Competitive analysis: 5 key steps to success

Are you planning to launch a new product or service, or looking to strengthen your market position? Competitive analysis is essential to help you understand your competitors’ strengths and weaknesses, as well as the opportunities and challenges specific to your sector.

Competitive analysis enables you to develop a solid marketing strategy, enabling you to stand out from the crowd and create a sustainable competitive advantage. However, carrying out such an analysis can seem complex. What are the steps involved? What sources of information should be exploited?

This article offers you a 5-step guide to carrying out a complete competitive analysis. You’ll learn how to define your objectives, identify your competitors, collect the necessary data, analyze trends, develop an effective competitive strategy and deploy it. Tips on the tools and methods available to simplify your analysis are also included.

Step 1: Define your objectives and identify your competitors

Before embarking on a competitive analysis, it’s essential to clearly define your objectives. Identify the problems to be solved, the strategic decisions to be made and the performance indicators to be monitored.

Define the scope and objectives of the analysis

The objectives of a competitive analysis differ according to the field and the dynamics of the company. Here are some common objectives:

• Identify market opportunities and challenges;
• Understand competitors’ strategies and successes;
• Identify competitive advantages to be cultivated or improved;
• Establish an appropriate marketing positioning and product range;
• Anticipate competitors’ reactions to your initiatives.

Mapping direct, indirect and potential competitors

Once you’ve defined your objectives, you need to identify your competitors in the marketplace. There are three categories of competitors:

• Direct competitors offer the same product or service, target the same audience and are located in the same area;
• Indirect competitors offer different solutions to the same need, or can replace your offer;
• Potential competitors are not yet present on the market, but could enter in the future. They are distinguished by their size, reputation, capacity for innovation or diversification strategy.

To visualize this, you can use competitive mapping to position offers according to criteria such as price and quality. This will highlight similarities, differences and niches to exploit.

Selecting competitors for analysis

It’s neither necessary nor realistic to examine every competitor on the market. Choose the ones that are most important to your company, based on your objectives and positioning. Here are some selection criteria:

• Market share, sales and profitability ;
• Brand awareness, image and reputation;
• Offer, product range, quality and price;
• Strategy, objectives and initiatives;
• Customer base, target and loyalty rate.

Once you’ve selected the relevant competitors, you can collect data and continue your analysis.

Step 2: Collect competitive data

Multiply your sources of information

To get the information you need on your competitors, you need several sources of information. These fall into two main categories:

• Primary sources: information gathered directly from competitors or their customers, by observing, surveying or evaluating their products or services. These sources are generally more accurate, but can be costly and difficult to access;
• Secondary sources: information from channels other than competitors or their customers, such as market research, press articles, websites, social networks and databases. These sources are easier to access, but their reliability can vary.

It is advisable to cross-reference information from different sources to obtain a complete and objective view of the competition. For more details, see our article on information sources for competitive intelligence.

Collect quantitative and qualitative data

Competitive data can be either quantitative or qualitative, each providing different information:

• Quantitative data: This provides an objective, quantified view of elements such as sales figures, market share or number of customers. They are often collected through surveys and analyzed using statistics;
• Qualitative data: These provide a more subjective understanding of strategies, objectives, opinions and needs. They are generally obtained through observations or interviews and analyzed using the content analysis technique.

The combination of quantitative and qualitative data provides a complete picture of the competition.

Create a competitive database

Once the data has been collected, it needs to be stored in a competitive database. This will enable you to centralize, classify, update and easily consult information on your competitors. This database can take the form of a table, software or online platform. To set up this database, you can follow the steps below:

1. Define classification criteria (competitor name, type of information, collection date, source);
2. Opt for an appropriate format and medium (Excel file, CRM software, online platform);
3. Enter information in accordance with criteria and verify data accuracy;
4. Regularly update the database, adding, modifying or deleting information as necessary;
5. Use the database for research, analysis and reporting, according to your needs.

A quality competitive database will save you time and accuracy in your competitive intelligence process, enabling you to move on to data analysis and trend identification.

Step 3: Analyze data and identify trends

Once you’ve collected your competitive data, you need to analyze and interpret it to derive information useful to your strategy. This step enables you to identify your competitors’ strengths and weaknesses, as well as market trends and opportunities.

Use analysis methods and tools

The analysis of competitive data can be facilitated by the use of specific tools, enabling you to synthesize and visualize key information. Here are a few frequently used tools:

• SWOT analysis: This tool identifies the strengths, weaknesses, opportunities and threats associated with your company and your competitors. It is useful for highlighting competitive advantages and areas for improvement;
• BCG matrix: This tool classifies products or market segments according to their relative market share and growth rate. It can be used to assess the potential and profitability of each element;
• Porter’s Five Forces: This tool analyzes a sector’s competitiveness in terms of five key factors. It is invaluable for estimating a market’s attractiveness and profitability.

Assess competitors’ strengths and weaknesses

These analysis tools enable you to determine your competitors’ strengths and weaknesses, and deepen your understanding of the competitive landscape. Use the following criteria for a comprehensive assessment:

• Offer: Examine the quality, price, added value and innovation of their products or services;
• Positioning: Identify the differentiating factors, added value and innovation of their products or services:
• Strategy: Evaluate objectives, means of action, communication, distribution and loyalty policies;
• Performance: Analyze financial and commercial results, such as sales, market share and profitability.

This analysis will reveal your strengths and weaknesses, as well as the opportunities and risks to which your company may be exposed.

Identify market trends and opportunities

Beyond competitors, it’s essential to understand your market. Identify long-term trends affecting demand, supply, regulation and the environment. Also identify unmet needs, untapped niches, opportunities for innovation or potential partnerships for growth.

To uncover market trends and opportunities, leverage market research, industry reports, press articles, social media, influencers, customer feedback and rating tools for data analysis and surveys.

By identifying market trends and opportunities, you can anticipate changes, adapt your offers, innovate and stay ahead of the competition.

Step 4: Develop a competitive strategy

Once you’ve examined the data and identified the trends, it’s essential to develop a competitive strategy. This action plan is designed to differentiate you and give you a competitive edge. It involves effectively positioning your company in the market, establishing precise strategic actions and providing for regular monitoring and adjustment.

Positioning your company in the market

Positioning determines how your company distinguishes itself in the market through its offering, target clientele, image and value proposition. Successful positioning must be clear, consistent, credible and attractive to potential customers. To position your company properly, ask yourself the following questions:

• What is the nature of your product or service? What are its strengths and limitations?
• Who are you targeting? What are their needs, desires, motivations and reservations?
• Who are your competitors, and what do they offer? How are they positioned, and what are their strengths and weaknesses?
• What differentiates you from the others? What’s your competitive edge, and what’s in it for the customer?

By answering these questions, you’ll be able to define your positioning and integrate it into your communication strategies.

Define targeted strategic actions

Strategic actions are the means used to achieve your objectives and position your company. They cover different aspects of your business, such as product, price, distribution and communication. These actions must be targeted, i.e. adapted to your market segment, your competitive advantage and your budget. You can base your strategic actions on the 4Ps of the marketing mix:

• Product: Design and optimize your product or service according to customer needs and competitor characteristics;
• Price: Set the price of your offer, taking into account your costs, margins, positioning, demand and competition;
• Place: Select the distribution channels best suited to your target, your offer, your image and your budget;
• Promotion: Communicate your offer, taking into account your message, your positioning, your target and your competitors. Choose the most appropriate communication channels.

By precisely defining your strategic actions, you’ll be ready to execute your action plan in the field.

Monitoring and iteration

An effective competitive strategy requires constant monitoring and adjustment to adapt to changes in the market, competition and customer needs. It is therefore essential to set up a monitoring, analysis and readjustment system to assess the performance of your strategy and make any necessary changes.

For effective monitoring, you can proceed as follows:

1. Determine key performance indicators such as sales, market share and customer satisfaction;
2. Collect and analyze data using scoring tools such as dashboards, surveys and statistics;
3. Compare results with objectives, identify discrepancies and their causes;
4. Make any necessary adjustments, modifying or intensifying your strategic actions in line with identified opportunities and threats.

By implementing a strategy of continuous monitoring and adjustment, you’ll optimize your competitive position and stay one step ahead of the competition.

Step 5: Implementation, monitoring and iteration

Once you’ve developed your competitive strategy, you need to put it into practice, monitor it closely and adapt it in line with results and market fluctuations. This involves sharing the strategy with your team, monitoring competitor reactions and market trends, and making any necessary changes to your strategy.

Communicating strategy to the team

Effective communication is essential to the successful implementation of your strategy. It’s important to involve your team in the realization of strategic objectives and initiatives, providing them with the resources, tools and support they need to succeed.

To convey the strategy to your team, consider the following options:

• Organize meetings or workshops to present the strategy, discuss motivations and expected benefits, and listen to the team’s reactions and suggestions;
• Design visual aids, such as diagrams, charts or dashboards, to clarify strategy, objectives, key indicators and deadlines;
• Adopt collaborative tools for project management, communication and document sharing, to improve teamwork, task tracking and coordination of efforts.

Monitor competitor reactions and market trends

Implementing your strategy is a dynamic process. Remain vigilant to your competitors’ reactions to your actions, and to market trends likely to have an impact on your strategy. It is therefore essential to maintain a competitive and market watch to identify opportunities and threats.

To monitor competitor reactions and market trends, the following sources of information can be useful:

• Explore competitors’ websites, social networks, blogs, newsletters and podcasts to follow their news, offers, promotions and innovations;
• Analyze market studies, industry reports, press articles, forums and customer feedback to understand the needs, expectations and preferences of your target audience.
• Use analytical tools such as SEO, web analytics or social media tracking to monitor traffic, keywords, mentions and sentiment associated with your brand and competitors.

Adjust strategy according to results and market trends

Implementing your strategy is a cycle of continuous improvement, not a straight line. It’s important to evaluate the results of your actions, compare them with the performance of your competitors, and adjust your strategy according to deviations, unforeseen events and the results obtained. To do this, set up a system for constantly evaluating and optimizing your strategy.

To readjust your strategy according to results and market trends, follow these steps:

• Measure the results of your actions using predefined performance indicators;
• Analyze these results to identify any discrepancies between targets set and results achieved, understanding the reasons for these discrepancies and their implications;
• Make informed decisions on which actions to maintain, modify, abandon or launch, taking into account results and market variations.

By adjusting your strategy in line with results and market trends, you’ll optimize your competitive positioning and achieve your objectives more effectively.

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