What Is Competitive Analysis?
Competitive analysis maps who your competitors are, what they offer, and where you can win. Learn how to do one that drives real strategic decisions.
Key Takeaways
- Include direct competitors, indirect competitors, and status quo (do nothing) in your analysis
- Analyse: product, pricing, positioning, channels, customer reviews, and team
- The goal is to find where you can win — not just to document the landscape
- Update your competitive analysis quarterly — markets move fast
What competitive analysis is
Competitive analysis is a systematic assessment of your competitive landscape — who your competitors are, what they offer, how they position themselves, what they charge, where they are strong, and where they have gaps. The goal is not to produce a comprehensive database of competitor information but to identify where you can win — which customer segment is underserved, which problem is inadequately solved, and which positioning gap you can occupy.
Who to include
A complete competitive analysis includes three types of competitor. Direct competitors: businesses offering similar products to similar customers. Indirect competitors: businesses solving the same customer problem with a different approach — a business intelligence tool competes with Excel, not just other BI tools. Status quo: the do-nothing option — the customer continues with their current approach. The status quo is often the strongest competitor because change requires effort, and inertia is powerful. If you cannot articulate why the cost of staying put exceeds the benefit of your solution, you will struggle to win.
What to analyse
For each direct competitor, analyse: product and features (what does it do and what does it not do?), pricing model and price points, target customer and positioning, marketing channels and messaging, customer reviews and NPS (Trustpilot, G2, App Store are valuable sources), recent product updates and funding (a well-funded competitor who just hired a senior product team is a different threat than one who has been quiet for two years), and team and expertise. Primary research — actually buying and using competitor products — is essential. Reading about a competitor is not the same as experiencing their product.
Turning analysis into strategy
The output of a competitive analysis should be a strategic decision: where will you compete and where will you not? Porter's framework of differentiation (be better), cost leadership (be cheaper), or focus (serve a niche better than anyone) provides the strategic options. For most SMEs, focus is the right answer — find the customer segment that is underserved by generalist competitors and serve them exceptionally well. This is almost always more achievable than trying to out-resource a well-funded generalist.
Keeping it current
A competitive analysis completed once becomes stale within months in fast-moving markets. Set up Google Alerts for competitor names, monitor their job postings (hiring tells you where they are investing), follow their product changelogs and press releases, and re-read customer reviews quarterly to see if the sentiment is shifting. Assign one team member ownership of competitive intelligence — not as a full-time role, but as a responsibility to surface important changes to the leadership team.