Understanding Competitor Analysis and How to Conduct It

It is essential to understand market conditions and your competitors when building a business, knowledge that is necessary for your business to compete and survive effectively, and, as such, it is important to understand what competitor analysis is and how to successfully conduct it.

What Is Competitor Analysis?

Competitor analysis is an evaluation method that assesses a business's competitors in the marketplace.

This type of analysis helps you understand how your competitors compare to your own business, and gathering various types of information about these competitors helps you improve your business quality in the future. The main objectives of competitor analysis include: 

• Identifying the strongest competitors;
• Determining competitor strategies;
• Anticipating future actions of competitors;
• Predicting their reactions based on your business actions; and 
• Influencing their actions in a way that benefits your company.

Many businesses conduct competitor analysis based on assumptions, impressions, and intuition, which can lead to blind spots, resulting in insufficient information for effective business strategy development.

To avoid this, you must ensure that your company conducts a thorough analysis at various stages of the business.

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‍How to Conduct Competitor Analysis

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1. Ensure to Identify Competitors First 

Firstly, identify who your main competitors are in the same marketplace.

Take this information and compare their marketing strategies in the market. Moreover, you can identify competitors by asking questions such as: 

Who is their target market? What problems do they face? And, how do they solve them?

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2. Define the Purpose of Conducting Competitor Analysis

Secondly, you need to understand the purpose of conducting competitor analysis, because the objectives of competitor analysis generally include:

• Developing marketing strategies; 
• Improving product quality based on comparisons with competitors; and 
• Preparing business steps before entering the market.

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3. Determine the Competitor Platforms to Analyze

Thirdly, decide which platforms you want to analyze for more optimal results because today, there are many places to sell products, ranging from social media such as Facebook (Meta), Instagram, and TikTok to physical marketplaces and stores.

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4. Study Competitor Content Strategies

Fourthly, study the content strategies employed by your competitors, and research the types of content they use across various business platforms - whether on blogs, social media posts, or elsewhere.

This will help you evaluate and enhance your content to drive higher sales growth.

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5. Conduct Research on Competitor Engagement

Fifthly, research competitor engagement, because the goal of your business is to clearly understand the number of users interacting with their content, which can be measured by likes, comments, and shares.

High engagement numbers indicate that traffic to the company's page is also significant, positively affecting brand awareness and online sales. 

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6. Analyze Competitor SEO Structure

Sixthly, analyze the search engine optimization (SEO) structure of your competitors.

If your content quality is similar to theirs but still ranks lower, it might be due to an ineffective SEO strategy, therefore, you need to pay attention to the SEO structure of competitors. 

Key SEO elements include article titles, website URLs, H1 tags, keyword placement within the content, internal links, and alt text for images.

Additionally, observe the keywords competitors are using, because higher search volume increases the chances of your business content appearing on the first page of search engines like Google.

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7. Try Using Analytical Tools

Finally, start using analytical tools to maximize product sales, as you only need to use one type of tool that suits your business needs.

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Why Is Competitor Analysis Important?

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1. Can Help Build Marketing Strategies

Firstly, competitor analysis is important because it can help build more effective marketing strategies. Using a solid marketing strategy can increase profits and help you achieve financial or performance goals.

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2. Can Help Identify Products or Services Desired by Customers

Secondly, it can help identify any products or services desired by customers, and in this way, you can more easily find solutions to meet customer needs.

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3. Can Help Make Informed Business Decisions

Thirdly, it can help make informed business decisions because conducting competitor analysis can lead to more strategic decisions and investments that benefit the business.

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4. Helps Identify Competitor Weaknesses

Lastly, it can help you identify competitor weaknesses, enabling you to use this information to your advantage. 

For example, if they lack the resources or capabilities to implement a certain strategy, it could be an opportunity for you to meet the needs of your market.

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That’s the definition of competitor analysis and how to conduct it. 

Furthermore, you must start adapting to technology in managing your business which offers a variety of advanced features such as financial reporting, sales analysis, transaction recording, and more.