Before Getting Started, Get Answers
A competitor analysis is a useful tool that can help companies better understand the market landscape they play in and identify potential opportunities for their brands. There are many websites that provide competitor analysis templates and frameworks to use. Below are just a few places that can provide you with a starting point:
However, before getting started with any template, there are a three key questions you should ask:
- What is the goal of the competitor analysis?
- How many key competitors will be analyzed and which ones?
- What are the key metrics and information sources?
The reason to ask these key questions is because you do not want to go down a rabbit hole of analyzing for the sake of analyzing. You want to be purposeful in your research and thus, clearly outlining what is the objective and how you will go about conducting the competitive analysis which will provide you with a structured roadmap to execute.
Competitor Analysis Template Question 1: What are the Key Goals?
A competitor analysis can be broad or narrow in scope. If this is the first time the organization is conducting a competitive analysis and has limited information on the marketplace, then you might benefit from staying high-level and answering foundational questions such as:
- Who are the major players in the category?
- What price point do they play in?
- What is their revenue?
- Who is their target consumer and how are they positioned in the marketplace?
Alternatively, there might be a reason why you want to go deep and really understand a specific aspect of the business. For example, if you are trying to tease out potential new product opportunities or gaps in the marketplace, there might be value to understanding specific product offering or website features.
Being clear with the objective and key questions you are trying to answer up-front will help keep you focused on what information really matters and what time and resources are required.
Competitor Analysis Template Question 2: How Many Key Competitors to Analyze?
Depending on how you define the marketplace, you can have an endless list of competitors for any given category. The goal should be to identify no more than five key competitors to analyze. Of course, you can have more than five, but often, it becomes information overload. If needed, you can group competitors into categories to then tease out themes. For example, you can have:
Direct Close-In Competitors: targets the same consumer and offers very similar product
Indirect Competitors: targets a different audience and with slightly different substitute product
It’s absolutely true there are learnings to be garnered from different types of competitors. But, again, determining which competitors to include or exclude from your competitor analysis template comes back to your objectives for the competitive analysis and which key questions you are trying to answer.
Competitor Analysis Template Question 3: What Are the Key Metrics and Information Sources?
While defining the key metrics might require some research first, clearly mapping this out and getting organizational buy-in, if possible, is important. Depending on your objective, you might keep the information high-level using secondary research sources. Typically, you can find estimated revenue, website performance, etc. through third-party sources.
However, if there is limited publicly-available information, then primary research might be required, and you will want to account for consumer interviews or quantitative surveys in your research plan.
Before embarking with a competitor analysis template, these three questions are critical to ensuring success and staying focused.
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