Competitive Analysis Can Grow Revenue—Here’s How (2022) (2024)

Table of Contents
Free: Competitive Analysis Template Get the competitive analysis template delivered right to your inbox. Thanks for subscribing. You’ll start receiving free tips and resources soon. In the meantime, start building your store with a free 3-day trial of Shopify. What is a competitive analysis? Competitive analysis example: what does one look like? Why competitor analysis matters for ecommerce Free: Business Plan Template Get the business plan template delivered right to your inbox. Thanks for subscribing. You’ll start receiving free tips and resources soon. In the meantime, start building your store with a free 3-day trial of Shopify. How to do a competitor analysis 1. Select 7–10 competitors 2. Create a spreadsheet 3. Determine competitor types 4. Identify your competitors’ positioning 5. Determine competitive advantage and offerings 6. Understand how your competitors market their products 7. Conduct a SWOT analysis Free: SWOT Analysis Template Get the SWOT analysis template delivered right to your inbox. Thanks for subscribing. You’ll start receiving free tips and resources soon. In the meantime, start building your store with a free 3-day trial of Shopify. Collect data with these competitor analysis tools SEO Analysis PPC/keyword performance Social media performance Email marketing Content marketing performance A competitive analysis template Free: Competitive Analysis Template Get the competitive analysis template delivered right to your inbox. Thanks for subscribing. You’ll start receiving free tips and resources soon. In the meantime, start building your store with a free 3-day trial of Shopify. Six pitfalls of competitor analysis in marketing 1. Competitive analysis is not a one-and-done exercise 2. Confirmation bias is real 3. Data without action is useless 4. Working harder instead of smarter 5. Starting without a direction 6. Not accounting for market timing Competitive analysis: your business edge Ready to create your first business? Start your free trial of Shopify—no credit card required. Competitive Analysis FAQ What is the meaning of competitive analysis? What is in a competitive analysis? How do you write a competitive analysis? Is SWOT a competitive analysis? FAQs

There's nothing more frustrating in business than seemingly doing everything right, only to see your competition continue to grow, while your own company remains stagnant.

Fortunately, doing a competitor analysis can be incredibly helpful for understanding your strengths and weaknesses and help you find your edge.

This post outlines a method for conducting a competitive analysis that any business can use, whether you’re a successful store owner that’s re-evaluating your view of the current market or you’re just getting ready to launch your businessfor the very first time.

Below, we’ll show you the tools you need to perform an effective competitor analysis and help you identify what to make note of (e.g., social/search presence, pricing, etc.). We’ve even included a free competitor analysis template you can follow along with and fill out while conducting your own analysis.

Find your competitive edge 🎯

  • What is a competitive analysis?
  • Why competitor analysis matters for ecommerce
  • How to do a competitor analysis
  • Collect data with these competitor analysis tools
  • A competitive analysis template
  • Pitfalls of competitive analysis in marketing
  • Competitor analysis: your business edge
  • Competitive analysis FAQ

Competitive Analysis Can Grow Revenue—Here’s How (2022) (1)

Free: Competitive Analysis Template

By evaluating the strengths and weaknesses of your competition, you can begin to formulate how to give your company an advantage. Download our free competitive analysis template and gain an edge over the competition.

Competitive Analysis Can Grow Revenue—Here’s How (2022) (2)

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What is a competitive analysis?

A competitive analysis, also referred to as a competitor analysis, is a comparison of competitors’ strategies used to evaluate the strengths and weaknesses of different marketing approaches within an industry.

It helps a business determine potential advantages and barriers within a market around a product or service and generally helps brands monitor how direct and indirect competitors are executing tactics like marketing, pricing, and distribution.

Competitive analysis example: what does one look like?

The competitive analysis can vary widely depending on what it is you’re trying to learn about your competitors. You might do a competitive analysis around a specific aspect—like a competitor’s website approach, for example—or you might do a high-level look at their marketing approach as a whole. Ultimately the goal is to help you understand your strengths and reach new potential customers.

There are a lot of different ways you can structure a competitive analysis, so let’s look at the different types of information that are frequently seen within this type of research.

If you’re doing a high-level competitive analysis, there are a few major elements you’ll want to be sure to include around around competitors’ market positioning, such as:

  • Who their target customers are;
  • What their main differentiator/unique value add is for their business and products;
  • Key features/benefits they highlight in sales materials;
  • Price points for products across a variety of marketplaces ;
  • How they approach shipping;
  • Whether they’ve received any funding or venture capital.

These sections will help you get a zoomed out look at what separates your competitors from each other and how they’re working to differentiate themselves from competition within your niche.

If you’re wanting to look at more specific elements of your competitors’ approaches, you might consider adding sections like these to your competitor analysis:

  • Website features ( search tools, product images, design/layout, etc.)
  • Customer experience elements ( checkout workflows, customer support, mobile UX, etc.)
  • Copywriting tactics (product descriptions, calls to action, etc.)
  • Social media approach (channels used, frequency of posting, engagement, etc.)
  • Content marketing tactics (blog topics, content types, etc.)
  • Marketing tactics (types of promotions, frequency of discounts, etc.)
  • Email marketing approach (Newsletter, abandoned cart emails, promos, etc.)
  • Customer reviews (language used around products, recurring complaints, etc.)

Generally, competitive analysis can take on many shapes and forms depending on what a company wants to evaluate about its competitors—but this gives you a rough idea of what could be included within the different sections.

Read more: What Is Product Development? Learn The 7-Step Framework Helping Businesses Get to Market, Faster and Easier

Why competitor analysis matters for ecommerce

Maybe at this point you’re thinking, “OK, but why does competitor analysis matter for me as a business owner or marketer?”

The main reason this activity is important is because you can’t effectively compete without knowing your competitors—and you can’t differentiate yourself if you don’t know what actually makes you different.

If you’re starting an ecommerce business, an analysis of competitors helps you to:

  • Make more informed marketing decisions;
  • Identify industry trends;
  • Benchmark against competitors;
  • Solidify a unique value proposition ;
  • Determine pricing (upmarket, down, or mid);
  • Unearth new ways of speaking to customers, or even new customers to speak to;
  • Find a gap in the marketing and also ensure there’s a market in the gap.

This type of analysis is not just for first-time ecommerce retailers either. A competitor analysis can, and should, be a living document that’s constantly evolving as a company grows and matures over time.

Maintaining a resource like this is a powerful way to stay on top of how your brand stacks up against the competition right now—but it also can help provide clear direction on how you’ll continue to excel in the future.

Need an example for reference? Here’s one showing what a competitor analysis might look like:

Competitive Analysis Can Grow Revenue—Here’s How (2022) (3)

Competitive Analysis Can Grow Revenue—Here’s How (2022) (4)

Free: Business Plan Template

Business planning is often used to secure funding, but plenty of business owners find writing a plan valuable, even if they never work with an investor. That’s why we put together a free business plan template to help you get started.

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How to do a competitor analysis

Once you’re ready to dive into a competitive analysis of your own, follow the steps outlined here to keep your research structured and organized appropriately.

1. Select 7–10 competitors

To identify relevant competitors to include in your analysis, start with searches on Google, Amazon, and Alexa around your product and business idea. You want a mix of competitors that:

  • Sell similar types of products;
  • Have a similar business premise;
  • Market to similar and slightly different audience demographics;
  • Are both new to the marketplace and more experienced.

To put together a list of diverse competitors that will give you a good look at the competitive landscape that’s not too small and not too large, it’s a good idea to stick with a group of seven to 10 relevant competitors.

2. Create a spreadsheet

As you collect data on this group of competitors, keep it organized within a table or spreadsheet that can easily be shared and updated over time. Within this document, you’ll compare and contrast competitors based on different criteria such as:

  • Price range;
  • Product offerings;
  • Social media engagement;
  • Content used for lead generation;
  • First-time visitor offers;
  • Other traits that are worth comparing.

Competitive Analysis Can Grow Revenue—Here’s How (2022) (6)
3. Determine competitor types

Starting with your list of competitors, begin your spreadsheet by categorizing each one as a primary or secondary competitor. This will help you better determine how they’ll relate to your business.

  1. Direct competitors, or primary competitors, to your business that sell a similar product to a similar audience. Example: Nike and Adidas are primary competitors.
  2. Indirect competitors are secondary competitions that offer a high-end or low-end version of your product to a different audience. Example: Victoria’s Secret and Walmart are secondary competitors.
  3. Tertiary competitors are related brands that may market to the same audience but don’t sell the same products as you or directly compete with you in any way. They may be potential partners or future competitors if they choose to expand their business. Example: Gatorade and Under Armour.

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4. Identify your competitors’ positioning

Positioning is the most persuasive marketing tool for a business. Good positioning helps you connect with a target audience and keeps them around longer. It also determines your messaging, values, and overall business strategy.

This is exactly why understanding your competitors positioning is so important. You can learn how to separate yourself and build a favorable reputation in your customers’ eyes. Differentiation also helps increase brand awareness and justify your prices, which impacts your bottom line.

Analyze these key channels to determine positioning and messaging:

  • Social media;
  • Press releases;
  • Website copy;
  • Events;
  • Interviews;
  • Product copy.

When identifying your competitors’ positioning, ask yourself the following questions:

  • What story do they express to customers?
  • How do they position their products?
  • What’s their company description?
  • How do they describe their unique value proposition?

Understand how competitors interact with their followers, customers, employees, partners, and shareholders. If you can pinpoint their communication framework, you’ll be able to position yourself differently and set yourself apart from competitors.

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5. Determine competitive advantage and offerings

Once you understand your competitors’ messaging, take a look at their competitive advantage and product or service offer. The vast majority of succesful companies have a clear "secret sauce" compared to their competition.

For example, a fashion retailer’s competitive advantage may be high-quality, reasonably priced products and expedited shipping services. An online educator may have 20 years of experience teaching and working in their specific industry. Unique selling propositions like these are not easy to replicate and can drive brand name recognition for a business.

Take time to look at your competitors’ goods and services and compare them to your own. Read online reviews of your target audience to see why customers choose their company. It could be that they offer similar products at a lower price or have a focus on sustainability. Either way, you’ll want to learn their advantage and figure out how you can offer something better.

Competitive Analysis Can Grow Revenue—Here’s How (2022) (9)

6. Understand how your competitors market their products

Marketing is the secret to the most successful ecommerce stores. A good offering is the cost of entry, but marketing takes you to the top. Unfortunately, most businesses fail to undertake a review of their competitors’ marketing. They assume that everyone is on Instagram, running Facebook ads, and optimizing their site for search.

And a lot of them are. But understanding how your competitors market their products takes a different perspective. You want to find out what offers they are promoting, how they are building and managing their contact lists, and how they are distributing content online.

Along with the research you’re doing through software and tools, it’s a good idea to get hands-on with your competitive research, too. Assume the role of a potential customer and check out what your competitors are doing in the marketing department.

You can do this by:

  • Signing up for their newsletters;
  • Subscribing to their blogs;
  • Following them on social media;
  • Abandoning a product in the shopping cart;
  • Purchasing a product.

As you execute these activities, be sure to document your findings with notes on each tactic you see. By studying their approaches to cart abandonment and looking at how they deliver support via social media (and beyond), you can spot interesting approaches your competition is using to attract more customers and to drive sales. The insights you gather during this stage can be incredibly helpful for your sales team specifically.

Competitive Analysis Can Grow Revenue—Here’s How (2022) (10)

7. Conduct a SWOT analysis

Consider conducting a SWOT analysis to accompany the data you collect. It’s a competitive analysis framework that lists your company’s strengths, weaknesses, opportunities, and threats and is helpful in shaping your overall marketing strategy as well. SWOT leans into your competitors’ strengths and compares them to your business to define areas of improvement.

Strengths and weaknesses focus on the present. They are elements you control and can change over time, including:

  • Reputation;
  • Product offering;
  • Partnerships;
  • Intellectual property;
  • Number of employees;
  • Market share;
  • Assets.

Opportunities and threats are outside your control. You can plan for changes but can’t influence these elements. They include:

  • Competitors’ products;
  • The economy;
  • Consumer trends;
  • Regulation;
  • Market size;
  • Market demand.

Aim to run a SWOT analysis annually. It helps inform your break-even analysis and keeps tabs on the competitive landscape. You can anticipate problems and make continuous improvements to your business. Should you seek funding, you’ll want to include an updated SWOT analysis in your proposed business plan.

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Free: SWOT Analysis Template

Get your free SWOT Analysis Template. Use this free PDF to future-proof your business by identifying your strengths, weaknesses, opportunities, and threats.

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Collect data with these competitor analysis tools

Once you know which direct competitors you’ll be studying, it’s time to start diving into research and data collection for your competitive analysis. The good news is that today there are many different tools and software available that can make data collection for your competitive analysis simpler, more efficient, and more accurate.

Let’s look at a few different resources that can help you gather key insights into different aspects of your competition’s marketing approach from their product or service positioning to their content marketing and social media efforts as well.

SEO Analysis

  • Ahrefs: checks any URL’s top-performing organic keywords and gets estimated traffic reports around those keywords.
  • Alexa: helps define audience demographics and search rankings for your site as well as your competitors websites.
  • SE Ranking: shows competitors’ paid and organic search performance, strategy, and keywords.

PPC/keyword performance

  • SimilarWeb: gives insights into estimated monthly visits and key traffics sources for a website. Helpful for determining a rough view of your competitor's marketshare.
  • SpyFu: helps you research and download the most profitable keywords your competition is using in their PPC campaigns.
  • iSpionage: shows how many keywords competitors are using on Google Ads and which ones they’re targeting, as well as their projected monthly budget.
  • SEMrush: helps identify your competition’s keywords, does a site audit, and analyzes backlinks.
  • WhatRunsWhere: provides data around competitors’ advertising approaches across the internet.

Social media performance

  • RivalIQ: shows how often competitors post across social channels, their average engagement rates, and their most successful content.
  • Followerwonk: provides Twitter insights around follower demographics, key influencers, and performance metrics.
  • Sprout Social: benchmarks around competitors’ social performance across social channels, influencer identification, and reporting.

Email marketing

  • Owletter: analyses changes in sending frequency and spots trends in competitors’ emails.
  • MailCharts: aggregates emails and provides insight into frequency of email sends, subject line tactics, and more.

Content marketing performance

  • BuzzSumo: helps you see the top-performing content for topics and for specific competitors, as well as total social shares.
  • Monitor Backlinks: helps monitor backlinks each time someone references your content, plus that of your competitors.
  • Feedly: aggregates content as it’s published so you can study topics covered by competitors in one place.

Using these resources, start gathering data and dropping it into your competitive analysis spreadsheet so your findings are all stored in a single, organized space.

A competitive analysis template

If you’re not still quite sure how to start laying out your template for your analysis, here’s an example and template you can work from to get the ball rolling.

Let’s say you sell makeup brushes. You’ll see how you could compare competitors’ approaches (and identify what you could do to stand out):

Competitor 1 (Primary)Competitor 2 (Primary)Competitor 3 (Primary)Competitor 4 (Secondary)Competitor 5 (Secondary)
Company NameName 1Name 2Name 3Name 4Name 5
Price Point$15-20$20-25$50-80$10-15$100+
Target AudienceWomen ages 18-25Women ages 18-30Women ages 18-30Girls ages 13-18Women ages 40-65
Market Share10%20%40%10%10%
Key competitive advantageLarge Instagram followingFree shipping year-roundAggressive Facebook ad spendingPriceLuxury angle
Marketing strategyNewsletter and Instagram adsNewsletter, some social media, retargetingFacebook adsCheapest on AmazonMagazines, TV, commercials, some social
# of products751008552540

You can add as many sections as you want to your template, but remember to keep your group of primary and secondary competitors limited to seven to 10 so that your frame of reference is highly relevant.

Want a simple competitive analysis template to speed up the process?

Competitive Analysis Can Grow Revenue—Here’s How (2022) (14)

Free: Competitive Analysis Template

By evaluating the strengths and weaknesses of your competition, you can begin to formulate how to give your company an advantage. Download our free competitive analysis template and gain an edge over the competition.

Competitive Analysis Can Grow Revenue—Here’s How (2022) (15)

Get the competitive analysis template delivered right to your inbox.

Almost there: please enter your email below to gain instant access.

We'll also send you updates on new educational guides and success stories from the Shopify newsletter. We hate SPAM and promise to keep your email address safe.

Thanks for subscribing. You’ll start receiving free tips and resources soon. In the meantime, start building your store with a free 3-day trial of Shopify.

Six pitfalls of competitor analysis in marketing

Now that you know how to put together a competitive assessment, let’s go over some of the main pitfalls to be aware of that can throw off the insights you’ve gathered.

1. Competitive analysis is not a one-and-done exercise

Never revisiting your original insights (or never updating them, for that matter) can lead to faulty data and poor decisions. Businesses are constantly evolving, so it’s important to remember that keeping an eye on your competitors is an ongoing process—not something you do once and then never again. Ultimately, you have to be at the top of your game consistently if you want to increase your market share.

2. Confirmation bias is real

As humans, we have a tendency to jump to conclusions around our assumptions. This is called confirmation bias. As you work through your analysis, it’s important to be aware of your initial assumptions and to test them thoroughly rather than leaning on what you “think” is true about your competitors. Let the data inform your decisions rather than letting assumptions take the lead.

3. Data without action is useless

If you’re putting in the work to do a competitor analysis, be sure that you’re acting on the findings rather than letting them gather virtual dust on your computer, buried in an obscure file folder. Make a strategic plan around your findings and execute on the unique angles and tactics that you’ve discovered during this process.

4. Working harder instead of smarter

With so many great resources available that simplify the data collection process around competitive analysis today, putting together a top-notch, highly accurate comparison is easier than ever before. Don’t reinvent the wheel and do things the hard way: make the investment into tools that speed up the process and provide the important insights you need to make informed, data-backed decisions about your business.

5. Starting without a direction

If you’re directionless while putting together your competitive analysis and have no clear end objective, the work will be much, much harder. Before diving into research, define your goal and what you hope to learn about your competition. What do you want to accomplish? What do you want to build? It is your own business after all!

6. Not accounting for market timing

When looking at competitor data, be sure to study how companies have grown and progressed over time rather than examining their approaches at a single fixed point.

Sometimes information about how your competitors have evolved their tactics can be even more useful than knowing what they did in the early days (or what they’re doing right now). Understanding past, current, and future industry trends will help you make better decisions.

Competitive analysis: your business edge

Competitive intelligence is key to starting a business. By doing market competition analysis on an ongoing basis, you can always be on top of your competition. You’ll be able to break into new markets, launch new products, and keep tabs on your competitors’ customers—giving you a cutting edge approach to small business that keeps your business or startup agile.

Ready to create your first business? Start your free trial of Shopify—no credit card required.

Competitive Analysis FAQ

What is the meaning of competitive analysis?

A competitive analysis is the analysis of your competitors and how your business compares. By evaluating the strengths and weaknesses of your competition, you can begin to formulate how to give your company an advantage.

What is in a competitive analysis?

  • Who a competitor’s target customers are;
  • What market share they currently own;
  • What their main competitive advantages are;
  • Key product features/benefits;
  • Price points for products, even across different marketplaces;
  • How they do shipping;
  • If they’ve received any funding or venture capital.

How do you write a competitive analysis?

  1. Choose seven to 10 competitors.
  2. Create a spreadsheet to track your data.
  3. Determine competitor types.
  4. Identifying positioning.
  5. Determine competitive advantage and offering.
  6. Understand how your competition markets themselves.
  7. Conduct a SWOT analysis.

Is SWOT a competitive analysis?

SWOT is a competitive analysis framework that helps gain insight into a current business situation. SWOT represents Strengths, Weaknesses, Opportunities, and Threats

Competitive Analysis Can Grow Revenue—Here’s How (2022) (2024)

FAQs

What are the 5 steps parts of a competitive analysis? ›

How to conduct your competitive analysis
  • Identify your top ten competitors.
  • Analyze and compare competitor content.
  • Analyze their SEO.
  • Look at their social media engagement.
  • Identify areas for improvement.
10 Apr 2020

How does competition affect revenue? ›

Competition in business decreases an individual companies market share and shrinks the available customer base, especially if demand is limited. A competitive market can also force lower prices to stay competitive, decreasing profit margins for each sale or service.

What is competitive analysis explain with examples? ›

A competitive analysis is a strategy that involves researching major competitors to gain insight into their products, sales, and marketing tactics. Implementing stronger business strategies, warding off competitors, and capturing market share are just a few benefits of conducting a competitive market analysis.

How do you start a competitive analysis essay? ›

The analysis begins with a list of your company's competitors.
...
A competitive analysis covers five key topics:
  1. Your company's competitors.
  2. Competitor product summaries.
  3. Competitor strengths and weaknesses.
  4. The strategies used by each competitor to achieve their objectives.
  5. The market outlook.

What are the three important factors of competitive analysis? ›

With this in mind, these seven competitive factors should help you focus your competitive analysis.
  • Understand Core Products and Services. ...
  • Long- and Short-Term Market Trends. ...
  • Focus on the Right Competitors. ...
  • Focus on the Purpose of Your Competitive Analysis. ...
  • Be Flexible As Data Shows Popular Trends.
29 Nov 2017

What is 4 components of competitive analysis explain? ›

There are four key components to a solid competitor analysis framework: Porter's Five Forces. SWOT Analysis. Business Models. Customer Journey Mapping.

What are the types of competitive analysis? ›

The following are five types of competitive analysis frameworks for organising and displaying data:
  • SWOT analysis. ...
  • Strategic group analysis. ...
  • Growth-share matrix. ...
  • Porter's five forces. ...
  • Perceptual mapping. ...
  • List your primary competitors. ...
  • Find out the types of products and services they sell.
7 Apr 2022

What is a good example of competition? ›

What Is an Example of Perfect Competition? Consider a farmers market where each vendor sells the same type of jam. There is little differentiation between each of their products, as they use the same recipe, and they each sell them at an equal price.

What is a good example of a competitive market? ›

A great example of competitive market is farming. There are thousands of farmers and not one of them can influence the market or the price based on how much they grow. All the farmer can do is grow the crop and accept whatever the current price is for that product.

Does competition increase success? ›

In fact, research suggests that healthy competition has a direct effect on performance thanks to its degree of social motivation. So as long as you're able to keep your head on straight about it, having competitors might actually increase your chances of long-term brand success.

What is revenue in perfect competition? ›

For a perfectly competitive firm, total revenue (TR) is the market price (P) times the quantity the firm produces (Q), or. TR = P x Q. The relationship between market price and the firm's total revenue curve is a crucial one.

Does competition increase growth? ›

Choice for customers is a good thing in itself, but competition between firms also leads to increased productivity1 and economic growth. It can be hard directly to measure the effect of – for example – competition law on economic growth.

What are the benefits of competitive analysis? ›

Following are three benefits of frequent competitive analysis that can help your business develop a strategy for success.
  • Evaluate the viability of new products and services. ...
  • Rate the effectiveness of your marketing strategy. ...
  • Identify unserved or underserved gaps.
5 Jul 2019

What is the importance of competitive analysis? ›

The purpose of a competitor analysis is to understand your competitors' strengths and weaknesses in comparison to your own and to find a gap in the market. A competitor analysis is important because: It will help you recognise how you can enhance your own business strategy.

How do you write a competitive advantage in a business plan? ›

Business plan tips: how to identify your competitive advantage
  1. Identify your competitors. Start by making a list of your direct and indirect competitors. ...
  2. Find their strengths and weaknesses. Identify what your competitors are doing right. ...
  3. Figure out your “special ingredient”
23 Oct 2017

What is the first step in a competitive analysis? ›

The first step to doing a competitive analysis is identifying your competitors. There are two types of competitors: direct and indirect. A direct competitor is one that is offering the same product or service and targeting the same customer base as your business.

What is a good way to start an analysis? ›

The best introductions start with a hook such as a rhetorical question or a bold statement and provide global context, outlining questions that your analysis will tackle. A good introduction concludes with a thesis statement that serves as the north star for the entire essay.

What are the 4 key factors for competitive success? ›

What Are the Key Planning Factors for Competitive Success in...
  • Knowing Customer Needs. ...
  • Understanding Competitors' Strengths and Weaknesses. ...
  • Finding Markets That Are Large or Growing.
21 Nov 2018

What are the 4 ways to develop competitive advantage? ›

The four primary methods of gaining a competitive advantage are cost leadership, differentiation, defensive strategies and strategic alliances.

What are 3 competitive advantage strategies? ›

Michael Porter, the famous Harvard Business School professor, identified three strategies for establishing a competitive advantage: Cost Leadership, Differentiation, and Focus (which includes both Cost Focus and Differentiation Focus)[1].

What are the 4 forms of competition? ›

There are four types of competition in a free market system: perfect competition, monopolistic competition, oligopoly, and monopoly. Under monopolistic competition, many sellers offer differentiated products—products that differ slightly but serve similar purposes.

What is a competitive analysis in a business plan? ›

Competitive analysis involves identifying your direct and indirect competitors using research to reveal their strengths and weaknesses in relation to your own. Direct competitors market the same product to the same audience as you, while indirect competitors market the same product to a different audience.

What is competitive value analysis? ›

What is a Competitive Analysis? A competitive analysis is the process of identifying your competitors and evaluating their strategies to determine their strengths and weaknesses relative to your own business, product, and service.

What is a competitive analysis chart? ›

A competitive analysis report outlines the strengths and weaknesses of your competitors compared to those of your own business. Typically, a competitive analysis report will contain: A description of your business's target market. Details about the features of your product compared to your competitors' products.

What is competition in your own words? ›

Competition is a rivalry where two or more parties strive for a common goal which cannot be shared: where one's gain is the other's loss (an example of which is a zero-sum game). Competition can arise between entities such as organisms, individuals, economic and social groups, etc.

What is a real life example of competition? ›

Farmers' markets: The average farmers' market is perhaps the closest real-life example to perfect competition. Small producers sell nearly identical products for very similar prices.

What are the 5 competitive advantages? ›

Sources of Competitive Advantage
  • Product Attribute Differentiation. One way to gain an advantage over competitors is by differentiating your product from theirs. ...
  • Customers' Willingness to Pay. ...
  • Price Discrimination. ...
  • Bundled Pricing. ...
  • Human Capital.
10 Nov 2020

What is a competitive advantage and give an example of one? ›

For example, if a company advertises a product for a price that's lower than a similar product from a competitor, that company is likely to have a competitive advantage. The same is true if the advertised product costs more, but offers unique features that customers are willing to pay for.

What are the 6 factors of competitiveness? ›

Answer and Explanation: The six factors of competitive advantage are selection, quality, service, turnaround, price, and speed.

How do you keep competitive advantage? ›

So, here are some quick tips to help you do just that:
  1. Invest in your expertise. The first step to building a strong reputation for yourself and your business is to choose a specific expertise -- and focus on developing it. ...
  2. Pick your battles. ...
  3. Compete against yourself. ...
  4. Share your secrets and successes. ...
  5. Keep innovating.
2 Nov 2018

Why is competition the key to success? ›

Competition teaches you to bounce back from failure and respond positively to pressure and challenges, and then adapt to move forward towards greater success. Just like everyone else in this world, you need to know how to handle losses or failures, to pick up the pieces so that you can grow.

How can competition cause success? ›

competition breeds innovation

Competition helps you identify your strengths and weaknesses, which then leads to innovation and creative problem solving. And that's when real growth and development happen.

How does competitive advantage lead to success? ›

Having a competitive advantage over your competition is essential to business success because: It can contribute to higher profit margins. It may help attract more customers more frequently. It helps maintain brand loyalty.

What are 4 types of revenue? ›

Rent revenue. Dividend revenue. Interest revenue. Contra revenue (sales return and sales discount)

What are the 3 main types of revenue models? ›

Types of Revenue Models
  • Ad-Based Revenue Model. ...
  • Affiliate Revenue Model. ...
  • Transactional Revenue Model. ...
  • Subscription Revenue Model. ...
  • Web Sales. ...
  • Direct Sales. ...
  • Channel Sales (or Indirect Sales) ...
  • Retail Sales.

How do you grow competitiveness? ›

How to gain a competitive advantage
  1. Maintain your skills.
  2. Add value to the company.
  3. Develop new skills.
  4. Improve interpersonal skills.
  5. Communicate effectively.
  6. Exceed expectations.
12 Dec 2019

How can I grow faster than competition? ›

They don't have the knowledge or resources to compete head to head by doing existing things better.
...
Three Ways To Gain An Advantage
  1. Explore Brand New Strategies. ...
  2. Explore New Tactics Within A Similar Strategy. ...
  3. Do It Faster and/or Better. ...
  4. Access To Capital.
18 Sept 2013

How does competition cause economic growth? ›

Economic literature suggests that competition can have broad economic effects in three areas: the total amount of economic wealth available in the market at a given point of time, companies' productive process, and their incentives to innovate or improve the quality of their products.

What should be included in a competitor analysis presentation? ›

  1. Competitors.
  2. Market Leaders. Types. Positioning. Comparison. Growth. Revenue/Profit. Profiles.
  3. Target Market. Size. Attractiveness. Trends. Success Factors.
  4. Market Analysis.
  5. Agenda.
5 Sept 2022

Why is competitive analysis important? ›

The purpose of a competitor analysis is to understand your competitors' strengths and weaknesses in comparison to your own and to find a gap in the market. A competitor analysis is important because: It will help you recognise how you can enhance your own business strategy.

What is competitive analysis in business plan? ›

Competitive analysis involves identifying your direct and indirect competitors using research to reveal their strengths and weaknesses in relation to your own. Direct competitors market the same product to the same audience as you, while indirect competitors market the same product to a different audience.

How do you conduct an analysis? ›

How does one do an analysis?
  1. Choose a Topic. Begin by choosing the elements or areas of your topic that you will analyze. ...
  2. Take Notes. Make some notes for each element you are examining by asking some WHY and HOW questions, and do some outside research that may help you to answer these questions. ...
  3. Draw Conclusions.

How do you measure competition? ›

Entry and exit rates are the most commonly used dynamic measure. The entry rate is calculated by dividing the number of new firms in each year by the total number of active firms in that year. The exit rate is calculated likewise, using the number of exiting firms each year.

What is key competitor analysis? ›

A competitor analysis, also referred to as a competitive analysis, is the process of identifying competitors in your industry and researching their different marketing strategies. You can use this information as a point of comparison to identify your company's strengths and weaknesses relative to each competitor.

What tools are used for competitor analysis? ›

Best competitor analysis tools
  • Quick Search.
  • BuiltWith.
  • WooRank.
  • Google AdWords Keyword Planner.
  • SEMrush.
  • SpyFu.
  • Owletter.
  • SimilarWeb.
7 Oct 2021

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