Competitive Analysis Definition

Competitive analysis is a method of analyzing a company’s competitors to discover their strengths and weaknesses in a variety of categories. Data from publicly available resources is compiled so that relevant information can be extracted and analyzed. These resources might be annual reports, public-facing marketing campaigns, or consumer resources, such as a website.

Competitive analysis is an important marketing tactic that can give businesses actionable data, for example on marketing strategies that have worked (or failed) for their competitors. Finally, it’s also worth noting that the data gathered from competitive analysis is valuable for benchmarking purposes.

Competitive Analysis Example

Imagine that a company wants to increase the amount of customer engagement, leads, and sales gathered from their website. The business knows that they’re behind their competitors in online marketing—perhaps their competitors have better websites with more relevant and engaging content. The company decides to perform a competitive analysis of their competitor’s websites.

During the analysis, they might discover that the competitor not only has content that seems to better answer visitor questions, they also have superior search engine optimization (SEO) in the form of relevant backlinks. The company now knows that they need to improve their content, perhaps with actionable data on how to do so, as well as to gather more backlinks from reputable sources.

Why is Competitive Analysis Important in Strategic Marketing?

Strategy

Competitive analysis can give businesses a better idea of the overall competitive landscape they needed to operate within; identification of competitor strengths and weaknesses will show the business areas where they need to improve and areas where they can differentiate themselves from competitors as a superior consumer choice.

Continuous Improvement

When applied to marketing efforts, competitive analysis can give businesses an idea of what strategies worked or failed for competitors, potentially saving time and money by learning from their competitor’s successes or mistakes.