How to Do a Competitor Analysis: A Guide For Businesses

To grab a substantial market share, you need to identify your competitors and analyze their strengths and weaknesses. Knowing who your competitors are and their strategies can help you win in your industry in the long run.

This guide will take you through everything you need to conduct a competitive analysis in Nigeria to stay on top of the game.

What Is a Competitive Analysis – Definition and Objectives

Competitor analysis evaluates your competitor’s tactics, revenue, and strategies to reveal their strengths and weaknesses compared to yours. You need a set of objectives for a competitive analysis to win you a significant market share.

With competitor analysis, you can recognize the strongest competitors in your industry, discover their strategies and predict their actions and react accordingly. This way, you can get a competitive advantage and further expand your business.

Why Competitor Analysis is Important

Competitor analysis is one of the most important strategic aspects of your business, as it helps you navigate in the market and make more informed decisions.

Let’s see in details below:

• It helps you understand your competition: A competitor analysis helps you understand the approach your competition uses to gain market share.

• It can help you identify your weaknesses: You might not realize your weaknesses and areas where you can improve until you compare your performance with your competitors.

• It can help you uncover unique strategies to convert your target audience: When you look at the performance of your competition, you can discover areas in your lead generation that you might have overlooked in the past but can fetch you substantial revenue.

• You can create an unbeatable unique value proposition: When you do a competitive analysis, you will likely emerge with a better offer that your target audience might find irresistible.

Knowing how to do a competitive analysis for your business will help you move closer to knocking out your competition and rising to the top of your industry.

How Do You Identify Your Competitors

An essential part of competitor analysis is identifying the strengths and weaknesses of your competitors. Investigate their strengths and weaknesses and document your findings.

There are two key types of competitors that you should regularly be tracking: direct and indirect competitors.

Check them below:

• Direct Competitors: Direct competitors offer the same or similar offerings as your own business. These competitors should be your highest priority because they pose the most immediate threat to your business.

• Indirect Competitors: Indirect competitors are other businesses that offer a different type of product or service than your business but still serve the same consumer base. While they do not immediately threaten your business, you should monitor them.

Start by defining those competitors and examining their websites, products and services. If needed, you may also conduct research, so you can better understand  their market share and positioning.

To achieve this, you may use market research and analysis services to gain valuable data that you can use to gain insights about different aspects of their businesses.

You can use a spreadsheet for your documentation. Ideally, you should identify at least 6-7 competitors in your industry. This will help you gain insights into the areas you may have overlooked in marketing to your target audience.

Understanding Your Competitors’ Strategies

Analyzing competitors also involves understanding their products, services, and pricing strategies. While you may offer similar offerings, you must also investigate their unique approach to providing an industry-wide product or service.

For example, your product can be a CRM tool, but while you may offer native integration with email clients like Gmail or Outlook, your competitors’ systems may offer connections with other similar products.

Beyond this, their pricing strategies are also important to research and document. Pricing is the amount of money you charge for your product or service. Use your competitors’ pricing strategy to guide your own.

This will guide you to set a price range at par with industry standards. You might want to consider factors such as your pricing model, tiers, options and discounts.

Analyzing Your Competitors’ Marketing and Advertising Strategies

Your competitors communicate with your target audience differently and appear on different frequent platforms, but you will only know this by analyzing their marketing and advertising strategies.

Here are a few tips to help you out with this step:

• Check out their messaging: Brand messaging is integral to your marketing and advertising strategies. You can stand out in a crowded marketplace with clear and unique messaging.

• Study their branding: Branding is building a clear-cut personality for your business in the minds of your target audience and the wider public. Essentially, branding comprises your company’s name and logo, visual identity design, mission, values, and tone of voice.

• Research their marketing channels: Your competitors’ communication channels may influence your strategies. This is because you want to capture a significant market share and cannot afford to neglect a channel that can help you connect easily with your target audience.

Analyzing your competitors’ strategies can help you carve a unique personality for your brand and remain memorable to your target audience. You can then use this newfound information to evaluate your channels and adjust accordingly.

Examining Your Competitors’ Online Presence

A competitive analysis is incomplete without online presence evaluation. You can start by evaluating their website strategy, social media presence and also measure their SEO performance.

Below, we will review each one in detail, so you can get the most out of every strategy.

Website Analysis

Start by checking your competitors’ websites. The success of your ecommerce business in Nigeria can be significantly impacted by a website that is well-designed and user-friendly.

Look for the following through the process:

• Call-to-action buttons: It is important that you assess the effectiveness of each call to action and adjust yours accordingly.

• Landing page designs: Landing page design is the process of crafting an attractive site page for your target audience and website visitors. A good landing page design should influence them to convert from leads into subscribers or customers. On your competitors’ websites, examine their landing pages and how compelling they are.

• User navigation: You should not forget to evaluate how easy and intuitive navigation is on their site. Document your findings to improve your website design  for your users and target audience.

Also, don’t forget about the user experience. Evaluate it according to a benchmark of quality to determine the overall user experience.

Presence on Social Media

If you want to evaluate the social media presence of your competitors, investigate their follower base, engagement rate and content strategy. You should also find out the platforms they use the most and how they present their branding on each platform.

Answer the following questions for each competitor in your research:

• How many followers do they have altogether and across the different platforms?
• What type of content do they publish often?
• What kind of influencers do they work with?
• What are the reviews from customers on the platforms?

Document your answers for future reference.

SEO Performance

Search engine optimization (SEO) should also be your priority during your research. You may use tools such as SEMRush, Ahrefs or similar to access the SEO performance of your target competitors.

You’ll want to check the following for each competitor:

• Number of ranked keywords and their average positions in the SERPs;
• Content quality of their blog and landing pages;
• Overall domain authority and backlinks profile.

Once again, you must document your findings to enable you to compare your performance to theirs and improve in necessary areas.

Conducting a Comparison SWOT Analysis

A SWOT analysis is a competitive framework used to identify your company’s Strengths, Weaknesses, Opportunities, and Threats. SWOT spotlights your competitors’ strengths and compares them to your business.

Conducting a SWOT analysis of your competitors to integrate everything you’ve discovered into a concise report.

In your SWOT analysis, you can explore the following:

• What strengths and weaknesses can you see in competitors?

• What are the opportunities you can see for your business to capitalize on?

• What is your competition doing that might pose a threat to your business?

Strengths and weaknesses are aspects of your business that you control and change over time.

They include:

• Product offering;
• Partnerships;
• Intellectual property;
• Number of employees;
• Market share;
• Assets;
• Insufficient Customer service;
• Systems, tools, and processes.

Opportunities and threats fall outside your control. You can plan for changes but can’t influence these elements.

They are the following ones:

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

Consider running a SWOT analysis annually. It helps you stay on top of market trends and can fetch investor funding when included in your business strategy.

How to Gather and Analyze Competitors’ Data

Competitor analysis tools will help you easily track, analyze, and learn from your competitors’ strategies. Many tools are available, but you need the perfect tool to get ahead. 

You may use the below tools for gathering and analyzing competitor data:

• Google Alerts: Google Alerts is one of the best tools you can find for competitive analysis. It enables you to receive real-time notifications whenever your competitors are mentioned online. This way, you can adjust your strategy based on your evaluation by identifying such new opportunities.

• SEMrush: A powerful competitor search tool, SEMrush, offers critical insights for competitive analysis. It lets you gather data on your competitors’ organic and paid search strategies, keyword rankings, backlinks, and more.

• SimilarWeb: SimilarWeb is one of the most effective tools for evaluating a competitor’s online presence. It provides data on website traffic, top referral sources, audience demographics, and more. SimilarWeb allows businesses to grow through valuable insights into their competitors’ marketing strategies.

• SpyFu: With SpyFu, you can uncover your competitors’ best-performing keywords, ad campaigns, and organic search rankings that can prove invaluable to your future online marketing strategies.

• Ahrefs: Ahrefs offers a range of tools for competitive analysis, keyword research, backlink research, rank tracking, and more to help you search traffic, research your competitors, and monitor your industry.

• Rank Signals: You can discover your competitors’ SEO backlinks and traffic sources with Rank Signals. When you enter their domain, Rank Signals will find your backlinks. This discovery can be helpful for you when implementing your backlink strategy.

Utilizing these tools enables you to assess your website’s performance in comparison to your competitors, pinpointing areas for enhancement and optimization. This data can be helpful in customizing your digital marketing strategy to effectively target similar audiences.

Creating an Action Plan to Follow

Your action plan is the next task you should embark on. The tools you need to access and leverage to their highest capacity is one thing, and setting yourself up to benefit the most from those tools is another.

Your action plan should follow this order:

• Draw up your emergency action list: You’ll need to develop a set of actions for the possibility of a future occurrence. This emergency plan should cover likely actions your competitor may take and other preemptive measures.

• Focus on a set of priorities: You might have a list of steps you’ve outlined and do not know where to start. If this is the case, a set of priorities can help you with this.

When developing your priorities list, make sure you arrange them by potential effects on business growth and relevance.

It is essential to carefully examine the existing information and create an action plan to guide your efforts. This way, you will not only be able to gain valuable insights, but also emerging marketing opportunities to support your business.

Ongoing Tracking and Monitoring

Beyond conducting a competitive analysis, you also need to do competitive monitoring. It focuses on the most important aspects of your ecommerce business, including competitors’ successful strategies and groundbreaking product feature launches. 

This is the process of identifying, evaluating, and monitoring the landscape of your competitors. This process involves continuously paying attention to vital metrics such as social media presence and activity, pricing changes, marketing campaigns, sales prospecting, and product launches and developments.

With it, you can understand the areas and methods through which your competitors outperform your brand, enabling you to take advantage and rise to the top.

Such monitoring also involves collecting data on market trends and other key aspects of your industry landscape. Businesses can then analyze this data to derive actionable insights and develop long-term strategies to gain a competitive advantage.