Carrying out a good competitor analysis may seem like a complex task, but the reality is that, with the right tools, it can be simpler and help you a lot in building your business strategy!
This is because understanding how the market is behaving, and how competitors are moving within it, allows for better definition and direction of strategies.
Not looking at this is a risk I don’t want you to take! So I’m going to show you here how you should study your competitors. Come with me!
What is competition?
First of all, I need to tell you: competition is not exactly rivalry. It encompasses the interaction between companies that seek to meet the needs of the same group of consumers.
And identifying it is the first step to positioning yourself strategically in the market!
Competition can be direct, when companies compete for the same customers and offer the same products or services, or indirect, when they compete for the same audience but offer different products or services.
Perfect competition
Perfect competition is a theoretical model that describes a market where sellers (supply) and buyers (demand) act in an ideal manner.
In this scenario, no participant has the power to influence the market price.
Sellers offer homogeneous products, making it impossible to distinguish one product from another. Furthermore, there is free entry and exit of companies in this context.
In other words: both sellers and buyers are considered “price takers”.
Buyers, in turn, have complete freedom to choose between different suppliers, and supply and demand naturally balance each other, determining the price to be charged.
Thus, each participant acts independently, without significantly impacting the market environment.
To make it easier to understand, imagine agricultural markets, where products such as grains are commodities.
Farmers, as sellers, offer products that are virtually identical, and buyers (food companies, for example) have the flexibility to choose between different suppliers, without any of them having significant influence over the final price.
Imperfect competition
Unlike perfect competition, imperfect competition is characterized by the presence of companies that have the power to influence certain market participants.
Here, sellers and buyers do not act ideally, and the market does not operate completely freely .
Within this model, there are several types, each with its own characteristics:
- Monopoly: there is only one dominant supplier that controls the supply of a given product or service with great influence over price and market conditions;
- Monopsony: there is a single buyer or group of buyers who dominate demand, giving them the power to influence prices;
- Oligopoly: characterized by the presence of a small number of large companies that dominate the market and have considerable influence over its prices and conditions;
- Oligopsony: occurs when there are few influential buyers in the market who exert control over trading conditions;
- Bilateral monopoly: There is a single supplier and a single buyer, and both exert significant influence over trading conditions.
Competitor analysis
Analyzing the competition allows you to obtain good insights to make better decisions, so carrying out this analysis actively contributes to the design of your business strategies.
The idea is to understand not only direct competitors, but also indirect ones, and achieve a more comprehensive view of the market environment.
Discovering how other companies operate, identifying their strengths and weaknesses , as well as anticipating their movements, is what allows your company to develop more proactive and assertive strategies!
Therefore, it is interesting that competition analysis be an ongoing practice and integrated into the routine of some sector — or several sectors — of the company.
Remember: the market scenario is continually changing and requires organizations to remain vigilant and flexible, ready to adjust their next actions!
How to analyze your competition?
Before devising strategies to overcome the competition, it is important to understand how to analyze it correctly.
Data collection is the foundation of this analysis, as it provides the insights needed for all subsequent steps.
Come with me and I’ll teach you how to do it:
1. Understand the market share
Share refers to the portion of the market that a company holds in relation to the total available.
This is an important element for competitor analysis, as it provides good insight into the company’s relative position in the market.
Some points to be addressed:
- Strategic positioning: understanding how market share reflects the company’s positioning in relation to its competitors;
- Identifying opportunities: how market share analysis can reveal expansion opportunities or unexplored niches;
- Comparison with competitors: compare the company’s position with that of direct competitors to assess competitiveness.
2. Identify your direct and indirect competitors
To actually begin the journey of analyzing your competitors, you need to identify your direct and indirect competitors.
To do this, carry out detailed research, evaluating not only the products or services offered, but also the marketing strategies and pricing.
Some aspects to be explored:
- Marketing Research: understanding which marketing resources and channels are used by competitors can suggest new ideas for your company;
- Competitive pricing: it is important to understand the competition’s pricing strategy to position products or services competitively;
- Benchmarking: this research between companies in the same sector allows you to compare the performance of your company’s products with those of your competitors.
3. Set goals
Competitor analysis should not be an isolated activity, but rather part of a company’s overall Marketing strategy.
In this context, you should establish specific objectives that guide your competitor research.
Different stages of Marketing can have different objectives, such as:
Identifying gaps in the market: understanding where the competition is absent or underserved opens up opportunities for your company to act;
Improving pricing strategy: analyzing how competitors price their products and adjusting strategy to remain competitive;
Marketing message improvement: analyze competitors’ messages and campaigns to optimize your own communication strategy;
Market expansion: identify geographic areas or market segments where competitors are weaker and exploit these opportunities.
4. Define research methods
Using the SWOT research methodology allows for a more robust and complete analysis, both for the company itself and for its competitors.
It’s what we usually say about “looking inside and outside the door”!
SWOT analysis involves identifying strengths, weaknesses, opportunities and threats, providing a complete view of the market scenario and what your company offers .
Just look:
- Strengths: involves evaluating the company’s internal strengths that differentiate it positively, such as unique competencies, product quality or cost advantages;
- Weaknesses: Identify areas that need improvement, such as operational failures, resource deficiencies, or supply chain weaknesses;
- Opportunities: analyze external factors that can be explored, such as changes in the market, gaps in the competition’s offering or new consumer trends ;
- Threats: Identify external factors that may pose challenges, such as the entry of new competitors, adverse regulatory changes, or unfavorable market trends.
Is it complex? Some tools can help with this analysis, such as:
- Online and interactive tools: use online platforms that allow you to interact with data and information, which can lead to a more dynamic and collaborative SWOT analysis;
- Competitive analysis tools: specialized platforms that offer advanced features to compare metrics , monitor competitors’ actions and identify opportunities.
5. Explore the tools
You thought I was just going to mention types of tools and not say which ones, didn’t you? I wouldn’t do that! In the digital universe, countless online tools are available to help you analyze your competitors’ digital presence.
These tools offer insights that go beyond traditional metrics, are often very intuitive and provide a more visual understanding of the online strategies adopted by competitors.
Some of the most relevant include:
- Semrush: It is ideal for keyword analysis, organic traffic, and online advertising strategies. It also helps you identify your competitors’ top SEM strategies;
- Ahrefs: Focused on SEO, provides detailed information about competitors’ backlinks, keywords, and search rankings;
- Google Analytics: allows you to monitor your website’s performance (to assess its Strengths and Weaknesses, when performing a SWOT analysis), and check metrics such as traffic, visitor sources and user behavior;
- SimilarWeb: Provides a complete view of online traffic, revealing data about visitors, traffic sources, and website performance.
6. Collect customer feedback
I would like to emphasize here the importance of collecting direct feedback from customers for a complete analysis of the competition.
Customers are a very important source of information about your own perception of the market in relation to the products and services offered by your company and your competitors!
Some strategies for collecting include:
- Satisfaction Surveys: conduct regular surveys to assess customer satisfaction with products, services and overall experience with the company;
- Online reviews: monitor online review platforms such as Google Reviews, Yelp, Reclame Aqui or industry-specific sites to understand customer opinions about competitors;
- Direct communication channels: establishing direct interaction channels, such as feedback request emails or specific telephone lines, are ways to encourage customers to share their experiences.
7. Stay updated
This is a necessity in many sectors today! Staying up to date with the main trends is what allows you to act proactively in the face of new developments that emerge all the time.
Success in Marketing is not the result of one-off actions, but rather of a continuous commitment to staying up-to-date and creating differentiation strategies. And this is especially true when it comes to outperforming the competition!
I have some considerations on this point:
- Avoid complacency: It is not enough to simply implement good strategies, it is necessary to constantly monitor the business environment to identify changes and adjust approaches as necessary;
- Follow market trends: be aware of trends, new technologies, changes in consumer behavior and product innovations that can significantly impact competitive dynamics;
- Adapt to change: Market conditions change and being willing to adapt strategies, products and services quickly can ensure that your company is aligned with new demands;
- Analyze the competition regularly: carry out periodic analyses to be aware of the strategies adopted by competitors and identify opportunities for differentiation;
- Invest in professional development: staying up to date involves continuous team learning. Invest in training and professional development to align your team with market challenges.
Competitor analysis to stand out!
By investing time and resources in this process, organizations obtain significant advantages, which directly impact their strategies and results.
Here are some advantages of analyzing the competition:
- Strategic basis: understanding competitors’ practices, strengths and weaknesses allows managers to make better decisions, defining strategies with a greater chance of success;
- Better targeting of funds: by understanding where competitors are investing and the results obtained, companies can optimize the use of their budgets to achieve better results;
- Identification of opportunities and threats: this proactive vision allows rapid adjustments in strategies to adapt to changes in the competitive environment;
- Continuous improvement: understanding what the competition is doing well or badly allows the company to learn from the mistakes and successes of others, adjusting its own approaches to remain relevant and competitive.
How to use Inbound Marketing to stand out from the competition?
Inbound Marketing is a customer-centric approach that aims to attract, convert and delight consumers in a natural way.
To stand out from the competition, companies can adopt this Marketing strategy and build good relationships with their target audience.
To do this, consider:
- Produce relevant content: by providing educational and interesting information , companies can attract the attention of potential customers, building trust and authority in the market;
- Personalize the Customer Experience: with data collection and analysis, this personalization is possible, improves customer satisfaction and highlights the brand, as consumers feel understood and met in their specific needs;
- Engage on social media: by interacting authentically and meaningfully with their target audience, companies can create an online community, differentiating themselves from the competition and strengthening relationships with customers;
- Nurture leads and promote sustainable conversion: by guiding potential customers through the sales funnel, gradually and with relevant offers for each stage, the result is more significant conversions, since customers buy from companies that demonstrate care and concern for their needs.
Don’t let the competition scare you!
Throughout this content, you have seen how a good competitor analysis allows you to improve your company’s strategies. Using the right tools can further expand this assessment and go beyond traditional metrics!
Furthermore, listening directly to customers contributes to a more complete analysis. Satisfaction surveys, online reviews and direct communication channels complement the findings.
But to do this, you need to stay up to date, follow market trends and adapt whenever possible!
Don’t know where to start? Enjoy Minder has the right solution to help you! Request a free Digital Marketing Strategy Session with our experts!
