#8 How to Conduct a Competitor Analysis

How to Conduct a Competitor Analysis
A competitive analysis helps you uncover the insights you need to create your own marketing strategies. Here's how to get started.
by Square Nov 10, 2023 — 6 min read
How to Conduct a Competitor Analysis

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A competitor analysis — also called a competitive analysis — identifies your industry competitors and evaluates their strategies to determine areas of opportunity for your business. The information you uncover can give you the insights you need to create your own marketing strategies, based on your points of distinction from your competition.
But before you dive into your research, you need to clearly define your goals. When you’re doing a competitive analysis, you should aim to:


How to do a competitor analysis

There are a number of things that you can examine in a competitor analysis. You may just want to look at your competitors’ marketing. Maybe you want to look at product offering or pricing strategy. But whether you’re looking at a specific piece of your competitors’ business or the industry as a whole, you may want to go through these four steps.

Identify your competitors

You can’t analyze your competitors if you don’t know who they are. They key to identifying possible competitors is to really put yourself in the shoes of your target customer.

First, start with a simple online search for your business type and location. For example, if you’re starting a retail business in Los Angeles, you’ll want to think about how a customer might search for your business (or one like yours). They might search for “los angeles retail store,” “clothing store in LA,” and “LA apparel store.” Create a list of businesses that appear in the search results (and take note of those that frequent the top three results).

If you’re opening up a brick-and-mortar shop, you may also want to walk around your desired area to identify competitors. Get a firsthand look at the competition in your neighborhood.

And if your target customer is a Los Angelino on the lookout for clothes, they may want to go to a local store, but they will also look at major brands and online retailers. So it’s important to include those in your list as well.

One way to get a good idea of how your target market might view your industry is to just ask them. Using focus groups, questionnaires, and surveys can help you can gather information on popular businesses with products similar to your own. You’ll also get first-hand information of how customers feel about the products that are already on the market.

Combine all of the information you collected during this process and create a list of your top 5 to 10 competitors (depending on the size of your industry and overall landscape).

Analyze your competitors.

Next up, it’s time to analyze your competition by doing some competitor research. If you want to do a complete competitive analysis, you’ll need to do a deep dive into the background, location, products or services, marketing, sales, and personnel for each competitor you identified. (You can also break out one of these areas and do a real deep dive into it.)

Business background

Look at the history of their business, with a focus on important dates and events. Include research on the ownership, financials, and organizational structure of those businesses.

Facilities and location

Consider the location of your competitor’s offices or store and its online presence. Location is a key part of your competitor’s strengths and weaknesses as it affects foot traffic, logistics and accessibility.

If you have a brick-and-mortar business, your location is vital to your success. Look at where your competitors are based — perhaps you’re opening a brewery and you want to be in the new “brewery quarter” or you’re hoping to open a coffee shop in a cool hipster area.

Companies that are making and selling products should consider how location logistics such as shipping and zoning might affect manufacturing and distribution. Researching your rival’s business operations gives you an overview of what facilities you need in addition to any weaknesses that you want to avoid in your own business plan.


Product-based businesses should look at competitors to see the types of products offered, the depth and breadth of product lines, and whether they are missing any key products. Be sure to look at pricing strategy as well (and pay close attention to any differences between online and in-person pricing).

You can search for the product line on the website of most businesses, or you may have to physically visit the store or cafe to see what they’re offering. Check out if they’re currently developing any new products, and if they have any patents and licenses pending.


You’ll need to define your target market, then determine how much of that market your competitor is reaching. Next, ask yourself how your competitor is reaching it, or in other words, what is the marketing strategy?

Checking your competitor’s social media and online presence is a great place to start. What are people saying about the company? Have they had any PR fails that made their audience unhappy?

Take a look at their marketing tactics — are they spending money on advertising, or relying more on special offers and social media to get the word out?

If you own a retail business, then you can go into your competitors’ stores to see what promotions they’re running. For other types of businesses, however, you may need to make discreet enquiries about special offers or pricing plans.

While it’s easy to look at the tactics your competitors are using to market their business, you should also take notes on their brands. How would you describe each of your competitors’ brands? What is the tone they take in their marketing and how do they address customers? How do they talk about their products?


Understanding your competitor’s sales strategy can help you make strategic decisions about where you sell and how you do it. However, this step can be tricky since most of this information isn’t publicly displayed.
Here are some questions you should aim to answer:


Once your business is up and running, you and your employees should continue to learn about your competitor’s strategy by talking with customers.Try to get honest feedback about competitor products and use this to fine-tune product messaging.


Staffing is an important consideration and your analysis should help you figure out how many employees you might need to be competitive, as well as the types of compensation, benefits, and employee retention rates that are normal for your industry.

Resources such as Glassdoor can give you some of this information, as well as details about required skill sets and and the management style that your competitors are using.

Segment your competition.

Once you’ve conducted extensive research on each of your listed competitors, you’ll want to categorize them into primary, secondary, and tertiary groups.


The secondary and tertiary groups are both your indirect competition.Their products may not be the same as yours, but could satisfy the same need or solve the same problem. You should primarily focus on your direct competitors, but you should watch your indirect competitors. These businesses may move into another group as your business, or theirs, grows and expand product offerings.

Determine business opportunities.

Once you’ve gathered all the necessary information, it’s useful to use a competitive analysis template to organize your insights and perform a Strengths, Weaknesses, Opportunities, and Threats (SWOT) analysis. A competitive analysis tool will help save you time by jumping straight to understanding the lessons your business can learn from the data you’ve already collected.   

Whether you’re using a competitor analysis tool or doing the analysis on your own, you’ll want to look at everything you have gathered and try to answer questions like these:

A competitor analysis is useful, regardless of your business’s maturity. New business owners can use this information to familiarize themselves with the competition and set themselves up for success. Industry veterans can conduct a competitive analysis to determine new opportunities and re-evaluate current business priorities and operations.

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