Download a Free Competitor Analysis Template
What is a competitor analysis?
A competitor analysis investigates the strengths and weaknesses of a company’s industry competitors. Basically, a competitor analysis is doing a SWOT analysis, but for the competition instead of your own company.
The purpose of a competitor analysis is to develop a strong marketing strategy. It is an important part of a marketing plan and business plan. By understanding its competition a company can identify potential opportunities as well as possible threats.
A competitor can be:
- direct – sells the same products or services to the same market;
- indirect – sells a substitute product or service to the same market; or
- potential – possible future competitors.
For a competitor analysis example, see Entrepreneur Magazine’s PDF document.
How to do a competitor analysis
The first step is to identify and research current and future competitors. An industry analysis can help identify who the competitors are. Find out as much information as possible about your competitors by researching online, gathering marketing materials and checking the local newspapers.
There are various competitor analysis formats. You can structure your competitor analysis according to SWOT. See Microsoft’s competitive analysis template using SWOT. Also, see Microsoft’s other competitor analysis templates for Excel. You can also download a Project Overview Presentation PPT template – which includes a competitive analysis.
Determine the competitor’s strengths and weaknesses by considering both the customer and the competitor’s perspective. Use a PEST analysis to establish if changes to political, economic, social and technological factors would be considered either an opportunity of a threat by the competitor.