4 Top Questions about Competitor Analysis Answered
If you’re reading this, you’re likely looking for the answers to one of four related questions: what is a competitor analysis template, what are examples of one, why would you want one, and where can you get help creating or updating one for your business?
What is a Competitor Analysis Template?
Simply put, a competitor analysis template is a way of evaluating the merits of some organizations, typically of various businesses with similar products in a given market niche.
This kind of process is often abstractly referred to as a “competitor analysis template” because, “analysis” describes the process of methodically evaluating something piece-by-piece in order to better understand it. Therefore, when someone “analyzes” competitors, it means they are determining what parts constitute given competitors, or seem to be important.
The term “template” is intended as an analogy that refers to the way molds or patterns are used to reliably shape malleable or liquid raw materials into particular shapes. Therefore, a “template” for competitor analysis implies there is also some sort of pattern (among many possible ones) that strictly and consistently shapes how we are analyzing competitors.
For example, some common template elements for analyzing competitors might include:
- pricing and cost structure
- product line
- management teams
- R&D investment
What’s an Example of a Competitor Analysis Template?
While there are arguably some best practices for any competitor analysis template, ultimately, knowing which kind is most relevant for you depends on your priorities.
Why Would You Want a Competitor Analysis Template?
Should businesses’ invest time and money to evaluate the merits of certain competitors?
Some might argue not; that competitor analyses are unnecessary, perhaps even unhelpful, insofar as they can potentially distract focus from innovating new products or possibly become expensive and endless timesinks (you can always analyze things into more irrelevant pieces!)
To be sure, those are reasonable concerns any wise business owner would weigh, but they can be mitigated, and it is arguably more risky to skeptically avoid supporting competitor analyses.
Ultimately, unless you are comfortable risking reinventing the wheel, and wasting money prototyping ideas into things in ways your competitors did long ago, you need some reliable way to efficiently assess what ideas & practices you can borrow from competitors.
In truth, any business already relies on some kind of competitor analysis templates. The real question is not whether it’s worth trying to do such analysis (it always is!) but if a given business’ competitor analysis templates are as nuanced and updated as its leaders feel it needs to be.
Generally, it’s less important for a leader to have a precise and accurate competitor analysis template, if they are unwilling or unable to prioritize the long term health of their business. Conversely, the more one ambitiously desires to improve their business in the long run, the more important it will be to create and regularly revise their competitor analysis templates.
In short, it’s typically wise for leaders of businesses to analyze their competitors. If you want to take advantage of a competitors’ best ideas and practices, then you must analyze them. Thus, anyone serious about efficiently running a business wants a competitor analysis template.
Where Can I Get Help Creating or Updating a Competitor Analysis Template?
Sometimes, it can be prudent to develop your own competitor analysis template in-house. But, this can be a great challenge for some of the various reasons we considered earlier.
Expert consultants outside of your business can be uniquely well positioned to avoid these issues. There are many consulting firms which can help develop competitor analysis templates and this is one of many services we offer at Insight to Action.