How to Write a Competitor Analysis for a Business Plan (That Actually Works)

how to write a competitor analysis for a business plan

Understanding your competition is crucial for building a successful company. That’s where a competitor analysis comes in. 

his comprehensive guide shows you how to write a competitor analysis for a business plan that reveals hidden opportunities and sets you up for success. 

We’ll walk you through the process step-by-step, from identifying your top competitors to analyzing their every move.

Key Takeaways

  • Identify all types of competitors: Don’t just focus on the obvious rivals. Consider indirect competitors and those who might emerge in the future.
  • Gather in-depth intel: Go beyond surface-level observations. Dig deep into their products, pricing, marketing, and financials.
  • Conduct a SWOT analysis: Identify their strengths, weaknesses, opportunities, and threats to uncover potential advantages for your business.
  • Present your findings effectively: Use visuals and a compelling narrative to communicate your analysis clearly.

Table of Contents

how to write a competitor analysis for a business plan

What is a Competitor Analysis?

To effectively analyze your competitors, it’s crucial to identify who they are and what they offer. This first step will provide a foundation for your analysis.

Why is Competitor Analysis Important?

Understanding your competitors is essential for building a successful business. A competitor analysis provides a comprehensive overview of your rivals, helping you identify their strengths and weaknesses, and develop a winning strategy.

Key benefits of conducting a competitor analysis:

  • Informed decision-making: A thorough analysis helps you make data-driven decisions about pricing, marketing, and product development.
  • Improved market positioning: By understanding your competitors’ positioning, you can differentiate your own offerings and appeal to a specific target audience.
  • Enhanced innovation: Analyzing competitors can inspire new ideas and innovations, helping you stay ahead of the curve.
  • Increased efficiency: A competitor analysis can help you identify areas where you can streamline your operations and reduce costs.
  • Reduced risk: By understanding the competitive landscape, you can mitigate risks and identify potential threats.

It’s important to note that neglecting competitor analysis can have serious consequences, such as:

  • Missed opportunities: You may miss out on valuable insights about new trends or customer needs.
  • Wasted resources: You may invest in products or services that already exist in the market.
  • Loss of market share: You may be outcompeted by rivals who have a better understanding of the market.

Types of Competitors: Who Are You Really Up Against?

In addition to direct competitors offering similar products or services, it’s important to consider indirect competitors who solve the same problem for the same target market but with a different approach. 

For example, while Uber and Lyft are direct competitors in the ride-sharing industry, public transportation is an indirect competitor.

Understanding the full range of competitors will help you develop a more comprehensive business strategy.

By understanding the different types of competitors and their strengths and weaknesses, you can develop a competitive advantage and position your business for success.

II. How to Do a Competitor Analysis: A Step-by-Step Guide

Here’s a practical, step-by-step approach to conducting a competitor analysis that delivers real insights.

Identify Your Top Competitors: Know Your Enemy

Before you can analyze your competition, you need to know who they are! This might seem obvious, but it’s important to be thorough and consider all types of competitors. Here are a few ways to identify your key rivals:

  • Online Searches: Start with a simple Google search. Use relevant keywords and see who appears at the top of the search results. Don’t just look at the first page – explore further to uncover hidden competitors.
  • Industry Reports: Industry-specific reports and publications often include market share data and competitor profiles. These can be valuable resources for understanding the competitive landscape.
  • Customer Feedback: Talk to your customers! Ask them who else they considered or are currently using. Their insights can be invaluable.
  • Tools for Market Share Research: Utilize tools like SEMrush or SimilarWeb to analyze website traffic and identify key players in your market.
  • Identifying Small Business Markets: If you’re a small business, focus on identifying other small businesses in your local area or niche.

Gather Intel: Dive Deep into Their Business

Once you’ve identified your top competitors, it’s time to gather intel. This is where you put on your detective hat and dig deep into their business. Here’s what you should be looking for:

  • Products and Services: What exactly are they offering? How does it compare to your own offerings? Are there any gaps in the market you could fill?
  • Pricing: How much do they charge? Are they a budget-friendly option or a premium provider? How does their pricing strategy impact their market share?
  • Marketing and Sales: How do they reach their customers? What marketing channels do they use? What are their sales tactics?
  • Financials: If possible, try to gather information on their revenue, profitability, and funding. This can give you insights into their overall business health and potential for growth.
  • Sources of Information: Explore their website, marketing materials, social media presence, and customer reviews. You can also find valuable information in free market research reports and industry publications.

Important Note: Always gather information ethically and avoid plagiarism. Cite your sources properly and never misrepresent yourself or your intentions.

SWOT Analysis: Their Strengths, Weaknesses, Opportunities, and Threats

A SWOT analysis is a powerful tool for understanding your competitors’ internal and external factors. Here’s how to conduct a SWOT analysis for each competitor:

  • Strengths: What are they good at? What are their unique advantages?
  • Weaknesses: Where are they vulnerable? What are their limitations?
  • Opportunities: What external factors could benefit them? Are there any emerging trends they could capitalize on?
  • Threats: What external factors could harm them? Are there any challenges they face?

Visual Example:

StrengthsWeaknessesOpportunitiesThreats
Strong brand reputationHigh pricesExpanding into new marketsNew competitors entering the market
Loyal customer baseLimited product lineDeveloping new products/servicesEconomic downturn
Efficient operationsPoor customer servicePartnering with other businessesChanging consumer preferences

Leveraging SWOT Insights:

Once you’ve completed your SWOT analyses, use the insights to inform your own business strategy. For example:

  • Exploit their weaknesses: Can you offer a better solution where they are lacking?
  • Capitalize on their missed opportunities: Are there any areas they haven’t explored that you could target?
  • Mitigate your own threats: Are there any lessons you can learn from their challenges?

By understanding your competitors’ strengths and weaknesses, you can develop a competitive advantage and position your business for success.

III. Key Sections of a Competitor Analysis

A comprehensive competitor analysis should include several key sections to provide a well-rounded view of your rivals. Here’s a breakdown of what to include:

Company Overview: Who Are They and What Do They Do?

Start with a general overview of each competitor. This should include:

  • Basic Information: Company name, location, website, founding date, and number of employees.
  • Mission and Values: What do they stand for? What are their core principles?
  • History: How did they get started? What are their major milestones?
  • Target Audience: Who are they trying to reach? What are their customer demographics and psychographics?
  • Market Share and Positioning: What is their position in the market? Are they a market leader, a niche player, or a disruptor?

Example:

  • Company Name: Acme Corp
  • Mission: To provide innovative solutions that simplify everyday life.
  • Target Audience: Tech-savvy millennials and Gen Z consumers.
  • Market Positioning: A leading provider of smart home technology.

Identifying Competitive Advantages and “Unfair Advantages”

Pay close attention to their competitive advantages – what makes them stand out from the crowd? Do they have any “unfair advantages” that are difficult to replicate, such as exclusive access to a particular technology or a strong network of partnerships?

Products and Services: What Are They Selling?

Analyze their product or service offerings in detail. Consider:

  • Features and Benefits: What are the key features and benefits of their offerings? How do they compare to your own?
  • Unique Selling Propositions (USPs): What makes their offerings unique? What are their key differentiators?
  • Product/Service Comparison Frameworks: Use frameworks like feature comparison matrices or perceptual maps to visualize and compare offerings across different competitors.

Marketing and Sales Strategies: How Do They Reach Customers?

Analyze their marketing and sales strategies to understand how they acquire and retain customers. Consider:

  • Marketing Channels: What channels do they use (e.g., social media, content marketing, email marketing, advertising)?
  • Sales Tactics: What sales methods do they employ (e.g., direct sales, online sales, channel partnerships)?
  • Customer Acquisition Cost (CAC): How much do they spend to acquire a new customer?
  • Customer Lifetime Value (CLTV): What is the lifetime value of their customers?

Examples:

  • Effective Marketing Tactic: A competitor running a successful referral program that drives significant customer acquisition.
  • Ineffective Marketing Tactic: A competitor investing heavily in print advertising that yields poor results.

Pricing and Revenue: How Much Do They Charge?

Analyze their pricing strategies and revenue models. Consider:

  • Pricing Models: What pricing models do they use (e.g., cost-plus pricing, value-based pricing, competitive pricing)?
  • Price Points: What are their price points for different products or services?
  • Revenue Streams: How do they generate revenue (e.g., product sales, subscription fees, advertising revenue)?

Remember: Price is not the only factor customers consider. Value, quality, and brand reputation also play a significant role.

Customer Reviews and Feedback: What Are People Saying About Them?

Gather and analyze customer reviews and feedback from various sources, such as:

  • Online Reviews: Check websites like Google Reviews, Yelp, and Trustpilot.
  • Social Media: Monitor their social media channels for comments and mentions.
  • Customer Surveys: Conduct surveys to gather feedback from your own customers about their experiences with competitors.

Analyzing Customer Sentiment

Look for patterns and trends in customer feedback. What are the most common compliments and complaints? What are the key areas where they excel or struggle?

Use this information to improve your own offerings and customer experience.

IV. Tools and Resources for Competitor Analysis

Gathering competitive intelligence requires the right tools. Fortunately, there are plenty of options available, both free and paid. Let’s explore some of the best resources to help you analyze your competition effectively.

Template link: https://promptmate.io/template-overview/

Free Market Analysis Tools: Get Started Without Breaking the Bank.

You don’t need a huge budget to start gathering valuable competitor data. Here are some free resources to get you started:

  • Competitor Websites: Your competitors’ websites are goldmines of information. Carefully analyze their website copy, product descriptions, pricing pages, and blog posts to understand their offerings, target audience, and marketing messages.
  • Google Trends: This free tool from Google allows you to see how often people are searching for specific keywords related to your industry and competitors. It can help you identify trending topics, seasonal fluctuations, and emerging competitors.
  • Social Media Analytics: Most social media platforms offer free analytics tools that provide insights into your competitors’ audience, engagement, and content performance. Use these tools to understand their social media strategy and identify potential opportunities.
  • Free Market Research Reports: Many organizations, including government agencies and industry associations, publish free market research reports that can provide valuable data and insights. For example, the U.S. Small Business Administration (SBA) offers a variety of free resources for small businesses, including market research guides and industry reports.
  • Publicly Available Data: Don’t forget about publicly available data from sources like the U.S. Census Bureau or the World Bank. This data can provide valuable insights into demographics, economic trends, and industry statistics.

Tips for Using Free Market Research Sources Effectively

  • Be critical of your sources: Not all free information is created equal. Evaluate the credibility and reliability of your sources before drawing conclusions.
  • Combine multiple sources: Use a variety of sources to get a well-rounded view of the competitive landscape.
  • Focus on your specific needs: Don’t get overwhelmed by the sheer volume of information available. Focus on gathering data that is relevant to your specific business goals.

Advanced Market Research Tools: Invest in Your Success

While free tools can be helpful, investing in more advanced tools can provide deeper insights and save you time. Here are some options to consider:

  • Market Research Databases: Databases like Statista and IBISWorld offer access to comprehensive market data, industry reports, and competitor profiles.
  • Competitor Analysis Software: Tools like Crayon and Semrush provide in-depth competitor monitoring and analysis capabilities, allowing you to track website changes, social media activity, and marketing campaigns.
  • Professional Market Research Services: For the most comprehensive and customized insights, consider partnering with a professional market research firm. These firms have the expertise and resources to conduct in-depth analysis and provide actionable recommendations.

Vanzbon’s Market Research Expertise

At Vanzbon, we specialize in providing global market research and competitor analysis services. Our team of experts can help you:

  • Identify your top competitors worldwide.
  • Gather in-depth intelligence on their business operations, marketing strategies, and financial performance.
  • Conduct SWOT analyses and identify opportunities for differentiation.
  • Develop a comprehensive market entry strategy.

Contact us today to learn more about how we can help you gain a competitive edge.

V. Creating a Competitor Analysis Report

You’ve gathered all this valuable intel on your competitors—now what? It’s time to compile your findings into a clear, concise, and actionable competitor analysis report. Here’s how to make it shine:

Visualizing Your Findings: Charts, Graphs, and More.

Let’s face it, walls of text can be overwhelming. To make your competitor analysis report engaging and easy to digest, incorporate visuals. Here are a few ideas:

  • Competitor Analysis Slides: If you’re presenting your findings, create a compelling slide deck (like this one!) with charts, graphs, and key takeaways. This can be especially helpful for communicating your analysis to stakeholders or investors.
  • Competitor Analysis Presentations: A well-structured presentation can bring your analysis to life. Use visuals to highlight key data points and trends. Consider embedding a relevant YouTube video from a trusted source like a university or industry expert to illustrate a point.
  • Competitive Analysis Decks: A concise, visually-driven deck can be a powerful tool for summarizing your findings and sharing them with your team.
  • Charts and Graphs: Use bar charts, pie charts, and line graphs to visualize data like market share, pricing comparisons, and financial performance.
  • Tables: Organize key information into easy-to-read tables, such as feature comparison matrices or SWOT analysis summaries.
  • Infographics: Combine visuals and text to create engaging infographics that tell a story about your competitors.

Examples of Effective Visualizations:

  • Market Share Pie Chart: A pie chart showing the market share of each competitor.
  • Pricing Comparison Bar Chart: A bar chart comparing the prices of different products or services offered by competitors.
  • SWOT Analysis Matrix: A matrix summarizing the strengths, weaknesses, opportunities, and threats of each competitor.

The Power of a Compelling Narrative: Tell a Story with Your Data.

Don’t just present data—tell a story. Weave a narrative around your findings to make them more engaging and memorable. Here’s how:

  • Start with a clear introduction: Set the stage by explaining the purpose of your analysis and the key questions you’re trying to answer.
  • Highlight key insights: Don’t bury your most important findings in a sea of data. Call out key takeaways and use visuals to emphasize them.
  • Draw conclusions and make recommendations: Don’t just present data—interpret it. What do your findings mean for your business? What actions should you take based on your analysis?
  • Tailor your report to your specific audience: Consider who will be reading your report and adjust your tone and level of detail accordingly. For example, a report for investors will likely require a different approach than a report for your internal team.

By combining compelling visuals with a strong narrative, you can create a competitor analysis report that is both informative and persuasive. This will help you communicate your findings effectively and drive action within your organization.

Free Download

Vanzbon’s Competitor Analysis Template

VI. Need Help with Your Competitor Analysis?

You’re now equipped with the knowledge and tools to conduct a thorough competitor analysis for your business plan.

Never underestimate the importance of competitor analysis. It’s an essential process for any business that wants to:

  • Reduce risk: By understanding the competitive landscape, you can anticipate challenges and make informed decisions.
  • Identify opportunities: Uncover gaps in the market, exploit competitor weaknesses, and capitalize on emerging trends.
  • Gain a competitive edge: Develop a winning strategy that differentiates your business and attracts customers.

Conducting a comprehensive competitor analysis can be time-consuming and complex, especially when expanding into new markets. If you need support, Vanzbon is here to help.

Our global market research and competitor analysis services can provide you with the insights you need to succeed. We offer:

  • In-depth competitor analysis: We’ll analyze your top competitors, providing detailed profiles and SWOT analyses.
  • Market research: We’ll conduct comprehensive market research to identify trends, opportunities, and challenges.
  • Industry-specific solutions: We have expertise in a variety of industries, including construction, manufacturing, and technology.

Contact us today for a free consultation and let us help you achieve your business goals.