass by the store\/office.<\/li>\n\n\n\n<li><strong>Reputation:<\/strong> Another thing worth considering is the <a href=\"https:\/\/referralrock.com\/blog\/social-currency\/\" target=\"_blank\" rel=\"noreferrer noopener nofollow\">social currency<\/a> known as reputation. It takes time to build a reputation, but a blemish on it may remain for years after you\u2019ve successfully fixed the issue. Still, reputation is an asset, and you need to treat it as such.<\/li>\n\n\n\n<li><strong>Team:<\/strong> Do they have a bigger team than yours? If they\u2019re running a specialist-based operation (a dental office, for instance), you can review the resumes of individual employees (dentists) in this case. This way, you can compare your team to theirs directly.<\/li>\n\n\n\n<li><strong>Partnerships:<\/strong> This one is a bit trickier. You see, it might be difficult to figure out who their strategic vendors are, and especially what kind of deal they have with their suppliers.<\/li>\n<\/ul>\n\n\n\n<p>With these out of the way, you\u2019re off to a good start. If you don\u2019t want to start from scratch, you can use competitor analysis templates.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\">Make a System<\/h2>\n\n\n\n<p>Now that you have this data, you need to <strong>put it to good use<\/strong>. You see, knowing that your competitor charges less or that their product has 2 extra features is data, not information. Sure, it costs less, but does it deliver the same? If not, is the deficiency in performance justifiable by the lower cost? What is the ROI, and where does the customer get more value for their money?<\/p>\n\n\n\n<p>You need these answers to see just how competitive you are but these are not the information that you can get by simply comparing prices\/features. <strong>It\u2019s far more complex<\/strong> than that.<\/p>\n\n\n\n<p>Some prefer to make a <strong>competitive analysis table<\/strong>. Here, they evaluate each of these items with a figure from 1 to 10. For instance, if you\u2019re comparing yourself to a competitor in product quality, pricing, reputation, and location, you may have a total score of 4 to 40. This will give you a better idea of what you\u2019re dealing with, but it\u2019s still quite crude.<\/p>\n\n\n\n<p>\u201cThere is more to a competitive analysis than simply evaluating a few numbers. You need to understand what those numbers mean and how they impact your business,\u201d says Denis Risti\u0107, General Manager, <a href=\"https:\/\/askgamblers.com\" target=\"_blank\" rel=\"noreferrer noopener nofollow\">AskGamblers<\/a><\/p>\n\n\n\n<h3 class=\"wp-block-heading\">The flaws of this system<\/h3>\n\n\n\n<p>For instance, by scoring yourself as 10 in quality while having 2 in cost (which would mean that your product is of excellent quality but of a very high cost), you\u2019ll get a total score of 12. Your competitor, whose product performance is 7 but price is 6, would have a total score of 13 and slightly outcompete you. <strong>The problems with this system<\/strong> are:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong>A 1-10 scale is not always accurate, fair, or even plausible.<\/strong><\/li>\n\n\n\n<li><strong>Some factors may be more important than others.<\/strong><\/li>\n<\/ul>\n\n\n\n<p>So, how do you resolve this issue, score pricing and product quality on a scale of 1 to 10, and score the location of your business on a scale of 1 to 5? If so, why 5? Why not 3 or 8? The problem lies in the fact that <strong>the parameters<\/strong> of this system tend to be\u2026 well, <strong>arbitrary<\/strong>. This brings us to the very root of the problem, which is the fact that it\u2019s impossible to quantify competitiveness with 100% accuracy. You can say exactly how tall someone is, but when it comes to rating how pretty or kind they are&#8230;<\/p>\n\n\n\n<p>To make it work, <strong>you need something more reliable and accurate<\/strong>. Still, it\u2019s better to do this kind of crude analysis than to skip the analytics altogether.<\/p>\n\n\n<div class=\"wp-block-image\">\n<figure class=\"aligncenter size-full\"><img loading=\"lazy\" decoding=\"async\" width=\"600\" height=\"314\" src=\"https:\/\/www.price2spy.com\/blog\/wp-content\/uploads\/2022\/11\/competitor-analysis-1-1.png\" alt=\"Competitor Analysis guide\" class=\"wp-image-9757\" srcset=\"https:\/\/www.price2spy.com\/blog\/wp-content\/uploads\/2022\/11\/competitor-analysis-1-1.png 600w, https:\/\/www.price2spy.com\/blog\/wp-content\/uploads\/2022\/11\/competitor-analysis-1-1-300x157.png 300w\" sizes=\"auto, (max-width: 600px) 100vw, 600px\" \/><\/figure>\n<\/div>\n\n\n<h2 class=\"wp-block-heading\">You Don\u2019t Have to Be 100% Accurate<\/h2>\n\n\n\n<p>So, with all these flaws that we\u2019ve just mentioned, how do you get accurate information? That\u2019s the neat part \u2013 <strong>you don\u2019t<\/strong>!<\/p>\n\n\n\n<p>Even if you pay millions to an analytics team to determine your competitiveness, you still won\u2019t get 100% accurate answers. After all, <strong>you\u2019re trying to put into numbers something that\u2019s almost unquantifiable<\/strong>. Sure, the report that you get from them will be far more accurate than if you were to do it on your own (via a method we described in the previous section).<\/p>\n\n\n\n<p>It\u2019s not just about the system, it\u2019s also about the <strong>data available not being completely accurate<\/strong> all the time. Even when it comes to the profits, you usually get access to either what they\u2019ve disclosed (which can be dishonest or partial information) or what you\u2019ve projected based on some parameters. <a href=\"https:\/\/www.price2spy.com\/blog\/competitor-price-tracking-how-to-monitor-your-competitors\/\">Competitor price monitoring<\/a> is likely the only factor that you can track with utmost accuracy.<\/p>\n\n\n\n<p>The truth is that you don\u2019t have to be as accurate. Competitor analysis is performed to give you <strong>a general idea of where you\u2019re standing<\/strong> and how you are faring against your closest competitors. It\u2019s there to tell you if you need to put in some extra work or make a change.<\/p>\n\n\n\n<p>The fact that you\u2019re reviewing different factors of your business individually means that you may even get <strong>a crucial piece of information<\/strong> about what should be tweaked. For instance, if you\u2019re far more expensive than your competitors, that may be the reason why they\u2019re doing better. If their product has more features, it makes the direction that you need to take to boost your success quite obvious.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\">Forging Your Strategy<\/h2>\n\n\n\n<p>Once you understand the market and the audience, you\u2019ll be ready to forge your strategy. Doing a competitor analysis before <strong>making your USP (<\/strong><a href=\"https:\/\/betterproposals.io\/blog\/how-to-write-a-sales-proposal\/\" target=\"_blank\" rel=\"noreferrer noopener nofollow\"><strong>unique sales proposition<\/strong><\/a><strong>)<\/strong> is probably the best course of action that you could take.<\/p>\n\n\n\n<p>For instance, if the audience finds the cost to be <strong>a major issue<\/strong>,<strong> <\/strong>it will help you<a href=\"https:\/\/www.futurelearn.com\/info\/blog\/how-to-create-a-marketing-strategy\" target=\"_blank\" rel=\"noreferrer noopener nofollow\"> make a marketing strat<\/a><a aria-label=\"e (opens in a new tab)\" href=\"https:\/\/www.futurelearn.com\/info\/blog\/how-to-create-a-marketing-strategy\" target=\"_blank\" rel=\"noreferrer noopener\">e<\/a><a href=\"https:\/\/www.futurelearn.com\/info\/blog\/how-to-create-a-marketing-strategy\">gy<\/a> that emphasizes that your product\/service does more for less money. This is usually a winning strategy but, then again, it\u2019s not true in every industry. For instance, when it comes to risky surgery, you want the best surgeon available, not the best within a certain price range.<\/p>\n\n\n\n<p>Also, the majority of marketing strategies rely on <strong>generating return customers<\/strong> and prolonging the customer lifecycle for as long as possible. Then again, some products like movies and escape rooms are one-time purchases. Just think about it, how many chess sets does one household need? So, naturally, the equation changes, as well.<\/p>\n\n\n\n<p>In other words, when making your strategy, you need to conduct a competitor analysis, market analysis, and <a href=\"https:\/\/www.notifyvisitors.com\/pb\/blog\/ecommerce-marketing-strategies\" target=\"_blank\" rel=\"noreferrer noopener nofollow\"><strong>make a custom strategy<\/strong><\/a> for your product\/business.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\">Wrap Up<\/h3>\n\n\n\n<p>At the end of the day, you need to identify your competitors, decide on the relevant data, gather the data, and come up with a comparison system that makes sense. There are numerous templates and suggestions out there but the truth is that you need to find a system that makes sense in your respective field. This will help you make the best possible marketing strategy, as well as <strong>improve your product and <\/strong><a href=\"https:\/\/engatica.com\/video\/empower-your-business-models-with-ai?contentId=619772ba62b800c564a4346c\" target=\"_blank\" rel=\"noreferrer noopener nofollow\"><strong>business model<\/strong><\/a> as you go.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>The only way to figure out how good you\u2019re doing is to compare yourself to your closest competitors. This way, you\u2019ll get a sense of direction and even get an early warning sign that you need to introduce some changes. Still, how does one do&#8230;<\/p>\n","protected":false},"author":18,"featured_media":9785,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[628],"tags":[811,352,758],"class_list":["post-9750","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-guest-post","tag-competitor-analysis","tag-competitor-monitoring","tag-ecommerce-businesses"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v27.3 - https:\/\/yoast.com\/product\/yoast-seo-wordpress\/ -->\n<title>Complete Guide to Competitor Analysis<\/title>\n<meta name=\"description\" content=\"Competitor analysis requires identifying your competitors, deciding on the relevant data, gathering the data, and coming up with a comparison system.\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" 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Bjelobrk","image":{"@type":"ImageObject","inLanguage":"en-US","@id":"https:\/\/www.price2spy.com\/blog\/wp-content\/uploads\/2023\/03\/marijana-bjelobrk_avatar-96x96.jpg","url":"https:\/\/www.price2spy.com\/blog\/wp-content\/uploads\/2023\/03\/marijana-bjelobrk_avatar-96x96.jpg","contentUrl":"https:\/\/www.price2spy.com\/blog\/wp-content\/uploads\/2023\/03\/marijana-bjelobrk_avatar-96x96.jpg","caption":"Marijana Bjelobrk"},"description":"Marijana Bjelobrk is a Marketing Manager who has been writing for Price2Spy since November 2021. 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