Competitor analysis is a key activity in every company’s strategic decision-making process. Conducting a thorough competitive analysis involves several steps to gain insights into the competitors' strengths, weaknesses, strategies, and market positioning. Competitor analysis can be made a lot more efficient with the right tools.

Why is competitor analysis important?

Information gathered via competitor analysis will support strategic market positioning, pricing, and tapping into opportunities that have been overlooked by competitors. Competitive analysis is similar to market mapping or comparable analysis since it builds a comprehensive image of a certain industry. It can be done by consultants, internal company strategy teams and also by marketing professionals.

Competitor analysis will generate valuable in-depth information on how similar industry players are doing. Management can mirror the company's strengths and weaknesses against various types of competitors and set benchmarks for performance. This way the company can take action on the weaker areas and ensure setting the right KPIs for growth.

Furthermore, finding all competitors and studying their performance is necessary to keep and improve the company’s position in the market. Early identification of potential threats or unique value propositions allows for adjusting strategies to counter them effectively.

Competitor data helps in creating a more effective strategy and gaining a competitive edge. Knowing both big and small competitors helps to understand where a company can differentiate. It can specialize in areas the larger competitors overlook or areas where smaller competitors cannot match its capabilities. 

What is more, competitors may also possess capabilities that the company needs. Competitor data can sometimes help identify potential acquisition targets, or the other way around, potential buyers. 

Why is it important to know and understand who all your competitors are?

A broad understanding of the competitive landscape helps a company shield itself from surprises. Ignoring smaller competitors can create blind spots in the analysis. These competitors might disrupt the market unexpectedly, catching established players off guard if they haven’t been tracking their activities. 

New competitors may reveal emerging trends and shifts in consumer preferences before they become mainstream. Less well-known competitors might be targeting specific niches or segments of the market that larger players overlook. Recognizing these opportunities can give an advantage in underserved markets.

Small or emerging competitors should also be monitored for new innovative ideas. They often have more flexibility to experiment and innovate quickly and disrupt traditional market dynamics. Monitoring these activities can provide fresh insights into new marketing strategies, product offerings, or business models. 

Therefore, identify not-so-obvious competitors and monitor competition to adapt strategies accordingly. Keeping track of new competitors ensures that the management is fast to make decisions if new disruptive competitors emerge and maintain competitive advantage.

What factors should you consider in competitor research?

There are a few factors to consider when conducting a competitor research: 

1. Identify all competitors with their key data points

Competitive analysis starts by identifying direct and indirect competitors. Collect key competitor data points on owner and key decision makers, location, financials, employee count, and market positioning. 

Identification can be made much easier with a competitor research tool. AI based tools such as Inven can use keywords that represent actual business activities of the company, rather than fixed industry codes. 

2. Analyze their online presence

The second step is to analyze how the company is present online in websites, social media profiles, news, and marketing. Evaluate their marketing channels, campaigns, content strategies, and messaging. Gather insights into your competitors' SEO performance, keyword rankings, and email marketing campaigns.

In this stage, make use of marketing intelligence tools (listed later in this article) to understand the key metrics.

3.  Build a company profile, including their strengths and weaknesses 

Build a comprehensive understanding of the competitor's performance across various categories using widely used frameworks. These categories encompass offerings, market position, financials, marketing, customer experiences, and unique selling points (USPs).

Collect additional pieces of information manually from various sources, such as brochures and customer interviews, to fill in the data points that are missing.

Identify competitors' strengths and weaknesses. Consider how they position themselves in the market and what value they promise to customers. Read customer reviews, comments, and feedback about your competitors. Are they known for exceptional customer service, high-quality products, unique features, or competitive pricing? Look at what areas they struggle in. 

4. Pinpoint threats and opportunities to your business

After conducting a thorough analysis, ascertain the potential threats posed by competitors to your business. Additionally, pinpoint any market opportunities they may have overlooked. Leverage this information to identify areas where you can differentiate and surpass their performance.

5. Set benchmarks and develop strategy

Benchmarking involves comparison of processes, performance, or products against competitors or industry leaders. Look at relevant metrics, such as conversion rates and customer satisfaction, and identify best practices and areas for improvement. 

The competitor analysis will provide valuable insights to take advantage of the opportunities you've identified and adjust strategy and KPIs accordingly. Quality data on competitors is also a valuable resource for assessing a firm's valuation with a comparable company analysis.

Competitor analysis frameworks

Competitor analysis frameworks provide structured approaches to gather, organize, and analyze information. 

Here are some of commonly used frameworks in competitor analysis:

  • SWOT analysis: SWOT stands for Strengths, Weaknesses, Opportunities, and Threats. It's a widely used framework to create a picture of competitive position. Strengths and weaknesses are internal and opportunities and threats external to the company.

  • Perceptual mapping: This graphical tool visually represents how customers perceive various brands or products in the market. It shows the relative positioning of competitors based on attributes important to customers.

  • Strategic group analysis: This framework involves grouping competitors based on similar strategies, market segments, or business models. It helps identify which companies are direct competitors and how they differ from others in the market.

  • Porter's five forces: Focuses on the competitive forces that shape an industry. It includes analyzing the threat of new entrants, competitive rivalry, bargaining power of suppliers and buyers, and a threat of substitutes.

  • Critical success factors (CSFs): CSFs are the key areas in which a company must excel to be successful in its market. It can also include analyzing competitors' strengths and weaknesses in relation to these factors.

  • Competitive Profile Matrix (CPM): CPM is a strategic management tool that compares a company to its major competitors based on key success factors. It assigns scores to different factors and provides a quantitative assessment of the competitive position.

  • Product Life Cycle Analysis: This framework tracks the stages of a product's lifecycle, from introduction to decline. By analyzing where competitors' products are in this cycle, a company can anticipate their future moves and adjust their strategy accordingly.

The choice of framework depends on the specific goals of your analysis and the depth of insight you're seeking. Following the step-by-step guide to discovering competitors for any company is a good starting point.

Competitor analysis tools

There are different styles of competitor research tools for various purposes. One group of tools are designed for market mapping and business performance, others more so for analyzing the competitors’ efforts in marketing and communications. Using the following tools makes gathering data more efficient.

Here are great tools for finding competitors:

  • Inven: Inven is an efficient tool for finding competitors and their key data points. Inven builds a list of competitors with information such as financials, number of employees, website, and description of the company. All company owner and decision-maker information is available with just one click. Insights from the search can be used to provide an overall picture of the market.

  • Owler: Owler is a community-based business information research platform providing competitive insights, news and alerts. Owler’s members contribute to the company profiles of the companies they work for. They have competitors, industry trends, funding activities, and company news, which can be used for analysis.

  • Capterra: Capterra is a platform for finding and comparing software companies. They offer a collection of user reviews, ratings, and vendor information across diverse software categories, as well as pricing model information. Capterra also generates material about various software categories.

  • G2: G2 is a software marketplace. G2 provides competitor insights in the form of discussions and reviews from their buyers. Their data can support understanding of market positions and benchmarking. G2 also has comparison tools to compare different software products side by side, highlighting their features, pricing, and user satisfaction scores.

  • Crunchbase: Crunchbase is a company insights platform with information from early-stage startups to the Fortune 1000. Crunchbase provides information about industry trends and data on funding rounds, key personnel, acquisitions, and partnerships.

Here are great tools for analyzing competitors’ online presence:

  • SEMrush: SEMrush is designed especially for marketing insights. They help to understand competitors' messaging, advertising, and SEO performance. SEMrush’s tools and reports can help in areas such as keyword research, content- and PR analysis. They also offer domain analytics.

  • Similarweb: Similarweb follows competitors’ website and social media performance. They combine traffic data and competitors’ visitor behavior, alongside paid advertising, affiliate, and SEO content. Similarweb shows the channels getting the most traffic within an industry alongside geographic and demographic data.

  • Mintel: Mintel is a market research firm that provides research reports and insights into consumer trends. Their offerings include intelligence about product launches, promotions, media channels, and competitive landscape in specific industries. 

  • Ahrefs: Ahrefs is a SaaS company that creates online SEO tools. Their tool offers competitor marketing analysis, including backlink profiles, keyword rankings, content analysis, and more. They help to understand competitor search traffic and website analytics.

  • Crayon: Crayon is a competitive intelligence platform that offers information on pricing, products, messaging, and design changes in the market. They scan competitors’ online presence and automatically assign activities to categories for later analysis.

  • BuzzSumo: Primarily used for content analysis, BuzzSumo helps you identify which content pieces are performing well in each industry. This can give insights into competitors' content strategies. 

  • Moz: Alongside its SEO features, Moz provides a competitive analysis toolset to help understand competitors' keyword rankings, link profiles, and domain authority.

Conclusion: Combination of tools for best results

Competitive analysis is an ongoing process. Competitors can change strategies, launch new products, or adapt to market trends. It is important to map out all the competitors, both the ones that are already well-known, and the less known. 

A combination of two tools for different purposes works best for successful competitor research. 

Inven's tool can best be used to identify all of the hidden competitors and relevant data points for them. To reach the best results it is reasoned to look into combining Inven with SEMrush or Ahrefs, for example. 

One tool to identify the relevant players in the market and another for understanding their online presence. 

In-depth understanding of all competitors, regardless of their size or prominence, contributes to better decision-making and competitive advantage.