Everything you need to know to conduct a competitive analysis (plus template)

What is a competitive analysis?

A competitive analysis is a detailed examination of business intelligence data from across your industry and comparing it to your brand’s performance benchmarks—which enables you to identify your strengths, stay on the pulse of relevant market trends and carve out your unique value proposition. Your analysis should incorporate competitive intelligence data like your competitors’ website content, social media presence, brand positioning, pricing strategy, product tiers and even recent job postings.

A competitive analysis is essential for future-proofing your business. With the right intel, you can forecast where your industry and competitors are heading and lead your organization with a data-driven strategy and vision.

Why conducting a competitive analysis is business-critical

Competitive analysis insights are critical resources for every member of your team. Here are five ways to leverage your analysis company-wide:

1. Become customer-obsessed

Use competitive analysis to understand your customer more completely and from a new perspective. Analyze your competitors’ messages and product positioning to confirm the customers and pain points they’re targeting. Compare your findings with your personas and foundational documents like message architecture or value statements to identify any weaknesses in your strategy.

2. Inform product roadmaps

Armed with a competitive analysis, product teams have the information they need to incorporate highly requested competitor features into their roadmap. R&D teams can also assess market opportunities, helping to fill whitespace in the industry and gain an edge over the competition.

3. Enhance brand messaging

Competitor analysis research benefits teams at every point in customer acquisition. Marketing teams can tailor top-of-funnel messages to edge out the competition, and sales teams can create winning pitches based on competitor weaknesses. Sharing competitor intelligence and analysis org-wide empowers teams to build stronger content and close deals.

4. Identify competitive benchmarks and KPIs

Your competitors’ performance helps you understand how to measure your brand’s performance. For example, if a competitor exceeds industry benchmarks, then you know your performance needs to level up to remain competitive. Use competitor data to craft your goals and targets.

5. Prepare for new market entry and campaign launches

Understanding the state of your industry is integral to gaining entry into a new market or even launching a new campaign. Having a clear picture of your competitors paves the way for you to outline your market differentiators and position your brand’s unique stake in the industry.

Competitive analysis template

If you’re not sure how to get started, use a competitive analysis template for guidance. Our social media market research worksheet explores how you can use social media insights to analyze your performance and compare it to your competitors. This template will help you:

• Benchmark your competitors so you understand what success means within your industry and among your shared audiences.
• Dig into the strategies of your highest-performing competitors, and brainstorm your tactics to reach the same level of success while finding your niche.
• Share your findings with stakeholders to validate your approach and long-term vision.

Keep reading for step-by-step instructions on conducting a competitive analysis in the next section.

How to do a competitive analysis?

An impactful competitive analysis breaks down complex data into digestible learnings and actionable takeaways. Rather than just comparing metrics, product offerings or campaign taglines, your analysis should provide a complete view of your competitive landscape, find the “why” behind your competitors’ performance and answer specific questions that will help your business evolve.

Follow these steps to conduct a thorough yet focused analysis:

1. Choose your main focus

Step back and evaluate your industry from a bird’s-eye view. What are the major opportunities and challenges everyone in the space is facing? Who are the key players? What will the industry look like in five to 10 years?

After you’ve grounded your analysis in the big picture, pick a few focal points to hone in on. Your competitive analysis can inform every aspect of your business, so it’s important to be specific about your goals.

• Do you want to launch new products or features?
• Are you trying to create stand-out marketing campaigns?
• Do you want to ensure your new rebrand will resonate with your audience?
• Are you refining your sales strategy to close more deals?

Having a concrete goal lets you know where you need a deep dive and where it’s okay to stay surface-level.

2. Identify your key competitors

If you’re in a crowded industry, it might be tempting to track every competitor or only look into the largest companies. But pinpointing the top two to three true competitors will yield the best results for your research.

Remember, your top competitors are who your ideal customer would choose if they didn’t choose you. Those companies will have similar value propositions, a large market share and comparable offerings. Your main competition might not be the largest business overall. Instead, it’s the largest threat to you. To find out who these competitors are, talk to your sales team and customers. Also turn to tactics like social listening or competitive monitoring to learn which companies your audience associates with you.

3. Compare your product offerings

Now it’s time to channel your inner private investigator and start scouring your competitors’ product offerings. As you begin competitive product analysis, be honest with yourself about how your offerings stack up to the competition. What are the unique advantages of your products? Where does your competition have the upper hand?

If you need help answering these questions, consult feedback your customers have shared with your sales team or on review sites online.

4. Assess target market and positioning

For this step, have your target audience, personas and ideal customer profile resources on hand. Use them as a rubric to assess how well your audience’s needs and pain points are addressed in your competitors’ promotional materials.

• How many needs and pain points do your competitors claim to meet?
• Are they the same needs you address in your marketing materials?
• Are there still pain points being left unanswered?

Use these questions to identify unique benefits you aren’t promoting and find industry whitespace that your brand can fill in the future.

5. Review distribution channels and online presence

Once you have a sense of your competitors’ overall target market and positioning, crawl their distribution channels, website and social media profiles. Note how they share and present their content on and offline, and how their social media strategy comes to life. The competitive analysis template from the previous section will guide you.

6. Conduct a SWOT analysis

Finally, now that you have gathered all your competitive intelligence data and begun analyzing it, put it together in a SWOT analysis. By clearly laying out your competitors’ strengths, weaknesses, opportunities and threats, you’ll visualize the insights and make it shareable for stakeholders. Or create a SWOT for your brand at this stage using competitive landscape takeaways.

After you wrap up your SWOT framework, the competitive research, synthesis and dissemination aren’t done. Instead, promote a culture of competitive intelligence that empowers the collecting and sharing of data and analysis on a regular basis.

Note: If other strategy frameworks better illustrate the findings of your research and analysis, skip the SWOT in favor of the best option for you. There are no firm rules about what competitive analysis data sharing must look like as long as it provides value to stakeholders.

Tools for monitoring your competitors' performance

Some aspects of your research will be manual, but others are better off handled by technology and AI. The right competitive analysis tools will optimize your data collection, giving you more time to focus on your strategy. To analyze millions of social media posts, see how you rank in search engines and view historic insights in record time, check out these competitive analysis tools:

Sprout Social

Sprout Social’s suite of built-in competitor reports and listening tools gives you deep insight into what works for your industry, what resonates with your audience and where you need to adjust your strategy to stand out from the competition. Whether you’re looking for post volume, type and frequency, hashtag usage or audience growth, Sprout will aggregate that information into an actionable competitive analysis dashboard.

Go even deeper with network-specific performance reports and in-depth engagement data that shed light on how different types of content resonate with audiences across each major network, including Facebook, Instagram and Twitter.

Being able to swiftly gather these essential competitive insights will give you an advantage when making adjustments to your strategy and sharing your analysis with stakeholders.

Semrush

Semrush is a widely used SEO tool with industry-leading competitor analysis features. Use Semrush to pull your competitor’s backlinks and monitor changes in their traffic and ranking, like this sample dashboard demonstrates.

And here’s the piece of the analysis that provides a by-the-numbers view of who’s competing for their keywords:

This is a valuable tool for understanding who your competition is from a strictly SEO perspective. Highlight what keywords are targeted by competitors might directly influence your content strategy.

BuzzSumo

BuzzSumo allows you to look at the top-performing content for relevant topics for your brand and specific competitors. The tool looks at a piece of content’s engagement on social sites as well as its total reach. This helps you identify who is leading the pack in share of voice and industry thought leadership, and can help you brainstorm new ideas for your content calendar.

Want to learn more? Read our comprehensive list of social media, SEO, content, email and advertising competitor analysis tools.

Competitive analysis example

Using the steps above, let’s perform a mock competitive analysis using Sprout’s fictional coffee shop alter ego, Sprout Coffee. Even though this is a fictional business, the process would be the same for selling software, services and other products.

1. Setting analysis goals

Situation analysis: In this scenario, Sprout Coffee is expanding their coffee chain to a new location, and wants to find out how their brand will fare in this locale’s coffee scene. In the last five years, many other coffee shops have opened in the same neighborhood, but the uptick in professionals who work remotely has driven demand for cafes sky-high—which makes this area prime for expansion.

Goal: Gather intel about competitors in the new neighborhood and surrounding areas to fuel a strong expansion plan.

2. Finding competitors

Using Sprout’s conversation overview dashboard, the coffee brand is able to examine the top-performing keywords and hashtags associated with their business online, which is how they hone in on their two biggest threats.

• Competitor #1: CoffeeCabin
• Competitor #2: JavaHut

3. Evaluating product offerings

Now it’s time to evaluate competitor offerings for price, quality and variety, and compare them to Sprout Coffee.

CoffeeCabin:

• Average drink cost: $4.50
• Certifications: Organic, Fair Trade
• Variety: 30 menu options, including coffee staples
  

JavaHut:

• Average drink cost: $2.00
• Certifications: N/A
• Variety: 15 menu options that mostly stick to classic flavors

Sprout Coffee:

• Average drink cost: $3.25
• Certifications: Fair Trade
• Variety: 20 menu options, including brand-specific drinks

4. Assessing shared audiences and market positioning

Using our brand’s existing target audience research, we will evaluate our competitors’ positioning and how well it resonates with our shared audience.

Audience needs and pain points:

• Affordable, high-quality coffee
• Seasonal flavor variety
• Peaceful and aesthetic atmosphere for remote work

CoffeeCabin:

• Exceeds industry quality standards and ethical guidelines
• Offers a wide variety of classic choices, but no specialty drink promotions
• Is the most expensive option
• Refined cafe atmosphere shines through in marketing collateral

JavaHut:

• Meets pricing requirements
• Limited variety can leave audience underwhelmed
• Does not meet quality standards
• Only a pick-up window and outdoor seating available

Sprout Coffee:

• Reasonably priced, but not the most affordable option
• Exceeds ethical guidelines, but does not meet quality standards
• Delivers an exciting rotation of seasonal, holiday and speciality offerings
• Cozy cafe and community events encourage remote workers to feel welcome

5. Diving into digital distribution channels

For Sprout Coffee and their competitors, Instagram is the most prominent distribution channel. To dig into Instagram performance data, we reference Sprout Social’s Instagram competitor dashboard which reveals JavaHut’s handle @JavaHouse is the leading competitor.

CoffeeCabin:

• Followers: 2.2 million
• Average audience size

JavaHut:

• Followers: 17 million
• Upward audience growth

Sprout Coffee:

• Followers: 3,680
• Some periods of impressive audience growth in the past month

6. Pulling together a SWOT analysis

To package their competitive analysis, Sprout Coffee compiles a SWOT analysis for their new location using the data collected in steps 1-5.

Strengths:

• Affordable, mid-market cost
• Wide variety of drink options
• Inviting, community-oriented space

Weaknesses:

• Significantly smaller Instagram following than CoffeeCabin or JavaHut
• No organic certifications

Opportunities: 

• Expand Instagram presence using user-generated content from community events
• Explore seasonal promotions and discounts to compete with lower-cost options

Threats:

• Crowded market, with new competitors continuing to move into space

Now it’s time for Sprout Coffee to take all this information and present it to stakeholders and other teammates, and use it to formulate specific strategies.