How to Perform a Competitor Analysis
A competitor analysis is only useful if it's structured the same way every time — otherwise you end up comparing a paragraph about one competitor to a bullet list about another. Here's a repeatable method.
1. Define "competitor" narrowly first
Start with direct competitors — same product, same customer, same geography. Add indirect competitors (different product, same customer need) only after the direct list is solid; mixing them too early makes comparisons meaningless.
2. Use the same fields for every competitor
A consistent template turns scattered notes into something you can actually compare:
- Product/service: what they actually sell, in one sentence.
- Pricing: published price, or your best estimate if it's not public.
- Positioning: budget, premium, or niche — and who they target.
- Strengths: what they visibly do well.
- Weaknesses: gaps you can see from the outside (reviews, missing features, slow service).
3. Look for the pattern, not just the list
Once you have five or six competitors filled in, look across them: is everyone clustered at one price point? Does everyone have the same weakness? A pattern across competitors is usually more useful than any single competitor's profile — it points at the actual gap or the actual barrier to entry.
4. Rate the competitive risk explicitly
Don't stop at description — decide what the competitive landscape means for your specific plan. Crowded and undifferentiated markets carry different risk than one with a clear, defensible gap. Feed that judgment into your overall decision, not just into a slide nobody revisits.
Public information skews toward competitors who bother to publish it. A competitor with no website and no reviews might still be a real, meaningful player locally — note where your analysis is thin, rather than assuming silence means irrelevance.
FAQ
How many competitors should I analyze?
Enough to see a pattern — often 3 to 8 for a local business, more for a broader market — quality of the profile matters more than hitting a specific count.
What if a competitor doesn't publish pricing?
Note it as unknown rather than guessing a number and treating it as fact; a mystery-shopper call or a quote request can sometimes fill the gap directly.