• Skip to primary navigation
  • Skip to main content
  • Skip to primary sidebar

PESTLE Analysis

SWOT and Business Analysis Tools

  • PEST Analysis
    • What is PESTLE Analysis?
    • How to Do a PEST Analysis
    • PESTLE Analysis Templates
    • ALL PEST Articles
  • SWOT Analysis
    • What is a SWOT Analysis?
    • How to Do a SWOT Analysis
    • SWOT Analysis Templates
    • SWOT Analysis Examples
    • ALL SWOT Articles
  • Business Analysis
    • PESTEL Analysis
    • STEEP Analysis
    • Marketing Analysis
    • Environmental Analysis
    • Porter’s 5 Forces Analysis
    • VRIO Analysis
    • Outlier Analysis
    • BCG Matrix
    • Marketing Mix
    • Horizontal Integration
  • Students
  • Entrepreneurs

What is Competitive Analysis and How to Use It

Jun 22, 2016 by Kiesha Frue

To strengthen the success of your product, competitive analysis is used to identify competitors in your market and analyze their strategies. Using online tools, you can access and monitor competitor’s digital information including domain authority, social media outreach, and keyword analysis.

Contents

  • Why competitive analysis
  • How to use competitive analysis
  • When to use competitive analysis

Why competitive analysis

The point is to see what’s working for your competitor, what isn’t working (or what they’re ignoring), and what this means for the success of your product.

For example, after some digging, you may see your competitor used primarily Facebook Ads to reach customers. They’ve run multiple campaigns but each time the duration has been reduced.

Why is that?

Perhaps they’ve had less outreach with each campaign. Perhaps they’ve seen fewer conversions. Or maybe they’re now targeting a new audience who are mostly found on Instagram or Pinterest.

Regardless of the reason (though it’s beneficial for you to find it), the competitor did not get the results they were expecting. So they’ve shifted focus. And if you hadn’t seen this correlation, you might’ve burned money. But since you used competitive analysis and saw the pitfall, you’re consciously able to avoid it.

How to use competitive analysis

When conducting competitive analysis, many areas should be covered. You’re evaluating competitor’s marketing efforts and successes, profitability, and patterns of growth. It’s an analysis of each step they’ve taken and how to avoid their mistakes or capitalize on their success.

You can do a competitive analysis on your own. It’ll only cost you time to answer these questions:

  • What products/services do they offer?
  • Who is their target audience (and why)?
  • What’s their current marketing strategies?
  • What was their past marketing strategies (and why did they change)?
  • Which social media profiles do they have (if any)?
  • What are their strengths? Their weaknesses?
  • How could they threaten the livelihood of your business?

While some answers will be strictly analytical, it’s important to identify the why whenever you can. For example, why do they offer that specific product to that particular group of people? Or why did they choose that marketing channel over others?

You want to get inside their head and understand their reasoning. It can help you understand the market better and help you realize their weaknesses. If you can identify the weaknesses, your firm can capitalize on it. This includes:

  • Developing products around customer complaints
  • Acknowledging user bases currently ignored

Competitive analysis helps identify potential threats while they’re developing. In turn, this lets you prepare for threats, saving you from potential revenue or profit loss.

For example, your competitor has found a manufacturer who can cut their costs down by 20%. They’ll advertise the savings or possibly dedicate a campaign to attract new and previous customers. You can offset potential backlash by offering upgrades (additional value) despite your costs being 20% more than your competitors.

When to use competitive analysis

Use competitive analysis when developing a product or business. Or when the competition is developing a new service. In truth, to see a trend or change in their strategies, it may be best to do a competitive analysis every couple of months.

To offset any threats or potential challenges, exploit weaknesses, and regulate competitor strengths, use competitive analysis and get an edge on the competition.

Image: Tashatuvango/Shutterstock.com

Filed Under: Marketing Tagged With: competition, competitive analysis, competitor analysis

Truvid Video Tag

Primary Sidebar

About PESTLEanalysis.com

PESTEL or PESTLE analysis, also known as PEST analysis, is a tool for business analysis of political, economic, social, and technological factors.

PESTLEanalysis.com is an educational website collecting all the information and resources related not only to PESTLE but also SWOT, STEEPLE and other analysis that will come useful to business owners, entrepreneurs, and students alike.

what-is-pestle-analysis

What is PESTLE Analysis? An Important Business Analysis Tool

What is PESTLE Analysis? PESTLE analysis, which is sometimes referred to as PEST analysis, is a concept in marketing principles. Moreover, this concept is used as a tool by companies to track the environment they’re operating in or are planning to launch a new project/product/service, etc. So, if

Latest Articles

video-conferencing-business-meeting

Reviews About a Technological Platform for Video Conferences and Chat for Business iMind

iMind is a video conferencing platform for video conferences, meetings, conference calls, and chat for business.

doordash-swot-analysis

DoorDash SWOT Analysis 2022

Our DoorDash SWOT analysis sheds light on some of the internal and external factors that affect the food delivery company, such as strengths and, weaknesses.

wells-fargo-swot-analysis

Wells Fargo SWOT Analysis 2022: Strengths and Threats for the Bank

This Wells Fargo SWOT analysis examines the Strengths, Weaknesses, Opportunities, and Threats of one of the top four banks in the banking industry in the US.

Copyright © 2022 · PESTLE Analysis · Powered by WP Engine · Contact · Permissions · Privacy · Sitemap