We understand that thinking about doing a competitive analysis can be overwhelming and uninteresting, but it’s a necessary task if you want to develop a strong brand and compete in the market. If you need help completing a new or updated analysis, we have a simple guide and a free template that you can use. Let’s get started.
What Is a Competitive Analysis?
Competition analysis involves examining other individuals or businesses who are in the same field as you. You assess their strengths, weaknesses, and branding strategies to determine how you can improve your own approach.
Why Do You Need to Do a Competitive Analysis?
Performing a thorough competitive analysis can provide you with an unbiased evaluation of your position in the market. By identifying the similarities and differences between you and your competitors, you can pinpoint the areas where you can excel and differentiate yourself. This can ultimately lead to a more successful outcome.
When Should You Do a Competitive Analysis?
The ideal time to conduct a branding exercise is during a brand launch or update. However, if you have never done one before, now is the perfect opportunity.
Who On Your Team Should Be Involved?
The people you should involve in branding depends on how established your brand is. If you are just starting out or are a new company, it would be best to have co-founders and other employees who have design or branding experience. If you are updating or creating a new brand, you should include relevant stakeholders and a brand steward (someone who oversees the brand, regardless of job title).
How to Do a Competitive Analysis
We understand you have a busy schedule today, so we’ll provide a concise and straightforward competitive analysis. However, feel free to modify and expand it as needed to get a deeper understanding. The main objective is to pinpoint the essential details that will help you differentiate your brand from your competitors, such as their identity, communication style, and how your brand compares to theirs.
Step 1: Assemble a List of Competitors
List all the people in your industry, including those who may compete with you or are your rivals. Don’t forget to include your enemies. Write down everyone who comes to mind.
Step 2: Split Them Into Two Groups
Divide your list into two buckets: current and aspirational.
- Current competitors: Brands that are your current competitors or in a similar space.
- Aspirational competitors: Brands you wish you could compete with (the Nikes, Apples, and BMWs of your industry).
Step 3: Download Your Free Competitive Analysis Template
To save you time (and help you understand what information you should be documenting), we’ve created a handy interactive PDF template, which you can fill in for as many competitors as you need (just use multiple templates). You can also print, email, or share the template with your team.
Step 4: Work Through the Template
Now it’s time to analyze your competitors, looking at every aspect of their brand, from their tagline, to their values, to their visual identity (logo, colors, typography, etc.). As you’ll see in the template, this includes things like:
- Brand Soul (purpose, vision, mission, values)
- Strength and weaknesses
- Value prop
We prefer to be more concise when filling out the competitive analysis, but some people like to get super detailed at this point. (This also depends on how much time or bandwidth you have to dedicate to this exercise.) Naturally, the more detailed you are, the better you can classify your competition. Just remember your goal is to identify similarities and differences, so use whatever language helps you do this.
Even if you do a high-level analysis, you’ll notice particular trends in the way your competitors do things, such as similar visual identities (e.g, in the video-streaming sphere, Netflix and YouTube both use red) or messaging (e.g., a focus on features instead of price). These are the most valuable insights to help you better position yourself.
Step 5: Articulate Your Own Identity
Create a record of the same components for your current brand. If you’re a recently established company, you may not have all the details yet, but that’s fine. This method will assist you in determining how and where you need to grow.
In addition, when developing your brand, it’s important to keep balance between:
- Copying the strategies of brands you aim to compete with, such as competing based on value.
- One way to differentiate yourself from brands you do not want to compete with is by avoiding their strategies, such as competing solely on price.
The task is to stay true to your genuine self while still being unique and innovative.
Step 6: Identify Your Niche
Create a Cartesian chart on a whiteboard to determine your position in the marketplace. This will help you understand where you stand in relation to other brands. Having a general idea of each brand’s attributes will assist in this exercise. The chart will provide a visual representation of where you lie on the spectrum.
Do several variations, plotting your competitors based on different polarities, such as:
- Low-cost vs. high cost
- Low-quality vs. high quality
- Traditional vs. contemporary
- People-focused vs. automated/scalable
- Niche vs. comprehensive
At the completion of this exercise, you will have a better understanding of your competition and your own strengths. You will also be able to answer the important question of why a customer should choose your products or services over those of the competition.
Build Your Brand Strategy to Help You Win
After conducting a thorough competitive analysis, you can enhance or establish a brand strategy that will assist you in effectively communicating your identity, purpose, and significance. This will enable you to establish your position in the market. Our guide to crafting a brand strategy, which comes bundled with a free brand toolkit, can be used as a starting point.