1. what is competitor analysis

Competitor analysis is a strategic market research approach designed to assess competitors' strengths, weaknesses, opportunities, and threats, as well as their products, services, positioning, channels, interactions, and pricing strategies.

The purpose of competitor analysis is to understand the competitive environment, discover their own competitive advantages and disadvantages, look for the possibility of differentiation and innovation, and formulate effective competitive strategies and action plans.

The importance of competitor analysis is that it can help companies:

Understand the needs, trends and changes of the market;

Identify the strategic intentions, core competencies and potential threats of competitors;

Discover the strengths and weaknesses of competitors, as well as their own opportunities and challenges;

Develop targeted and differentiated products, services and marketing strategies;

increase competitiveness and market share;

Predict the future trends and countermeasures of competitors;

Promote innovation and continuous improvement.

Process and steps for 2. competitor analysis

The process and steps of competitor analysis can be divided into the following eight stages:

1. Identify competitors

A competitor is an enterprise that provides the same or similar products or services in the same market or market segment, meets the same or similar customer needs, and has the same or similar competitive objectives.

There are several ways to identify competitors, such:

View classified websites, I .e. other websites listed on professional industry or product classification websites;

View customer feedback, that is, other websites obtained from the target customer's comments, evaluations, questions and answers, etc;

View industry reports, I .e. other websites taken from industry reports published by authoritative industry bodies or the media.

After identifying competitors, they need to be classified. According to different dimensions, competitors can be divided into the following types:

Direct competitors, I .e. competitors that offer products or services that are identical or very similar to their own, such as Coca-Cola and Pepsi;

Indirect competitors, I .e. competitors that offer products or services that are somewhat alternative or complementary to their own, such as coffee and tea;

Potential competitors, I .e. competitors that have the ability or willingness to enter their own market or market segment, such as Amazon and Walmart;

Heterogeneous competitors, that is, competitors that offer completely different from themselves but meet the needs of the same type of customers, such as movie theaters and amusement parks.

2. Collect background information

Collecting background information is to understand the basic situation of competitors, including their history, size, finance, organization, culture, etc. There are several ways to gather background information, such:

Check the official website, that is, get their introduction, vision, mission, values, development process, organizational structure, partners and other information from the competitor's official website;

View social media, that is, obtain information about competitors' dynamics, activities, interactions, word of mouth, etc. from their social media accounts;

View news reports, that is, to obtain competitors' news reports, announcements, statements, interviews and other information from various media channels;

View the company database, that is, from the professional company database website to obtain competitor registration information, shareholder information, financial information, investment information, mergers and acquisitions information and other information;

View the industry association, that is, from the industry association or organization to obtain the competitor's membership information, qualification information, honor information, activity information and other information.

After collecting background information, it is necessary to organize and analyze it, and extract the development history, strategic direction, core competitiveness, corporate culture and other key points of competitors.

3. Research products and services

Studying products and services is to understand the characteristics, functions, advantages, disadvantages, prices, evaluations, etc. of competitors' products or services. There are many ways to research products and services, such:

View product introductions, that is, obtain information about their products or services, descriptions, demonstrations, cases, etc. from competitors' official websites or other platforms;

Check the price strategy, that is, obtain the price, discount, package, membership and other information of their products or services from the official website of competitors or other platforms;

View user reviews, I .e., obtain user reviews, ratings, comments, feedback and other information about their products or services from competitors' official websites or other platforms;

Try to buy, that is, try to buy or use competitors' products or services as users, and experience their purchase process, delivery method, after-sales service and other information;

SWOT analysis, which is based on the strengths (Strengths), weaknesses (Weaknesses), opportunities (Opportunities) and threats (Threats) of competitors' products or services to identify their competitive strengths and weaknesses

4. Analyze positioning and objectives

The analysis of positioning and objectives is to understand the market positioning and target customers of competitors, as well as their brand image, value proposition, differentiation strategy and so on. There are several ways to analyze positioning and targeting, such:

Check the brand logo, that is, obtain their brand name, logo, slogan, color, font and other information from the competitor's official website or other platform;

Viewing value propositions, I .e. obtaining their value propositions from competitors' official websites or other platforms, I .e. the unique values or solutions they promise to customers;

View target customers, I .e., obtain information about their target customers' characteristics, needs, preferences, behaviors, etc. from competitors' official websites or other platforms;

View differentiation strategies, I .e., get their differentiation strategies from competitors' official websites or other platforms, I .e., how they differentiate from other competitors in terms of products, services, brands, channels, etc;

Positioning map, that is, according to the competitor's positioning and target in a two-dimensional coordinate system to draw their position, in order to compare and analyze their similarities and differences.

After analyzing the positioning and objectives, it is necessary to organize and analyze them, from which to extract the market positioning of competitors, target customers, brand image, value proposition, differentiation strategy and other key points.

5. Research distribution channels

Investigating distribution channels is to understand the type, quantity, coverage, efficiency, and cost of competitors' distribution channels. There are many ways to investigate distribution channels, such:

Check the channel type, that is, the type of distribution channel obtained from the competitor's official website or other platforms, such as direct sales, agency, distribution, alliance, e-commerce, social networking, etc;

Check the number of channels, that is, the number of distribution channels obtained from competitors' official websites or other platforms, such as how many stores, agents, distributors, partners, etc;

View channel coverage, I .e. obtain the coverage of their distribution channels from competitors' official websites or other platforms, such as how many regions, countries, markets, etc. are covered;

View channel efficiency, that is, obtain the efficiency of their distribution channels from competitors' official websites or other platforms, such as sales, profits, conversion rates, satisfaction, etc. of each channel;

View channel costs, that is, the cost of obtaining their distribution channels from competitors' official websites or other platforms, such as operating costs, maintenance costs, and promotion costs for each channel.

After investigating the distribution channels, it is necessary to organize and analyze them to extract the strengths, weaknesses, opportunities and threats of competitors' distribution channels.

6. In-depth interaction strategy

In-depth interaction strategy is to understand the content, form, frequency, effect and other aspects of the competitor's interaction strategy. Interaction strategy refers to the way and means by which competitors communicate, interact and build relationships with target customers, such as advertising, public relations, social networking, content, activities, etc. There are several ways to drill down into an interaction strategy, such:

View advertising strategies, I .e., obtain their advertising strategies from competitors' official websites or other platforms, such as on which media they place their advertisements, and the content, form, style, and objectives of the advertisements;

View public relations strategies, that is, obtain their public relations strategies from competitors' official websites or other platforms, such as how they cooperate, communicate, and influence with the media, governments, and social groups;

View social strategies, that is, obtain their social strategies from competitors' official websites or other platforms, such as which social media accounts they have established, and the content, form, style, and goals of social media;

View content strategy, that is, obtain their content strategy from competitors' official websites or other platforms, such as how they produce, publish, and disseminate valuable content, the content, form, style, and goals of the content;

Check the activity strategy, that is, get their activity strategy from the official website of competitors or other platforms, such as how they organize, participate in and promote various online or offline activities, the content, form, style, goal, etc.

After going deep into the interaction strategy, you need to organize and analyze it to extract the strengths, weaknesses, opportunities, and threats of the competitor's interaction strategy.

7. Try to buy

Trying to buy is trying to buy or use a competitor's product or service as a target customer to experience their purchase process, delivery method, after-sales service, etc. There are several ways to buy, such:

Check the purchase process, that is, get their purchase process from competitors' official websites or other platforms, such as how many steps there are in their purchase process, what information needs to be provided for each step, and what tips or guidance are there, etc;

Check the delivery method, that is, obtain their delivery methods from the competitor's official website or other platforms, such as what their delivery methods are, such as express delivery, self-delivery, e-mail, etc., delivery time, cost, quality, etc;

Check after-sales service, that is, get their after-sales service from competitors' official websites or other platforms, such as what their after-sales service is, such as return and exchange, maintenance, consultation, complaints, etc., after-sales service process, conditions, efficiency, etc.

After trying to buy, it needs to be collated and analyzed to extract the advantages, disadvantages, opportunities and threats of the competitor's buying experience.

8. Do a SWOT analysis

SWOT analysis is based on the information collected and analyzed earlier to summarize and evaluate the strengths (Strengths), weaknesses (Weaknesses), opportunities (Opportunities) and threats (Threats) of competitors in order to develop appropriate competitive strategies and action plans. There are several ways to conduct a SWOT analysis, such:

Make a SWOT matrix, that is, in a four-grid matrix, list the strengths, weaknesses, opportunities and threats of competitors, so that they can see their strengths, weaknesses and opportunities at a glance;

Make a TOWS matrix, that is, in a four-grid matrix, list the coping strategies for competitors' strengths, weaknesses, opportunities and threats, such as using strengths to seize opportunities (SO strategy), overcoming weaknesses to seize opportunities (WO strategy), using strengths to avoid threats (ST strategy), overcoming weaknesses to avoid threats (WT strategy), etc;

Make VRIO analysis, that is, according to whether the resources or capabilities of competitors have value (Value), scarcity (Rarity), non-replicability (Inimitability) and organization (Organization) four dimensions of analysis to determine whether their resources or capabilities have a lasting competitive advantage.

After conducting a SWOT analysis, it needs to be collated and analyzed to extract the strengths, weaknesses, opportunities and threats of competitors, as well as coping strategies and action plans for them.

3The Value of Competitor Analysis

The value of competitor analysis is that it can help Champs Consulting:

Understand the competitive environment, identify your competitive strengths and weaknesses, look for possibilities for differentiation and innovation, and develop effective competitive strategies and action plans;

Understand customer needs, find customer pain points and needs, provide products and services that are more in line with customer expectations, and improve customer satisfaction and loyalty;

Understand market opportunities, discover market needs, trends and changes, seize market opportunities and potential, and expand market share and influence;

Understand competitive threats, find out the strategic intention, core competitiveness and potential threats of competitors, predict the future trends and countermeasures of competitors, and avoid competitive risks and crises;

Promote innovation and improvement, discover the strengths and weaknesses of competitors, learn from the strengths and experiences of competitors, improve their own shortcomings and problems, and improve their own competitiveness and level.