competitive and market analysis in business plan

• Credit cards
• View all credit cards
• Banking guide
• Loans guide
• Insurance guide
• Personal finance
• View all personal finance
• Small business
• Small business guide
• View all taxes

You’re our first priority. Every time.

We believe everyone should be able to make financial decisions with confidence. And while our site doesn’t feature every company or financial product available on the market, we’re proud that the guidance we offer, the information we provide and the tools we create are objective, independent, straightforward — and free.

So how do we make money? Our partners compensate us. This may influence which products we review and write about (and where those products appear on the site), but it in no way affects our recommendations or advice, which are grounded in thousands of hours of research. Our partners cannot pay us to guarantee favorable reviews of their products or services. Here is a list of our partners .

How to Write a Market Analysis for a Business Plan

Many or all of the products featured here are from our partners who compensate us. This influences which products we write about and where and how the product appears on a page. However, this does not influence our evaluations. Our opinions are our own. Here is a list of our partners and here's how we make money .

A lot of preparation goes into starting a business before you can open your doors to the public or launch your online store. One of your first steps should be to write a business plan . A business plan will serve as your roadmap when building your business.

Within your business plan, there’s an important section you should pay careful attention to: your market analysis. Your market analysis helps you understand your target market and how you can thrive within it.

Simply put, your market analysis shows that you’ve done your research. It also contributes to your marketing strategy by defining your target customer and researching their buying habits. Overall, a market analysis will yield invaluable data if you have limited knowledge about your market, the market has fierce competition, and if you require a business loan. In this guide, we'll explore how to conduct your own market analysis.

How to conduct a market analysis: A step-by-step guide

In your market analysis, you can expect to cover the following:

Industry outlook

Target market

Market value

Competition

Barriers to entry

Let’s dive into an in-depth look into each section:

Step 1: Define your objective

Before you begin your market analysis, it’s important to define your objective for writing a market analysis. Are you writing it for internal purposes or for external purposes?

If you were doing a market analysis for internal purposes, you might be brainstorming new products to launch or adjusting your marketing tactics. An example of an external purpose might be that you need a market analysis to get approved for a business loan .

The comprehensiveness of your market analysis will depend on your objective. If you’re preparing for a new product launch, you might focus more heavily on researching the competition. A market analysis for a loan approval would require heavy data and research into market size and growth, share potential, and pricing.

Step 2: Provide an industry outlook

An industry outlook is a general direction of where your industry is heading. Lenders want to know whether you’re targeting a growing industry or declining industry. For example, if you’re looking to sell VCRs in 2020, it’s unlikely that your business will succeed.

Starting your market analysis with an industry outlook offers a preliminary view of the market and what to expect in your market analysis. When writing this section, you'll want to include:

Market size

Are you chasing big markets or are you targeting very niche markets? If you’re targeting a niche market, are there enough customers to support your business and buy your product?

Product life cycle

If you develop a product, what will its life cycle look like? Lenders want an overview of how your product will come into fruition after it’s developed and launched. In this section, you can discuss your product’s:

Research and development

Projected growth

How do you see your company performing over time? Calculating your year-over-year growth will help you and lenders see how your business has grown thus far. Calculating your projected growth shows how your business will fare in future projected market conditions.

Step 3: Determine your target market

This section of your market analysis is dedicated to your potential customer. Who is your ideal target customer? How can you cater your product to serve them specifically?

Don’t make the mistake of wanting to sell your product to everybody. Your target customer should be specific. For example, if you’re selling mittens, you wouldn’t want to market to warmer climates like Hawaii. You should target customers who live in colder regions. The more nuanced your target market is, the more information you’ll have to inform your business and marketing strategy.

With that in mind, your target market section should include the following points:

Demographics

This is where you leave nothing to mystery about your ideal customer. You want to know every aspect of your customer so you can best serve them. Dedicate time to researching the following demographics:

Income level

Create a customer persona

Creating a customer persona can help you better understand your customer. It can be easier to market to a person than data on paper. You can give this persona a name, background, and job. Mold this persona into your target customer.

What are your customer’s pain points? How do these pain points influence how they buy products? What matters most to them? Why do they choose one brand over another?

Research and supporting material

Information without data are just claims. To add credibility to your market analysis, you need to include data. Some methods for collecting data include:

Target group surveys

Focus groups

Reading reviews

Feedback surveys

You can also consult resources online. For example, the U.S. Census Bureau can help you find demographics in calculating your market share. The U.S. Department of Commerce and the U.S. Small Business Administration also offer general data that can help you research your target industry.

Step 4: Calculate market value

You can use either top-down analysis or bottom-up analysis to calculate an estimate of your market value.

A top-down analysis tends to be the easier option of the two. It requires for you to calculate the entire market and then estimate how much of a share you expect your business to get. For example, let’s assume your target market consists of 100,000 people. If you’re optimistic and manage to get 1% of that market, you can expect to make 1,000 sales.

A bottom-up analysis is more data-driven and requires more research. You calculate the individual factors of your business and then estimate how high you can scale them to arrive at a projected market share. Some factors to consider when doing a bottom-up analysis include:

Where products are sold

Who your competition is

The price per unit

How many consumers you expect to reach

The average amount a customer would buy over time

While a bottom-up analysis requires more data than a top-down analysis, you can usually arrive at a more accurate calculation.

Step 5: Get to know your competition

Before you start a business, you need to research the level of competition within your market. Are there certain companies getting the lion’s share of the market? How can you position yourself to stand out from the competition?

There are two types of competitors that you should be aware of: direct competitors and indirect competitors.

Direct competitors are other businesses who sell the same product as you. If you and the company across town both sell apples, you are direct competitors.

An indirect competitor sells a different but similar product to yours. If that company across town sells oranges instead, they are an indirect competitor. Apples and oranges are different but they still target a similar market: people who eat fruits.

Also, here are some questions you want to answer when writing this section of your market analysis:

What are your competitor’s strengths?

What are your competitor’s weaknesses?

How can you cover your competitor’s weaknesses in your own business?

How can you solve the same problems better or differently than your competitors?

How can you leverage technology to better serve your customers?

How big of a threat are your competitors if you open your business?

Step 6: Identify your barriers

Writing a market analysis can help you identify some glaring barriers to starting your business. Researching these barriers will help you avoid any costly legal or business mistakes down the line. Some entry barriers to address in your marketing analysis include:

Technology: How rapid is technology advancing and can it render your product obsolete within the next five years?

Branding: You need to establish your brand identity to stand out in a saturated market.

Cost of entry: Startup costs, like renting a space and hiring employees, are expensive. Also, specialty equipment often comes with hefty price tags. (Consider researching equipment financing to help finance these purchases.)

Location: You need to secure a prime location if you’re opening a physical store.

Competition: A market with fierce competition can be a steep uphill battle (like attempting to go toe-to-toe with Apple or Amazon).

Step 7: Know the regulations

When starting a business, it’s your responsibility to research governmental and state business regulations within your market. Some regulations to keep in mind include (but aren’t limited to):

Employment and labor laws

Advertising

Environmental regulations

If you’re a newer entrepreneur and this is your first business, this part can be daunting so you might want to consult with a business attorney. A legal professional will help you identify the legal requirements specific to your business. You can also check online legal help sites like LegalZoom or Rocket Lawyer.

Tips when writing your market analysis

We wouldn’t be surprised if you feel overwhelmed by the sheer volume of information needed in a market analysis. Keep in mind, though, this research is key to launching a successful business. You don’t want to cut corners, but here are a few tips to help you out when writing your market analysis:

Use visual aids

Nobody likes 30 pages of nothing but text. Using visual aids can break up those text blocks, making your market analysis more visually appealing. When discussing statistics and metrics, charts and graphs will help you better communicate your data.

Include a summary

If you’ve ever read an article from an academic journal, you’ll notice that writers include an abstract that offers the reader a preview.

Use this same tactic when writing your market analysis. It will prime the reader of your market highlights before they dive into the hard data.

Get to the point

It’s better to keep your market analysis concise than to stuff it with fluff and repetition. You’ll want to present your data, analyze it, and then tie it back into how your business can thrive within your target market.

Revisit your market analysis regularly

Markets are always changing and it's important that your business changes with your target market. Revisiting your market analysis ensures that your business operations align with changing market conditions. The best businesses are the ones that can adapt.

Why should you write a market analysis?

Your market analysis helps you look at factors within your market to determine if it’s a good fit for your business model. A market analysis will help you:

1. Learn how to analyze the market need

Markets are always shifting and it’s a good idea to identify current and projected market conditions. These trends will help you understand the size of your market and whether there are paying customers waiting for you. Doing a market analysis helps you confirm that your target market is a lucrative market.

2. Learn about your customers

The best way to serve your customer is to understand them. A market analysis will examine your customer’s buying habits, pain points, and desires. This information will aid you in developing a business that addresses those points.

3. Get approved for a business loan

Starting a business, especially if it’s your first one, requires startup funding. A good first step is to apply for a business loan with your bank or other financial institution.

A thorough market analysis shows that you’re professional, prepared, and worth the investment from lenders. This preparation inspires confidence within the lender that you can build a business and repay the loan.

4. Beat the competition

Your research will offer valuable insight and certain advantages that the competition might not have. For example, thoroughly understanding your customer’s pain points and desires will help you develop a superior product or service than your competitors. If your business is already up and running, an updated market analysis can upgrade your marketing strategy or help you launch a new product.

Final thoughts

There is a saying that the first step to cutting down a tree is to sharpen an axe. In other words, preparation is the key to success. In business, preparation increases the chances that your business will succeed, even in a competitive market.

The market analysis section of your business plan separates the entrepreneurs who have done their homework from those who haven’t. Now that you’ve learned how to write a market analysis, it’s time for you to sharpen your axe and grow a successful business. And keep in mind, if you need help crafting your business plan, you can always turn to business plan software or a free template to help you stay organized.

This article originally appeared on JustBusiness, a subsidiary of NerdWallet.

On a similar note...

.css-s5s6ko{margin-right:42px;color:#F5F4F3;}@media (max-width: 1120px){.css-s5s6ko{margin-right:12px;}} AI that works. Coming June 5, Asana redefines work management—again. .css-1ixh9fn{display:inline-block;}@media (max-width: 480px){.css-1ixh9fn{display:block;margin-top:12px;}} .css-1uaoevr-heading-6{font-size:14px;line-height:24px;font-weight:500;-webkit-text-decoration:underline;text-decoration:underline;color:#F5F4F3;}.css-1uaoevr-heading-6:hover{color:#F5F4F3;} .css-ora5nu-heading-6{display:-webkit-box;display:-webkit-flex;display:-ms-flexbox;display:flex;-webkit-align-items:center;-webkit-box-align:center;-ms-flex-align:center;align-items:center;-webkit-box-pack:start;-ms-flex-pack:start;-webkit-justify-content:flex-start;justify-content:flex-start;color:#0D0E10;-webkit-transition:all 0.3s;transition:all 0.3s;position:relative;font-size:16px;line-height:28px;padding:0;font-size:14px;line-height:24px;font-weight:500;-webkit-text-decoration:underline;text-decoration:underline;color:#F5F4F3;}.css-ora5nu-heading-6:hover{border-bottom:0;color:#CD4848;}.css-ora5nu-heading-6:hover path{fill:#CD4848;}.css-ora5nu-heading-6:hover div{border-color:#CD4848;}.css-ora5nu-heading-6:hover div:before{border-left-color:#CD4848;}.css-ora5nu-heading-6:active{border-bottom:0;background-color:#EBE8E8;color:#0D0E10;}.css-ora5nu-heading-6:active path{fill:#0D0E10;}.css-ora5nu-heading-6:active div{border-color:#0D0E10;}.css-ora5nu-heading-6:active div:before{border-left-color:#0D0E10;}.css-ora5nu-heading-6:hover{color:#F5F4F3;} Get early access .css-1k6cidy{width:11px;height:11px;margin-left:8px;}.css-1k6cidy path{fill:currentColor;}

• Product overview
• All features
• App integrations

CAPABILITIES

• project icon Project management
• Project views
• Custom fields
• Status updates
• goal icon Goals and reporting
• Reporting dashboards
• workflow icon Workflows and automation
• portfolio icon Resource management
• Time tracking
• my-task icon Admin and security
• Admin console
• asana-intelligence icon Asana Intelligence
• list icon Personal
• premium icon Starter
• briefcase icon Advanced
• Goal management
• Organizational planning
• Campaign management
• Creative production
• Marketing strategic planning
• Request tracking
• Resource planning
• Project intake
• View all uses arrow-right icon
• Project plans
• Team goals & objectives
• Team continuity
• Meeting agenda
• View all templates arrow-right icon
• Work management resources Discover best practices, watch webinars, get insights
• What's new Learn about the latest and greatest from Asana
• Customer stories See how the world's best organizations drive work innovation with Asana
• Help Center Get lots of tips, tricks, and advice to get the most from Asana
• Asana Academy Sign up for interactive courses and webinars to learn Asana
• Developers Learn more about building apps on the Asana platform
• Community programs Connect with and learn from Asana customers around the world
• Events Find out about upcoming events near you
• Partners Learn more about our partner programs
• Support Need help? Contact the Asana support team
• Asana for nonprofits Get more information on our nonprofit discount program, and apply.

Featured Reads

• Project planning |
• How to create a competitive analysis (w ...

How to create a competitive analysis (with examples)

Competitive analysis involves identifying your direct and indirect competitors using research to reveal their strengths and weaknesses in relation to your own. In this guide, we’ll outline how to do a competitive analysis and explain how you can use this marketing strategy to improve your business.

Whether you’re running a business or playing in a football game, understanding your competition is crucial for success. While you may not be scoring touchdowns in the office, your goal is to score business deals with clients or win customers with your products. The method of preparation for athletes and business owners is similar—once you understand your strengths and weaknesses versus your competitors’, you can level up. 

What is a competitive analysis?

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. After identifying your competitors, you can use the information you gather to see where you stand in the market landscape. 

What to include in a competitive analysis

The purpose of this type of analysis is to get a competitive advantage in the market and improve your business strategy. Without a competitive analysis, it’s difficult to know what others are doing to win clients or customers in your target market. A competitive analysis report may include:

A description of your company’s target market

Details about your product or service versus the competitors’

Current and projected market share, sales, and revenues

Pricing comparison

Marketing and social media strategy analysis

Differences in customer ratings

You’ll compare each detail of your product or service versus the competition to assess strategy efficacy. By comparing success metrics across companies, you can make data-driven decisions.

How to do a competitive analysis

Follow these five steps to create your competitive analysis report and get a broad view of where you fit in the market. This process can help you analyze a handful of competitors at one time and better approach your target customers.

1. Create a competitor overview

In step one, select between five and 10 competitors to compare against your company. The competitors you choose should have similar product or service offerings and a similar business model to you. You should also choose a mix of both direct and indirect competitors so you can see how new markets might affect your company. Choosing both startup and seasoned competitors will further diversify your analysis.

Tip: To find competitors in your industry, use Google or Amazon to search for your product or service. The top results that emerge are likely your competitors. If you’re a startup or you serve a niche market, you may need to dive deeper into the rankings to find your direct competitors.

2. Conduct market research

Once you know the competitors you want to analyze, you’ll begin in-depth market research. This will be a mixture of primary and secondary research. Primary research comes directly from customers or the product itself, while secondary research is information that’s already compiled. Then, keep track of the data you collect in a user research template .

Primary market research may include: 

Purchasing competitors’ products or services

Interviewing customers

Conducting online surveys of customers 

Holding in-person focus groups

Secondary market research may include:

Examining competitors’ websites

Assessing the current economic situation

Identifying technological developments 

Reading company records

Tip: Search engine analysis tools like Ahrefs and SEMrush can help you examine competitors’ websites and obtain crucial SEO information such as the keywords they’re targeting, the number of backlinks they have, and the overall health of their website. 

3. Compare product features

The next step in your analysis involves a comparison of your product to your competitors’ products. This comparison should break down the products feature by feature. While every product has its own unique features, most products will likely include:

Service offered

Age of audience served

Number of features

Style and design

Ease of use

Type and number of warranties

Customer support offered

Product quality

Tip: If your features table gets too long, abbreviate this step by listing the features you believe are of most importance to your analysis. Important features may include cost, product benefits, and ease of use.

4. Compare product marketing

The next step in your analysis will look similar to the one before, except you’ll compare the marketing efforts of your competitors instead of the product features. Unlike the product features matrix you created, you’ll need to go deeper to unveil each company’s marketing plan . 

Areas you’ll want to analyze include:

Social media

Website copy

Press releases

Product copy

As you analyze the above, ask questions to dig deeper into each company’s marketing strategies. The questions you should ask will vary by industry, but may include:

What story are they trying to tell?

What value do they bring to their customers?

What’s their company mission?

What’s their brand voice?

Tip: You can identify your competitors’ target demographic in this step by referencing their customer base, either from their website or from testimonials. This information can help you build customer personas. When you can picture who your competitor actively targets, you can better understand their marketing tactics. 

5. Use a SWOT analysis

Competitive intelligence will make up a significant part of your competitor analysis framework, but once you’ve gathered your information, you can turn the focus back to your company. A SWOT analysis helps you identify your company’s strengths and weaknesses. It also helps turn weaknesses into opportunities and assess threats you face based on your competition.

During a SWOT analysis, ask yourself:

What do we do well?

What could we improve?

Are there market gaps in our services?

What new market trends are on the horizon?

Tip: Your research from the previous steps in the competitive analysis will help you answer these questions and fill in your SWOT analysis. You can visually present your findings in a SWOT matrix, which is a four-box chart divided by category.

6. Identify your place in the market landscape

The last step in your competitive analysis is to understand where you stand in the market landscape. To do this, you’ll create a graph with an X and Y axis. The two axes should represent the most important factors for being competitive in your market. 

For example, the X-axis may represent customer satisfaction, while the Y-axis may represent presence in the market. You’ll then plot each competitor on the graph according to their (x,y) coordinates. You’ll also plot your company on this chart, which will give you an idea of where you stand in relation to your competitors. 

This graph is included for informational purposes and does not represent Asana’s market landscape or any specific industry’s market landscape. 

Tip: In this example, you’ll see three companies that have a greater market presence and greater customer satisfaction than yours, while two companies have a similar market presence but higher customer satisfaction. This data should jumpstart the problem-solving process because you now know which competitors are the biggest threats and you can see where you fall short. 

Competitive analysis example

Imagine you work at a marketing startup that provides SEO for dentists, which is a niche industry and only has a few competitors. You decide to conduct a market analysis for your business. To do so, you would:

Step 1: Use Google to compile a list of your competitors. 

Steps 2, 3, and 4: Use your competitors’ websites, as well as SEO analysis tools like Ahrefs, to deep-dive into the service offerings and marketing strategies of each company. 

Step 5: Focusing back on your own company, you conduct a SWOT analysis to assess your own strategic goals and get a visual of your strengths and weaknesses. 

Step 6: Finally, you create a graph of the market landscape and conclude that there are two companies beating your company in customer satisfaction and market presence. 

After compiling this information into a table like the one below, you consider a unique strategy. To beat out your competitors, you can use localization. Instead of marketing to dentists nationwide like your competitors are doing, you decide to focus your marketing strategy on one region, state, or city. Once you’ve become the known SEO company for dentists in that city, you’ll branch out. 

You won’t know what conclusions you can draw from your competitive analysis until you do the work and see the results. Whether you decide on a new pricing strategy, a way to level up your marketing, or a revamp of your product, understanding your competition can provide significant insight.

Drawbacks of competitive analysis

There are some drawbacks to competitive analysis you should consider before moving forward with your report. While these drawbacks are minor, understanding them can make you an even better manager or business owner. 

Don’t forget to take action

You don’t just want to gather the information from your competitive analysis—you also want to take action on that information. The data itself will only show you where you fit into the market landscape. The key to competitive analysis is using it to problem solve and improve your company’s strategic plan .

Be wary of confirmation bias

Confirmation bias means interpreting information based on the beliefs you already hold. This is bad because it can cause you to hold on to false beliefs. To avoid bias, you should rely on all the data available to back up your decisions. In the example above, the business owner may believe they’re the best in the SEO dental market at social media. Because of this belief, when they do market research for social media, they may only collect enough information to confirm their own bias—even if their competitors are statistically better at social media. However, if they were to rely on all the data available, they could eliminate this bias.

Update your analysis regularly

A competitive analysis report represents a snapshot of the market landscape as it currently stands. This report can help you gain enough information to make changes to your company, but you shouldn’t refer to the document again unless you update the information regularly. Market trends are always changing, and although it’s tedious to update your report, doing so will ensure you get accurate insight into your competitors at all times. 

Boost your marketing strategy with competitive analysis

Learning your competitors’ strengths and weaknesses will make you a better marketer. If you don’t know the competition you’re up against, you can’t beat them. Using competitive analysis can boost your marketing strategy and allow you to capture your target audience faster.

Competitive analysis must lead to action, which means following up on your findings with clear business goals and a strong business plan. Once you do your competitive analysis, you can use the templates below to put your plan into action.

Related resources

How to use a feasibility study in project management

How to track utilization rate and drive team profitability

How to accomplish big things with long-term goals

Smooth product launches are simpler than you think

• 400+ Sample Business Plans
• WHY UPMETRICS?

Customer Success Stories

Business Plan Course

Strategic Planning Templates

E-books, Guides & More

Entrepreneurs & Small Business

Accelerators & Incubators

Business Consultants & Advisors

Educators & Business Schools

Students & Scholars

AI Business Plan Generator

Financial Forecasting

AI Assistance

Ai Pitch Deck Generator

Strategic Planning

See How Upmetrics Works  →

• Sample Plans

Small Business Tools

How to Write Competitive Analysis in a Business Plan (w/ Examples)

Free Competitive Analysis Kit

• Vinay Kevadia
• January 9, 2024

14 Min Read

Every business wants to outperform its competitors, but do you know the right approach to gather information and analyze your competitors?

That’s where competitive analysis steps in. It’s the tool that helps you know your competition’s pricing strategies, strengths, product details, marketing strategies, target audience, and more.

If you want to know more about competitor analysis, this guide is all you need. It spills all the details on how to conduct and write a competitor analysis in a business plan, with examples.

Let’s get started and first understand the meaning of competitive analysis.

What is Competitive Analysis?

A competitive analysis involves collecting information about what other businesses in your industry are doing with their products, sales, and marketing.

Businesses use this data to find out what they are good at, where they can do better, and what opportunities they might have. It is like checking out the competition to see how and where you can improve.

This kind of analysis helps you get a clear picture of the market, allowing you to make smart decisions to make your business stand out and do well in the industry.

Competitive analysis is a section of utmost value for your business plan. The analysis in this section will form the basis upon which you will frame your marketing, sales, and product-related strategies. So make sure it’s thorough, insightful, and in line with your strategic objectives.

Let’s now understand how you can conduct a competitive analysis for your own business and leverage all its varied benefits.

How to Conduct a Competitive Analysis

Let’s break down the process of conducting a competitive analysis for your business plan in these easy-to-follow steps.

It will help you prepare a solid competitor analysis section in your business plan that actually highlights your strengths and opens room for better discussions (and funding).

Let’s begin.

1. Identify Your Direct and Indirect Competitors

First things first — identify all your business competitors and list them down. You can have a final, detailed list later, but right now an elementary list that mentions your primary competitors (the ones you know and are actively competing with) can suffice.

As you conduct more research, you can keep adding to it.

Explore your competitors using Google, social media platforms, or local markets. Then differentiate them into direct or indirect competitors.

Direct competitors

Businesses offering the same products or services, and targeting a similar target market are your direct competitors.

These competitors operate in the same industry and are often competing for the same market share.

Indirect competitors

On the other hand, indirect competitors are businesses that offer different products or services but cater to the same target customers as yours.

While they may not offer identical solutions, they compete for the same customer budget or attention. Indirect competitors can pose a threat by providing alternatives that customers might consider instead of your offerings.

2. Study the Overall Market

Now that you know your business competitors, deep dive into market research. Market research should involve a combination of both primary and secondary research methods.

Primary research

Primary research involves collecting market information directly from the source or subjects.  Some examples of primary market research methods include:

• Purchasing competitors’ products or services
• Conducting interviews with their customers
• Administering online surveys to gather customer insights

Secondary research

Secondary research involves utilizing pre-existing gathered information from some relevant sources. Some of its examples include:

• Scrutinizing competitors’ websites
• Assessing the current economic landscape
• Referring to online market databases of the competitors.

Have a good understanding of the market at this point to write your market analysis section effectively.

3. Prepare a Competitive Framework

Now that you have a thorough understanding of your competitors’ market, it is time to create a competitive framework that enables comparison between two businesses.

Factors like market share, product offering, pricing, distribution channel, target markets, marketing strategies, and customer service offer essential metrics and information to chart your competitive framework.

These factors will form the basis of comparison for your competitive analysis. Depending on the type of your business, choose the factors that are relevant to you.

4. Take Note of Your Competitor’s Strategies

Now that you have an established framework, use that as a base to analyze your competitor’s strategies. Such analysis will help you understand what the customers like and dislike about your competitors.

Start by analyzing the marketing strategies, sales and marketing channels, promotional activities, and branding strategies of your competitors. Understand how they position themselves in the market and what USPs they emphasize.

Evaluate, analyze their pricing strategies and keep an eye on their distribution channel to understand your competitor’s business model in detail.

This information allows you to make informed decisions about your strategies, helping you identify opportunities for differentiation and improvement.

5. Perform a SWOT Analysis of Your Competitors

A SWOT analysis is a method of analyzing the strengths, weaknesses, opportunities, and threats of your business in the competitive marketplace.

While strengths and weaknesses focus on internal aspects of your company, opportunities and threats examine the external factors related to the industry and market.

It’s an important tool that will help determine the company’s competitive edge quite efficiently.

It includes the positive features of your internal business operations. For example, a strong brand, skilled workforce, innovative products/services, or a loyal customer base.

It includes all the hindrances of your internal business operations. For example, limited resources, outdated technology, weak brand recognition, or inefficient processes.

Opportunities

It outlines several opportunities that will come your way in the near or far future. Opportunities can arise as the industry or market trend changes or by leveraging the weaknesses of your competitors.

For example, details about emerging markets, technological advancements, changing consumer trends, profitable partnerships in the future, etc.

Threats define any external factor that poses a challenge or any risk for your business in this section. For example, intense competition, economic downturns, regulatory changes, or any advanced technology disruption.

This section will form the basis for your business strategies and product offerings. So make sure it’s detailed and offers the right representation of your business.

And that is all you need to create a comprehensive competitive analysis for your business plan.

Want to Perform Competitive Analysis for your Business?

Discover your competition’s secrets effortlessly with our user-friendly and Free Competitor Analysis Generator!

How to Write Competitive Analysis in a Business Plan

The section on competitor analysis is the most crucial part of your business plan. Making this section informative and engaging gets easier when you have all the essential data to form this section.

Now, let’s learn an effective way of writing your competitive analysis.

1. Determine who your readers are

Know your audience first, because that will change the whole context of your competitor analysis business plan.

The competitive analysis section will vary depending on the intended audience is the team or investors.

Consider the following things about your audience before you start writing this section:

Internal competitor plan (employees or partners)

Objective: The internal competitor plan is to provide your team with an understanding of the competitive landscape.

Focus: The focus should be on the comparison of the strengths and weaknesses of competitors to boost strategic discussions within your team.

Use: It is to leverage the above information to develop strategies that highlight your strengths and address your weaknesses.

Competitor plan for funding (bank or investors)

Objective: Here, the objective is to reassure the potential and viability of your business to investors or lenders.

Focus: This section should focus on awareness and deep understanding of the competitive landscape to persuade the readers about the future of your business.

Use: It is to showcase your market position and the opportunities that are on the way to your business.

This differentiation is solely to ensure that the competitive analysis serves its purpose effectively based on the specific needs and expectations of the respective audience.

2. Describe and Visualise Competitive Advantage

Remember how we determined our competitive advantage at the time of research. It is now time to present that advantage in your competitive analysis.

Highlight your edge over other market players in terms of innovation, product quality, features, pricing, or marketing strategy. Understanding your products’ competitive advantage will also help you write the products and services section effectively.

However, don’t limit the edge to your service and market segment. Highlight every area where you excel even if it is better customer service or enhanced brand reputation.

Now, you can explain your analysis through textual blocks. However, a more effective method would be using a positioning map or competitive matrix to offer a visual representation of your company’s competitive advantage.

3. Explain your strategies

Your competitor analysis section should not only highlight the opportunities or threats of your business. It should also mention the strategies you will implement to overcome those threats or capitalize on the opportunities.

Such strategies may include crafting top-notch quality for your products or services, exploring the unexplored market segment, or having creative marketing strategies.

Elaborate on these strategies later in their respective business plan sections.

4. Know the pricing strategy

To understand the pricing strategy of your competitors, there are various aspects you need to have information about. It involves knowing their pricing model, evaluating their price points, and considering the additional costs, if any.

One way to understand this in a better way is to compare features and value offered at different price points and identify the gaps in competitors’ offerings.

Once you know the pricing structure of your competitors, compare it with yours and get to know the competitive advantage of your business from a pricing point of view.

Let us now get a more practical insight by checking an example of competitive analysis.

Competitive Analysis Example in a Business Plan

Here’s a business plan example highlighting the barber shop’s competitive analysis.

1. List of competitors

Direct & indirect competitors.

The following retailers are located within a 5-mile radius of J&S, thus providing either direct or indirect competition for customers:

Joe’s Beauty Salon

Joe’s Beauty Salon is the town’s most popular beauty salon and has been in business for 32 years. Joe’s offers a wide array of services that you would expect from a beauty salon.

Besides offering haircuts, Joe’s also offers nail services such as manicures and pedicures. In fact, over 60% of Joe’s revenue comes from services targeted at women outside of hair services. In addition, Joe’s does not offer its customers premium salon products.

For example, they only offer 2 types of regular hair gels and 4 types of shampoos. This puts Joe’s in direct competition with the local pharmacy and grocery stores that also carry these mainstream products. J&S, on the other hand, offers numerous options for exclusive products that are not yet available in West Palm Beach, Florida.

LUX CUTS has been in business for 5 years. LUX CUTS offers an extremely high-end hair service, with introductory prices of $120 per haircut.

However, LUX CUTS will primarily be targeting a different customer segment from J&S, focusing on households with an income in the top 10% of the city.

Furthermore, J&S offers many of the services and products that LUX CUTS offers, but at a fraction of the price, such as:

• Hairstyle suggestions & hair care consultation
• Hair extensions & coloring
• Premium hair products from industry leaders

Freddie’s Fast Hair Salon

Freddie’s Fast Hair Salon is located four stores down the road from J&S. Freddy’s has been in business for the past 3 years and enjoys great success, primarily due to its prime location.

Freddy’s business offers inexpensive haircuts and focuses on volume over quality. It also has a large customer base comprised of children between the ages of 5 to 13.

J&S has several advantages over Freddy’s Fast Hair Salon including:

• An entertainment-focused waiting room, with TVs and board games to make the wait for service more pleasurable. Especially great for parents who bring their children.
• A focus on service quality rather than speed alone to ensure repeat visits. J&S will spend on average 20 more minutes with its clients than Freddy’s.

While we expect that Freddy’s Fast Hair Salon will continue to thrive based on its location and customer relationships, we expect that more and more customers will frequent J&S based on the high-quality service it provides.

2. Competitive Pricing

John and Sons Barbing Salon will work towards ensuring that all our services are offered at highly competitive prices compared to what is obtainable in The United States of America.

We know the importance of gaining entrance into the market by lowering our pricing to attract all and sundry that is why we have consulted with experts and they have given us the best insights on how to do this and effectively gain more clients soon.

Our pricing system is going to be based on what is obtainable in the industry, we don’t intend to charge more (except for premium and customized services) and we don’t intend to charge less than our competitors are offering in West Palm Beach – Florida.

3. Our pricing

• Payment by cash
• Payment via Point of Sale (POS) Machine
• Payment via online bank transfer (online payment portal)
• Payment via Mobile money
• Check (only from loyal customers)

Given the above, we have chosen banking platforms that will help us achieve our payment plans without any itches.

4. Competitive advantage

5. SWOT analysis

Why is a Competitive Environment helpful?

Somewhere we all think, “What if we had no competition?” “What if we were the monopoly?” It would be great, right? Well, this is not the reality, and have to accept the competition sooner or later.

However, competition is healthy for businesses to thrive and survive, let’s see how:

1. Competition validates your idea

When people are developing similar products like you, it is a sign that you are on the right path. Having healthy competition proves that your idea is valid and there is a potential target market for your product and service offerings.

2. Innovation and Efficiency

Businesses competing with each other are motivated to innovate consistently, thereby, increasing their scope and market of product offerings. Moreover, when you are operating in a cutthroat environment, you simply cannot afford to be inefficient.

Be it in terms of costs, production, pricing, or marketing—you will ensure efficiency in all aspects to attract more business.

3. Market Responsiveness

Companies in a competitive environment tend to stay relevant and longer in business since they are adaptive to the changing environment. In the absence of competition, you would start getting redundant which will throw you out of the market, sooner or later.

4. Eases Consumer Education

Since your target market is already aware of the problem and existing market solutions, it would be much easier to introduce your business to them. Rather than focusing on educating, you would be more focused on branding and positioning your brand as an ideal customer solution.

Being the first one in the market is exciting. However, having healthy competition has these proven advantages which are hard to ignore.

A way forward

Whether you are starting a new business or have an already established unit, having a practical and realistic understanding of your competitive landscape is essential to developing efficient business strategies.

While getting to know your competition is essential, don’t get too hung up in the research. Research your competitors to improve your business plan and strategies, not to copy their ideas.

Create your unique strategies, offer the best possible services, and add value to your offerings—that will make you stand out.

While it’s a long, tough road, a comprehensive business plan can be your guide. Using modern business planning software is probably the easiest way to draft your plan.

Use Upmetrics. Simply enter your business details, answer the strategic questions, and see your business plan come together in front of your eyes.

Build your Business Plan Faster

with step-by-step Guidance & AI Assistance.

Frequently Asked Questions

Is swot analysis a competitive analysis.

SWOT analysis is just a component of a competitive analysis and not the whole competitive analysis. It helps you identify the strengths and weaknesses of your business and determine the emerging opportunities and threats faced by the external environment.

Competitive analysis in reality is a broad spectrum topic wherein you identify your competitors, analyze them on different metrics, and identify your competitive advantage to form competitive business strategies.

What tools can i use for competitor analysis?

For a thorough competitor analysis, you will require a range of tools that can help in collecting, analyzing, and presenting data. While SEMrush, Google Alerts, Google Trends, and Ahrefs can help in collecting adequate competitor data, Business planning tools like Upmetrics can help in writing the competitors section of your business plan quite efficiently.

What are the 5 parts of a competitive analysis?

The main five components to keep in mind while having a competitor analysis are:

• Identifying the competitors
• Analyzing competitor’s strengths and weaknesses
• Assessing market share and trends
• Examining competitors’ strategies and market positioning
• Performing SWOT analysis

What is the difference between market analysis and competitive analysis?

Market analysis involves a comprehensive examination of the overall market dynamics, industry trends, and factors influencing a business’s operating environment.

On the other hand, competitive analysis narrows the focus to specific competitors within the market, delving into their strategies, strengths, weaknesses, and market positioning.

About the Author

Vinay Kevadiya

Vinay Kevadiya is the founder and CEO of Upmetrics, the #1 business planning software. His ultimate goal with Upmetrics is to revolutionize how entrepreneurs create, manage, and execute their business plans. He enjoys sharing his insights on business planning and other relevant topics through his articles and blog posts. Read more

Related Articles

How to Write a Customer Analysis Section for Your Business Plan

What is SWOT Analysis & How to Conduct it

How to Conduct a PESTLE Analysis Explained with Example

Reach your goals with accurate planning.

No Risk – Cancel at Any Time – 15 Day Money Back Guarantee

Popular Templates

How to Write a Competitive Analysis for Your Business Plan

11 min. read

Updated January 3, 2024

Do you know who your competitors are? If you do, have you taken the time to conduct a thorough competitor analysis?

Knowing your competitors, how they operate, and the necessary benchmarks you need to hit are crucial to positioning your business for success. Investors will also want to see an analysis of the competition in your business plan.

In this guide, we’ll explore the significance of competitive analysis and guide you through the essential steps to conduct and write your own. 

You’ll learn how to identify and evaluate competitors to better understand the opportunities and threats to your business. And you’ll be given a four-step process to describe and visualize how your business fits within the competitive landscape.

• What is a competitive analysis?

A competitive analysis is the process of gathering information about your competitors and using it to identify their strengths and weaknesses. This information can then be used to develop strategies to improve your own business and gain a competitive advantage.

• How to conduct a competitive analysis

Before you start writing about the competition, you need to conduct your analysis. Here are the steps you need to take:

1. Identify your competitors

The first step in conducting a comprehensive competitive analysis is to identify your competitors. 

Start by creating a list of both direct and indirect competitors within your industry or market segment. Direct competitors offer similar products or services, while indirect competitors solve the same problems your company does, but with different products or services.

Keep in mind that this list may change over time. It’s crucial to revisit it regularly to keep track of any new entrants or changes to your current competitors. For instance, a new competitor may enter the market, or an existing competitor may change their product offerings.

2. Analyze the market

Once you’ve identified your competitors, you need to study the overall market. 

This includes the market size , growth rate, trends, and customer preferences. Be sure that you understand the key drivers of demand, demographic and psychographic profiles of your target audience , and any potential market gaps or opportunities.

Conducting a market analysis can require a significant amount of research and data collection. Luckily, if you’re writing a business plan you’ll follow this process to complete the market analysis section . So, doing this research has value for multiple parts of your plan.

Brought to you by

Create a professional business plan

Using ai and step-by-step instructions.

Secure funding

Validate ideas

Build a strategy

3. Create a competitive framework

You’ll need to establish criteria for comparing your business with competitors. You want the metrics and information you choose to provide answers to specific questions. (“Do we have the same customers?” “What features are offered?” “How many customers are being served?”)

Here are some common factors to consider including: 

• Market share
• Product/service offerings or features
• Distribution channels
• Target markets
• Marketing strategies
• Customer service

4. Research your competitors

You can now begin gathering information about your competitors. Because you spent the time to explore the market and set up a comparison framework—your research will be far more focused and easier to complete.

There’s no perfect research process, so start by exploring sources such as competitor websites, social media, customer reviews, industry reports, press releases, and public financial statements. You may also want to conduct primary research by interviewing customers, suppliers, or industry experts.

You can check out our full guide on conducting market research for more specific steps.

5. Assess their strengths and weaknesses

Evaluate each competitor based on the criteria you’ve established in the competitive framework. Identify their key strengths (competitive advantages) and weaknesses (areas where they underperform).

6. Identify opportunities and threats

Based on the strengths and weaknesses of your competitors, identify opportunities (areas where you can outperform them) and threats (areas where they may outperform you) for your business. 

You can check out our full guide to conducting a SWOT analysis for more specific questions that you should ask as part of each step. 

• How to write your competitive analysis

Once you’ve done your research, it’s time to present your findings in your business plan. Here are the steps you need to take:

1. Determine who your audience is

Who you are writing a business plan for (investors, partners, employees, etc.) may require you to format your competitive analysis differently. 

For an internal business plan you’ll use with your team, the competition section should help them better understand the competition. You and your team will use it to look at comparative strengths and weaknesses to help you develop strategies to gain a competitive advantage.

For fundraising, your plan will be shared with potential investors or as part of a bank loan. In this case, you’re describing the competition to reassure your target reader. You are showing awareness and a firm understanding of the competition, and are positioned to take advantage of opportunities while avoiding the pitfalls.

2. Describe your competitive position

You need to know how your business stacks up, based on the values it offers to your chosen target market. To run this comparison, you’ll be using the same criteria from the competitive framework you completed earlier. You need to identify your competitive advantages and weaknesses, and any areas where you can improve.

The goal is positioning (setting your business up against the background of other offerings), and making that position clear to the target market. Here are a few questions to ask yourself in order to define your competitive position:

• How are you going to take advantage of your distinctive differences, in your customers’ eyes? 
• What are you doing better? 
• How do you work toward strengths and away from weaknesses?
• What do you want the world to think and say about you and how you compare to others?

3. Visualize your competitive position

There are a few different ways to present your competitive framework in your business plan. The first is a “positioning map” and the second is a “competitive matrix”. Depending on your needs, you can use one or both of these to communicate the information that you gathered during your competitive analysis:

Positioning map

The positioning map plots two product or business benefits across a horizontal and vertical axis. The furthest points of each represent opposite extremes (Hot and cold for example) that intersect in the middle. With this simple chart, you can drop your own business and the competition into the zone that best represents the combination of both factors.

I often refer to marketing expert Philip Kohler’s simple strategic positioning map of breakfast, shown here. You can easily draw your own map with any two factors of competition to see how a market stacks up.

It’s quite common to see the price on one axis and some important qualitative factor on the other, with the assumption that there should be a rough relationship between price and quality.

Competitive matrix

It’s pretty common for most business plans to also include a competitive matrix. It shows how different competitors stack up according to the factors identified in your competitive framework. 

How do you stack up against the others? Here’s what a typical competitive matrix looks like:

For the record, I’ve seen dozens of competitive matrices in plans and pitches. I’ve never seen a single one that didn’t show that this company does more of what the market wants than all others. So maybe that tells you something about credibility and how to increase it. Still, the ones I see are all in the context of seeking investment, so maybe that’s the nature of the game.

4. Explain your strategies for gaining a competitive edge

Your business plan should also explain the strategies your business will use to capitalize on the opportunities you’ve identified while mitigating any threats from competition. This may involve improving your product/service offerings, targeting underserved market segments, offering more attractive price points, focusing on better customer service, or developing innovative marketing strategies.

While you should cover these strategies in the competition section, this information should be expanded on further in other areas of your business plan. 

For example, based on your competitive analysis you show that most competitors have the same feature set. As part of your strategy, you see a few obvious ways to better serve your target market with additional product features. This information should be referenced within your products and services section to back up your problem and solution statement. 

• Why competition is a good thing

Business owners often wish that they had no competition. They think that with no competition, the entire market for their product or service will be theirs. That is simply not the case—especially for new startups that have truly innovative products and services. Here’s why:

Competition validates your idea

You know you have a good idea when other people are coming up with similar products or services. Competition validates the market and the fact that there are most likely customers for your new product. This also means that the costs of marketing and educating your market go down (see my next point).

Competition helps educate your target market

Being first-to-market can be a huge advantage. It also means that you will have to spend way more than the next player to educate customers about your new widget, your new solution to a problem, and your new approach to services. 

This is especially true for businesses that are extremely innovative. These first-to-market businesses will be facing customers that didn’t know that there was a solution to their problem . These potential customers might not even know that they have a problem that can be solved in a better way. 

If you’re a first-to-market company, you will have an uphill battle to educate consumers—an often expensive and time-consuming process. The 2nd-to-market will enjoy all the benefits of an educated marketplace without the large marketing expense.

Competition pushes you

Businesses that have little or no competition become stagnant. Customers have few alternatives to choose from, so there is no incentive to innovate. Constant competition ensures that your marketplace continues to evolve and that your product offering continues to evolve with it.

Competition forces focus & differentiation

Without competition, it’s easy to lose focus on your core business and your core customers and start expanding into areas that don’t serve your best customers. Competition forces you and your business to figure out how to be different than your competition while focusing on your customers. In the long term, competition will help you build a better business.

• What if there is no competition?

One mistake many new businesses make is thinking that just because nobody else is doing exactly what they’re doing, their business is a sure thing. If you’re struggling to find competitors, ask yourself these questions.

Is there a good reason why no one else is doing it?

The smart thing to do is ask yourself,  “Why isn’t anyone else doing it?”

It’s possible that nobody’s selling cod-liver frozen yogurt in your area because there’s simply no market for it. Ask around, talk to people, and do your market research. If you determine that you’ve got customers out there, you’re in good shape.

But that still doesn’t mean there’s no competition.

How are customers getting their needs met?

There may not be another cod-liver frozen yogurt shop within 500 miles. But maybe an online distributor sells cod-liver oil to do-it-yourselfers who make their own fro-yo at home. Or maybe your potential customers are eating frozen salmon pops right now. 

Are there any businesses that are indirect competitors?

Don’t think of competition as only other businesses that do exactly what you do. Think about what currently exists on the market that your product would displace.

It’s the difference between direct competition and indirect competition. When Henry Ford started successfully mass-producing automobiles in the U.S., he didn’t have other automakers to compete with. His competition was horse-and-buggy makers, bicycles, and railroads.

Do a competitive analysis, but don’t let it derail your planning

While it’s important that you know the competition, don’t get too caught up in the research. 

If all you do is track your competition and do endless competitive analyses, you won’t be able to come up with original ideas. You will end up looking and acting just like your competition. Instead, make a habit of NOT visiting your competition’s website, NOT going into their store, and NOT calling their sales office. 

Focus instead on how you can provide the best service possible and spend your time talking to your customers. Figure out how you can better serve the next person that walks in the door so that they become a lifetime customer, a reference, or a referral source.

If you focus too much on the competition, you will become a copycat. When that happens, it won’t matter to a customer if they walk into your store or the competition’s because you will both be the same.

See why 1.2 million entrepreneurs have written their business plans with LivePlan

Tim Berry is the founder and chairman of Palo Alto Software , a co-founder of Borland International, and a recognized expert in business planning. He has an MBA from Stanford and degrees with honors from the University of Oregon and the University of Notre Dame. Today, Tim dedicates most of his time to blogging, teaching and evangelizing for business planning.

Table of Contents

• Don't let competition derail planning

Related Articles

3 Min. Read

What to Include in Your Business Plan Appendix

10 Min. Read

How to Write the Company Overview for a Business Plan

How to Set and Use Milestones in Your Business Plan

6 Min. Read

How to Write Your Business Plan Cover Page + Template

The Bplans Newsletter

The Bplans Weekly

Subscribe now for weekly advice and free downloadable resources to help start and grow your business.

We care about your privacy. See our privacy policy .

The quickest way to turn a business idea into a business plan

Fill-in-the-blanks and automatic financials make it easy.

No thanks, I prefer writing 40-page documents.

Discover the world’s #1 plan building software

Business growth

Business tips

A step-by-step guide to competitive market analysis

I remember Blockbuster going bankrupt in 2010. As a 12-year-old, this news meant the end of walking down aisles with my family, looking for the perfect weekend flick. But to Netflix, this meant their competitive market analysis had paid off.

As much as I miss my three-day VHS and DVD rentals, video entertainment has improved significantly, thanks to innovation and competitive pressure. Your industry isn't immune to change either, which is why it's so important to get ahead.

Table of contents:

What is a competitive analysis?

The importance of competitive analysis in marketing, how to conduct competitive market analysis in 6 steps, competitive analysis example, internal operations as a competitive advantage.

Competitive market analysis is the process of determining who your competitors are, researching their strategies, and unpacking what they do well (and not so well).

From this process, you can learn a lot about your company's own strengths and weaknesses, as well as how to remain a strong competitor in your industry.

A deep dive into your competitors' strategies will reveal their product offerings, mission statements , target markets, marketing strategies, and more. You may even identify new competitors you didn't know existed.

Identify and fill crucial gaps in your business  

The greats learn from the greats. Yes, you're trying to beat your competitors, but that doesn't mean you can't learn from them—especially if they've been around the block a few times. Seeing what works for your competitors will point toward gaps in your own strategies (as well as gaps in their strategies)—and ideally give you some inspiration on how to fill those gaps.

Spot trends and get ahead

Competitive market analysis isn't just about understanding specific competitors. It can also uncover the direction that an entire industry is moving. For example, Blockbuster didn't move with the industry, and we all know how that ended. Competitive analysis can help you avoid that same fate.

Recognize product value and pain point solutions

By analyzing competitors, you uncover customer pain points they might've missed, allowing you to refine your product's value and directly address those needs. It's not just about watching rivals, but seizing opportunities to stand out.

Set future objectives for growth

By examining market leaders, you define bold markers for your growth, and you can emulate their tactics. You can also employ AI-driven tools like Google Analytics' predictive metrics, HubSpot's forecasting tools, or IBM Watson's analytics. These tools can decipher market patterns, anticipate future prospects, and help you set precise KPIs. With AI's assistance, you can unearth data-driven insights and opportunities even top-tier competitors might miss.

Competitive market analysis isn't just a matter of making sure you have a unique selling point. Here's how to dig into the competition and figure out where you stand—and how to stand out.

1. List your competitors

Start by creating a comprehensive list of everyone operating in your industry. You can weed out the less relevant competitors later, but for now, jot down anyone that offers similar products or services.

If you're a small local business, your competitors are located nearby—you probably know a lot about them, but at the very least, you know they exist. But for something like an eCommerce store or online service, it's important to figure out who your competitors even are.

Start with basic keyword research. Google your product category a few different ways, maybe with words like "price," "cheap," or "sale" to reinforce the commercial nature of your query.

This will help you identify any competitors and can shed some light on how saturated your industry is.

Next, categorize the companies you identify into direct and indirect competitors.

Direct competitors provide similar products or services to a target market similar to yours. For example, Gucci and Prada both offer high-end clothing and accessories to fashion-conscious consumers with high disposable income.

Indirect competitors provide different products or services (though ones that land in the same category as yours) to a target market similar to yours. For example, gyms and companies producing at-home workout equipment can be considered indirect competitors.

As the name suggests, direct competitors tend to pose a more direct risk to your business. That said, indirect competitors can still attract customers and pull business away from you. You need to identify and analyze both to truly understand your competitive landscape.

2. Identify their target markets

Sometimes, a competitor's target market is clear—especially if it's a niche brand. Take Dick's Sporting Goods—it's pretty obvious that they're targeting people who are into sports (or who want to be).

For other companies, it isn't as obvious. To determine your competitors' target markets, try the following:

Study their mission statement: Sometimes, a company's mission statement will explicitly state who their products and/or services are designed for. And even when it isn't explicit, it will almost certainly provide a hint. Navigate to the "About" page on their website, and soak up whatever insight you can.

Analyze their voice and tone: Stoic or cheeky? Packed with jargon or written for the novice? Your competitors' tone and wording have a purpose—to get through to their target market. Read company blog posts, join their newsletters, and watch promotional video content, all the while paying close attention to who they seem to be speaking to.

Pay attention to their social media engagement: Observe who comments on their content and how they respond to those comments. The influencers they partner with can also shed light on the audience they want to reach.

3. Unpack their 4 P's

Competitive market analysis requires you to analyze your competitors' four P's of marketing : product, price, place, and promotion.

The best way to learn about your competitors' customer experiences is to become a customer yourself. You'll gain incredible insights into what's working for them—and more importantly, where there's room to offer something better.

Whenever possible, give your competitors' products a spin. Get a free trial or even buy or sign up for the real deal, if your budget allows. When using their products, try contacting their customer support for additional insight.

Pricing can be one of the most sensitive aspects of marketing. For this reason, you need to understand and track what your competition is doing with their pricing. Here are some questions to ask yourself about each competitor:

What's their pricing model? Subscription-style, one-time purchase, or a mix of both?

Do they seem to be using skim pricing or penetration pricing?

Does their pricing model seem to align with the rest of the industry?

There are many tools out there to help, as well as specialized tools for specific industries, like hotel room price monitoring.

Once you have a grip on your competitors' pricing strategies, here are your options:

Reduce your prices: If pricing is the only differentiator in your industry (meaning product, place, and promotion strategies are all pretty uniform), you may consider lowering your prices to snag a higher share of the market. But be wary about how this will impact customers' perceptions of your quality, as well as the risk of a price reduction competition, driving everyone's prices to unprofitable levels.

Raise your prices: If your business already leads the market by providing something unique or higher-quality products than the competition, you may consider raising your prices. Be mindful of the price elasticity of your product before pursuing this strategy, as a small price increase can lose customers in certain industries.

Match your competitors' pricing: It's much more challenging to sell products at the same price as competitors. This strategy works if your business has been in the market for a while and can make a unique or niche offer. In this case, the customer will decide to purchase based on personal preferences rather than the price.

If you feel like none of the above strategies will work for you, you might explore nontraditional pricing structures like bundling.

Where are your competitors selling? Is everything online, or do they have brick-and-mortar stores?

Every industry trends differently here—shoe brands, for example, tend to have some in-person outlets since most people want to try on a pair of shoes before buying them. Furniture stores, on the other hand, don't always rely on brick-and-mortar locations. They can provide pictures, videos, and product details (such as dimensions and materials) to provide customers with a "good enough" idea of what they're getting.

Promotion encompasses more than just advertising, but since advertising is so measurable and public, it's the easiest to spy on. To avoid wasting your advertising budget , analyze your competitors' strategies.

Here's what you're looking for:

Cost per click: If the CPC is too high, you may not want to use paid ads as a promotion channel at all. It's better to learn this from your competitors than from your own experience.

Keywords: Examine the competition level for each keyword in your competitors' ad campaigns. This will help you find the best-performing keywords with low competition (and that means lower cost per click). You'll also be able to see which keywords aren't doing well and avoid those.

Long-running ads: If your competitor keeps running the same campaign for a long time, it definitely works for them. You can try to create something similar to replicate their success.

If most competitors rely on social media advertisements as opposed to TV or print ads, you should probably follow suit. Likewise, if they're putting their entire budget into advertising how crispy their chicken sandwich is, it's probably because chicken sandwich consumers really like their chicken crispy. Watch how your competitors allocate their advertising budget and use that information to inform your own strategy.

4. Get to know their SEO strategy

SEO is a beast, and there's no surefire way to fully dissect your competitors' strategy. But there are a few ways to at least figure out what's working for them.

Use a keyword research tool to see what topics your competitors are ranking for. Do they rely entirely on industry-specific queries, or do they branch into other tangential topics? What pages are bringing in the most traffic?

By discovering which keywords your competitors target (and rank for), you get insight into what's working for them and uncover new keywords you might have neglected. Even better, you might also find keywords they aren't targeting and identify the underserved customers. You can also use it as a chance to differentiate your message so that you're ranking for more targeted keywords .

The Ahrefs screenshot below shows the highest-traffic-driving pages from Slack's blog. A competing communication platform could use this data to learn what's working for Slack and replicate their success. To really be successful, however, you need to one-up the competition, bringing something new to the table.

Ahrefs also lets you see your competitors' backlinks. Figure out which websites are already linking to your competitors, and then you can try to get yourself a backlink from those sites as well.

Pro tip: As you do this research, actually click into some of your competitors' high-ranking pages to see what exactly is attracting users (and Google). Data is crucial, but nothing can replace the human eye.

5. Make note of their most popular content

If you can figure out which types of content—blog posts, videos, podcasts, guides, etc.—are most popular with your competitors' audiences, that can help inform your own content strategy . And here's a tech twist: you can employ ChatGPT to run a content analysis. Simply plug in a piece of content, ask it to run the analysis, and it will quickly dissect the post, highlighting themes, patterns, and potential gaps your brand can capitalize on.

The goal is to identify which content types get the most traffic or engagement. You can use a marketing analytics tool to analyze both of those things:

Do the highest-performing pieces of content tend to all be one specific medium (video, infographic, written content, or something else)?

Do the titles of the most-shared articles all have numbers or other specific characters (like brackets or hyphens) in them?

Is the most-shared content all about a similar topic?

Let's say you run a travel blog and discover that your competitor's article called "How to save money for a trip" is super popular among their audience. You now have an opportunity to create content on a similar topic but make it even better. Maybe "The ultimate guide to traveling on a budget" or even a real story about "How 21-year-old Mike saved $10K for his epic adventure." 

You should also be following all your competitors to learn more about their social media strategy , including which platforms work best for them.

Social media presents an opportunity to let your brand's voice and personality shine. Take Wendy's, for example. The brand publicly roasts its competitors on X (Twitter), and the internet loves it.

Not every brand can (or should) be quite as blunt and sassy as Wendy's, but showing some personality can pay off.

6. Conduct a final SWOT analysis

A SWOT analysis is a great way to spot opportunities to capitalize on and threats to prepare for before they strike. In short:

Strengths (S) and weaknesses (W) look internally at your company.

Opportunities (O) and threats (T) look externally to the industry and market.

While diving into your competitive market analysis, consider these factors:

Market share percentage: This metric reflects the proportion of sales a company has in the industry compared to its competitors. Tools like Statista or market research reports can offer insights into a brand's dominance or underperformance.

Competitive features: Understand the unique offerings that set a product or service apart from its rivals. Customer surveys and product comparison charts are useful methods to determine standout features.

Company culture: A company's values, work environment, and ethics can be a deciding factor for customers. Monitoring employer review sites like Glassdoor or observing a company's interactions on social media can provide insights.

Customer reviews: Customer reviews provide direct feedback on a product or service's quality and the company's reputation. Platforms like Yelp, Trustpilot, or Google Reviews offer a treasure trove of customer sentiments and concerns.

Geography (if applicable): Location can be pivotal in a company's success, especially for local businesses. Using tools like Google Trends can help identify where a product or brand is most popular geographically.

Let's be clear—this isn't going to shine a spotlight on the exact strategy you should pursue to beat your competitors. What it can do is provide a high-level look at your internal and external environment, making it easier to piece together your competitive strategy.

When promoting your brand, you're thinking about how to communicate your strengths. Conducting a SWOT analysis forces you to also view your brand with scrutiny. You may be working toward being "the best" at everything, but there will inevitably be things that other brands do better.

Download our SWOT analysis template and follow along with the example below to learn as much as possible about your brand and your competitive environment. You can also kick-start the process using ChatGPT.

Let's say you're the CEO of an automotive company conducting a competitive analysis. After doing a deep dive into your competition and your industry as a whole, organizing your notes and SWOT analyses in folders labeled by competitor, you notice a huge push toward electric vehicles.

In fact, you estimate that your closest competitor (who targets the same market as you) now allocates over half of its advertising budget to its newest electric vehicle release. But you only have one electric vehicle option, and you only allocate 15% of your advertising budget toward it. You reasonably guess that you're in trouble.

Additional research confirms your market is very interested in making the switch to electric. You decide to reallocate your budget toward researching, producing, and promoting electric vehicles. Five years pass, and you realize you would have been left in the dust had you failed to analyze the competition or ignored the warning signs.

Competitive market analysis can prevent wasted resources, inspire new opportunities, and help you stay one step ahead of the competition. Take these six steps to better understand your company's strengths and weaknesses—then identify where you need to improve and how to invest your resources to remain a strong competitor in your industry. 

Sometimes, a company's competitive advantage comes from its seamless internal operations. It can be hard to find out what's going on internally at another company, but you can be sure you streamline your own processes. Here are some tips to get started:

5 things you should automate today

9 ways to leverage automation in the workplace

How to write internal documentation that works

Streamline work across departments with automation

How to build an analysis assistant with ChatGPT

This article was originally published by Diana Ford in May 2021. The most recent update was in September 2023.

Get productivity tips delivered straight to your inbox

We’ll email you 1-3 times per week—and never share your information.

Luke Strauss

Based in sunny San Diego, Luke is a digital marketer with 3+ years of experience developing and executing content strategy for eCommerce startups and SaaS enterprises alike—Airtable, Zoom, and yes, Zapier—to name a few. When he isn’t diving into a keyword research rabbit hole, you can find him at a music festival, thrifting, or spending time with his friends and family.

• Small business

Related articles

11 management styles, plus tips for applying each type

11 management styles, plus tips for applying...

Keep your company adaptable with automation

How to enrich lead data for personalized outreach

How to enrich lead data for personalized...

What is a proof of concept? And how to write one (with template)

What is a proof of concept? And how to write...

Improve your productivity automatically. Use Zapier to get your apps working together.

A Guide to Competitive Analysis: It’s Not Just about Competitors

By Joe Weller | April 16, 2018 (updated February 13, 2024)

• Share on Facebook
• Share on LinkedIn

Link copied

If you were running a cross-country marathon, wouldn’t you want to know something of the terrain and expected weather conditions before you began? The same principle of preparation applies when starting and continuing a business. It’s not enough to focus on your own production and financial goals: You need to understand what’s happening around you, how others create goods or services, the economic forecast, changes in rules and regulations, and more. In other words, you need to conduct a competitive analysis. The thought of searching for and digesting the required information may seem overwhelming, but we make it easy.

In this article, we explain how to focus your analysis by first deciding what questions you want answered. Learn how to find current and potential competitors and how many of them you need to review. Then, we cover the specific aspects of your competitors that you need to consider as well as where to find more information about them. Marketing experts weigh in on how to maintain focus during analysis. We also offer free, downloadable competitive analysis templates to start you on your own information gathering and analysis.

What Is Competitor Analysis?

Competitor analysis (CA) is a process of identifying competitors and gauging their business and marketing strategies to understand both their strengths and weaknesses and those of your own business. Competitive analysis provides a higher-level perspective of the entire marketing landscape and competitive intelligence.

“Competitive analysis is the process of analyzing all collected information to derive some insight for reducing risk and making better decisions,” explains competitive intelligence expert and author Babette Bensoussan .

“It is about your broader competitive environment,” she says. “I always remind my clients that competitors make up only one element of a business’s competitive environment. Other elements include government, technology, buyers, and suppliers, to name a few that impact how well you can compete.”

What Is the Purpose of a Competitive Analysis?

Researching your competitive landscape is essential to business growth and survival, and helps you offer better products or services to customers. You should gain an understanding of how customers view your company, what you’re doing right, and what you’re doing wrong. Therefore, competitive analysis forms a crucial part of marketing plans to help you understand what differentiates your product or service. Particularly when applying for funding, competitive analysis provides valuable insight into business plans. However, competitive analysis offers much more:

• Branding possibilities
• Insight into how competitors design products and messages
• SEO possibilities
• CRO (conversion rate optimization)
• GTM strategies
• User experience (UX) advantages of your and others’ products and websites
• Gaps in the market
• New products and services to develop
• Market trends

According to a Conductor survey , 60 percent of marketers don’t feel proficient in competitive analysis. Many don’t practice it on a regular basis. Knowledge derived from these exercises is critical, and you need to assess competition regularly. Nevertheless, marketing departments often skip competitive analysis, which leaves them with a fragmentary understanding of the landscape and competitors. Being proactive can help you anticipate and prepare for competitor developments and provide you with the agility to take advantage of changes.

According to Bensoussan, “In today’s world of constant change and information overload (whether the information be real or fake), it is critical for any business person to understand the competitive landscape and the forces that impact the profitability and viability of a business.”

What Should Be Included in a Competitive Analysis?

In most cases, a competitive analysis contains a few basic sections, which may vary depending on the size and form of your company and the focus of your analysis:

• A list of your main competitors
• An overview or what you know about them
• Who their target customers are
• A list of their products or services
• What media they use to market their goods and services
• Their current and past marketing strategies
• Their value proposition and effectiveness
• An analysis of all of the strengths and weaknesses of your competition (and your own company)
• An overview of the strategies being used by the competition to achieve their objectives
• An overview of the market and projections for the future

How to Prepare for a Competitive Analysis

One of the crucial prerequisites for a successful competitive analysis is an open mind. Check your beliefs at the door — what you think about your company, your customers, or your competitors isn’t necessarily true. That can be a good thing.

In addition, it is vital to understand why you are conducting an analysis. What are your goals for the business? What are your goals for this analysis? “Always, always be very clear as to what the decision you will be making is all about,” advises Bensoussan. “If you are not clear about your decision, then you will never know if you have good competitive analysis or just some more information.”

She offers these two questions as examples of how different the impact of each answer can be: “Tell me who’s who in the [manufacturing] of zippers?” versus “Should I enter the zipper-manufacturing industry, and can I achieve a return on investment of, say, 15 percent in three years?”

“Which question would help you the most in delivering good quality CA? Which outcome do you think would provide the most value?” Bensoussan asks.

Companies often enlist the help of outside consulting firms dedicated to conducting competitive intelligence research. Guidance on competitive intelligence support, such as database information, software platforms for market program tracking, and more is available through the Society of Competitive Intelligence Professionals .

Competitor Analysis Frameworks

Over the decades, marketing gurus have developed or advocated several competitive analysis frameworks. Here are six well-known methods to consider.

• Porter’s Five Forces Model: First published in 1979 by Harvard Business School professor Michael Porter, the Five Forces model provides a view beyond competitors to factors in your industry landscape that may threaten or strengthen your position. The Five Forces include the following:

• Potential New Entrants: Consider how much money, time, and effort it would take for a company to displace you.
• Competitive Rivalry: Determine who your competitors are, who the closest competitors are, and their products, prices, and quality. Fewer rivals mean more opportunity for your unique qualities to shine; many rivals mean more competitors to steal your customers and potentially better deals to lead customers elsewhere.
• Suppliers: The more potential suppliers you have, the better for you. Consider how having fewer suppliers might impact your operation.
• Buyers: If you have many customers, you have the power. Otherwise, buyers can negotiate more advantageous deals elsewhere or find sources other than yours. Consider how you would treat that situation.
• Substitutes (or Complements): A competitor could create a product or model that replaces yours. On the other hand, a new product or service could also complement yours, which would create a symbiotic sales situation. Complements are sometimes considered the sixth force in the model.

Porter stressed the importance of not confusing these constants with temporary disruptions, such as technological innovations or government interventions in industry.

You can download the Five Forces model below to answer your own questions about an industry or business proposition.

Download Five Forces Model

Excel  |  PDF

Industry Life Cycle Overview: Both industries and individual products have life cycles, which reflect the state of sales, whether robust or diminishing. Understand which stage of the life cycle your industry, company, or product is in to help target your marketing efforts. Product life cycles contain such stages as these:

• Introduction: At the introductory stage, a new industry or product is not well known or proven. It is usually marketed to a few early adopters. Because resources focus on product development, testing, and refinement, few or no profits accrue. Marketing focuses on explaining the product, creating awareness around it, and establishing a niche.
• Growth: As awareness grows and the industry or product becomes established, profits may also grow. However, in the growth stage, rival products may also appear. Although improvements require funds, production efficiencies may also develop. Some products have only a short growth phase. For example, a particular fashion may last for only one season. Other products experience a long or extended growth phase, such as software products, which continue their usefulness through upgrades. During the growth stage, marketing centers on differentiating the product, so it stands out from competing products.
• Maturity: In the maturity stage of a product or industry, sales may expand, but at a less accelerated rate. Fewer competitors may dominate the market and may attempt to differentiate on quality or increase sales by touting low costs.
• Saturation: You reach the saturation stage when every customer who could buy the product already owns the product. A lack of innovation or competition from a superior product could result in saturation.
• Decline/Termination: Industries and products decline for several reasons. Innovations may overtake them and render them obsolete. Businesses and product lines may fail to upgrade and innovate. At the decline or termination stage, companies may fold, continue in a smaller market, or merge with larger, successful businesses.  

Strategic Groups Analysis: You perform strategic groups analysis on companies within a business sector, such as automobiles, to see how they vie for their share of consumer expenditure. By dividing companies into strategic groups, you can understand how businesses of different sizes behave in the marketing landscape. Businesses within groups tend to be competitors, whereas businesses in other groups are related but not competitive. For example, running shoes and high-end women’s dress shoes are in different groups. Analyzing companies in this way can also reveal other significant information: direct competitors and their basis for competition; if and how a company can move to another group; and strategic problems and opportunities. Strategic groups are usually plotted on an x-y axis, where two highly relevant criteria form the axes. Here are some examples of criteria:

• Brand ownership
• Company size
• Capacity utilization
• Cost structure
• Geographical market segmentation
• Marketing activities
• Ownership structure
• Sales channels
• Product diversity
• Product quality
• R&D capability
• Vertical and horizontal integration

First, plot the companies where you think they belong on the graph. Now, with all companies plotted, create groupings. If you want, you can use larger or smaller circles to indicate market share. To gain greater insight, perform a Five Forces analysis on them, or consider the mobility barriers that prevent companies from shifting to other strategic groups.  

SWOT: Perhaps one of the most commonly addressed marketing analyses is SWOT (strengths, weaknesses, opportunities, and threats). In essence, SWOT represents what competitors do and do not do well. As you look at SWOT for competitors, also consider it for your own products and services.

• Strengths: What do they do better than you? What are they known for? Is their pricing, inventory, convenience, and level of service better than yours?
• Weaknesses: How do they fall short of your company’s standards? Can you leverage their shortcomings to improve your standing with customers?
• Opportunities: What in your competitors’ landscape can you exploit to your advantage?
• Threats: What in your competitors’ landscape threatens their business position?

Note that strengths and weaknesses focus on internal characteristics, while opportunities and threats concern external forces. SWOT can be performed separately, but it may provide a useful frame for studying a business’ products and services, marketing, and sales.  

Competitive Array: Competitive arrays, also known as competitive matrices , provide a way to quantify characteristics that may be unquantifiable. For example, if company A sells 500 widgets and company B sells 250, it’s clear which company sold more. But how do you quantify the attractiveness of online and print media or innovation? Creating the competitive array can be an individual or group exercise. To start, list your competitors across the top of your writing surface. In the left-most column, list important characteristics. Next, create a column for weighting the importance of each characteristic so that the sum of the characteristics totals one. The higher the weighting, the more important the characteristic (you may have a few characteristics with the same weight). Next, grade each competitor for each characteristic on a scale, such as from one to 10. Now, multiply the grade by the corresponding weight.  

Competitive Value Proposition Analysis: The characteristics of a value proposition are exclusivity, clarity, and credibility. This method concerns how unique the product or service is, how clearly the product message is conveyed, and whether the message is credibly supported by evidence, such as testimonials, statistics, or test results. Because customers remember only a few key advantages of your product from your media promotion, the main value proposition must be correct and clear and mesh with your actual competitive advantage. To figure out how to differentiate your company, you must determine how competitors differentiate themselves from each other. POPs (points of parity), PODs (points of difference), and POIs (points of irrelevance) help you dissect value propositions.

• Points of Parity (POPs): These are elements of customer benefit that both you and your competitors offer.
• Points of Difference (PODs): These are features of customer benefit that you offer but competitors don’t. Keep in mind that not every point of difference is significant to consumers.
• Points of Irrelevance (POIs): These are characteristics that customers don’t care about.

Your unique value proposition (differentiating characteristics) doesn’t need to appeal to every customer. Don’t make your value proposition too general. You can’t be all things to all customers, just as you can’t do what your competitors are doing.

Otherwise, there's no differentiation. You end up being like teenagers, everybody in the same jeans," says Sonia Schechter, Chief Marketing Officer of Marxent , a provider of virtual reality and augmented reality apps for furniture retailers. Therefore, target your message.

Discover your points of parity by using our POP template.

Download Points of Parity Template

Excel  |  Word  |  PDF

Who Are Your Competitors?

As a first step in competitive analysis, marketing guides typically suggest determining who your competitors are. Competitors can be divided into groups of direct competitors, indirect competitors, and future competitors.

• Direct Competitor: These are companies who sell a direct substitute for your product, operate in the same geographic area, and/or offer the same goods (such as groceries) to the same market. Ask who your customers would buy from if you weren’t in business.
• Indirect Competitor: These are companies in the same geographic area whose products occupy the same general, but not specific, category as your own (e.g., a general bakery versus a designer cake store). Indirect competition satisfies the customer’s need for a particular product or service, although that product or service may be different from yours. Similar products operating in different market segments do not represent direct competitors. For example, a high-end seafood restaurant doesn’t compete with a burger place.
• Future Competitor: Future competitors may currently be indirect competitors who change and expand solutions. In the bakery example, the general bakery could hire a high-end designer to compete with the specialty cake maker. Or, the designer cake store could branch out into breads and muffins.

It may be difficult at first to envision what types of organizations you need to analyze and whether you need to analyze all competitors.To identify competitors, ask yourself who your customers would buy from if your product did not exist. Perhaps even more important, consider who your customers think your competitors are. How many competitors you review depends: If only a few companies do what you do, analyze everyone. If you have many competitors, use Pareto analysis to focus on the critical 20 percent. Larger businesses may analyze the top 10, whereas a small business can focus on three. Disregard online competitors unless you plan to sell online.

‌ Download Pareto Chart Template - Excel

How to Find Current Competitors

Some competitors may seem obvious, but sleuthing can reveal challengers you weren’t aware of.

• Google search for a product or service similar to yours. Consider the companies in paid ads and organic returns.
• Try SEMrush to check which domains are using which keywords.
• Ask your current customers who they would choose besides you.
• Check Alexa, Google Trends, or SimilarWeb for general estimates on the popularity of domain names and keywords.
• Review Dun & Bradstreet for new incorporations.
• Consult Derwent for new patent information.
• See who has booths at trade shows.

How to Find Potential Competitors

While you consider the current playing field, you must also keep your eye on what’s coming around the corner. These are the future new entrants in your niche. Consider who might start a  business that would compete with yours. New competitors can be found in related markets, related technologies, or related products. Companies from other geographical areas with similar products may begin to sell in your area, and former employees or managers can start their own companies based on the themes of your business. In addition, consider the following conditions that may encourage competition:

• A company gains competitive advantage.
• Buyers are dissatisfied with suppliers.
• An unmet demand for goods exists.
• Few major barriers to entry exist.
• The industry offers high profit margins.
• The industry offers unrealized growth potential.
• Competitive rivalry is not intense.

It’s Not All about Competitors ( Competitive Doesn’t Always Mean Competitor )

Depending on what your product or service is and where it is in its life cycle, a competitor focus may not be optimal. For example, for emerging technologies, no true competitor may exist.

“Looking too closely at competition is a massive distraction,” Schechter notes. “If you’re selling a commodity or established product, such as a drugstore, which sells the same thing anywhere, you’d be looking at specific issues, like price, location, and assortment.”

Schecter says marketers themselves often don’t understand that what the competition is doing is not important: “Successful marketing is how you define yourself in the landscape. People don’t care about a feature-by-feature description, or even one feature. They buy the package. They like you. You’re different or you’re solving a particular problem. A new business must define and lay out the landscape for the customer.”

To succeed, understanding what customers want is key. “Marketers have nuanced detail, and customers don’t care about that detail,” Schechter continues. “But, you have to listen to their questions and engage in dialogue with them to gain real understanding,” she points out. She cites Apple’s promotion of the camera in the first iPhone as an example of marketers understanding what — out of thousands of potential functions — was important to consumers. “B2B marketing is the same. It’s about listening to customers, figuring out how they’re shopping, and trying to see through their eyes,” Schechter emphasizes.

“Obsessing over competition can get you off track. If you’re listening to customers, you’ll build the right product. But you don’t need to build your dreams on other people’s ideas,” she concludes.

Where to Find Information for a Competitive Analysis

Remember that every department of your business is a potential source for information, including the following areas:

• Sales: Questions for potential, current, and lost customers
• Research and Development: New patents
• Purchasing: Suppliers
• Marketing: Customers and other consumers

Once you’ve determined who your competitors are and what you want to learn about them and from them, you need to go information hunting:

• Visit offices or brick-and-mortar stores. What do they look like? Who’s there?
• Get financial and organizational information from public filings and from sources like Hoovers, Manta, and Dun & Bradstreet.
• Monitor PR Newswire for new developments and changes.
• Some marketing platforms may actually include information about your competitors.

Interviews and Research Surveys

Interviewing competitor customers and consumers who know little about your business is important to overcoming your preconceptions about the business landscape. You probably have specific questions in mind, but here are the basics:

• Why are you shopping for a solution?
• What were the main reasons you chose the company you did?
• Ranked from most important to least important, what are your five shopping criteria?

Media Scanning or Competitor Content Analysis

You can learn much about competitor products and messaging by scanning media. Media doesn’t just include online content (web pages, tweets, and Facebook posts) — it also includes such traditional marketing collateral as white papers, case studies, and data sheets. Moreover, consider reference materials, such as LexisNexis and Hoovers, and trade, business, or news publications for ads, news stories, and press releases. Media and content can reveal not only new products and new branding, but also new positioning and segmentation strategies, pricing, target markets, and promotion strategy.

What Information to Search for in Competitive Analysis

The approach to analysis depends on the questions requiring answers. To organize your analysis, divide it into three aspects: product or services, marketing, and sales. Each aspect contains its own questions and means of analysis.

Download Competitive Analysis Checklist

Products and Services

Your understanding of products and services must be thorough. Investigate the complete product or service line. Try to understand who your competitors’ customers are and what they need. Look at their pricing strategy and see if it differs for online and brick-and-mortar stores. Also, consider how they differentiate from their competitors.

Tracking competitor sales processes can involve more legwork. For public companies, SEC filings provide some financial information about growth or contraction, but, for private companies, information is less readily available. Information about sales channels may be easy to find through a look in the phone book or online. You can also gather details about the sale process by asking current customers why they chose your product over others. You can also acquire valuable information by following up even after you lose a sale in order to understand the customer’s thinking. What do their partner resales programs look like? What are their revenues versus sales volume?

Marketing Efforts in Competitive Analysis

What does the competitor marketing plan entail? How do competitors invest marketing efforts? What can you do even better? A variety of approaches can help you define competitor marketing strategy.

When you identify marketing assets, take a reasonable sample of items — no need to review all of them. Just remember to keep samples consistent among competitors. Also, when reviewing items, consider the quality of the collateral. It should appear professional, with no typos, and in the formal, professional, idiomatic voice. In addition, a solid library of resources, such as consistent blog posts, whitepapers, case studies, videos, webinars, and podcasts may point you to themes and leads you should follow.

E-Marketing Strategy Competitive Analysis

Few businesses today can function without a web presence that helps generate traffic and inquiries or purchases. Some statistics say that prospective buyers visit a website as many as nine times before purchasing and, depending on the product, visit multiple sites before purchasing. Forrester research after 2010 suggests potential customers visit three sites on average before buying. The more sites visited, the more money the customer intends to spend.

Therefore, understanding how your site compares to your nearest competitors can be helpful. To drive eyes to websites, online purveyors use search engine optimization (SEO) to employ the keywords most likely to garner high search ratings in Google (and other search engines). Marketers frequently also use SEM (search engine marketing) to promote a business or product by increasing visits to a website through paid keywords. Look at how saturated their content is with keywords and where they use keywords, whether in H1 and H2 tags, page titles, content, or links. Also, look at the difficulty level of their keywords.

Consider the usability of the steps in the sales funnel as well as the navigation. What do the  landing pages say? Also, look at backlinks (i.e., links from other pages to your competitor’s page) to your web page. See how many backlinks exist — and from which pages — to understand if this is something you can improve for your website.

Structure is important, but quality content also matters. Online marketing collateral appears as blogs, white papers, ebooks, case studies or user stories, videos, webinars, podcasts, and more. But words and pictures themselves are not valuable if they don’t offer any unique information or concise approaches to existing knowledge. Check whether content is shared and which topics attract attention, or, conversely, what that content and those topics are linked to. What do readers comment on, if they do comment? Who else is sharing what your competitors are publishing?

Social Media

Certain social media platforms appeal to some audiences more than others. The channels a company favors can reveal clues to the demographics of their target market. Make note of what social media buttons they include on pages and where on the page they include them.

Software Tools for Understanding Online Competitors

Besides monitoring content, you can monitor the mechanics of competitor websites to glean more data about how marketing strategy and product offerings are changing. Software helps to automate these investigations for you. Following are some of the many products available:

• BuiltWith : See what platform was used to build a page.
• Ghostery : Find trackers on a website.
• SEMrush : Discover company rankings, organic keywords, AdWords, and analyses of backlinks.
• Versionista : Track web page and website changes, SEO changes, and more.
• Visualping : Monitor webpage updates.
• SpyFu : Find competitor keywords and AdWords, including AdWord and keyword variations and history.
• iSpionage : Track PPC and other keywords in competitor campaigns.
• SimilarWeb : Compare competitor websites to your own.
• Heatmaps: Use large amounts of data to provide a visual representation of how users interact with a website. Heatmaps can indicate where users click and look and for how long. Levels of intensity of activity are usually displayed through colors.
• Session Recording Tools: Record user browsing sessions. Session recording tools can yield a wealth of rich data, but raise some privacy concerns.
• Tag Management Systems: Advanced e-marketing implementations use tags to aid analysis and reporting. Tags are snippets of code that are usually added to the <head> tags of a web page.

Web Page User Testing for UX in Competitive Analysis

It’s essential to understand how consumers approach your website, especially for web-based products and marketing. Allow customers to test your site, and even view it yourself from a customer’s perspective, to help eliminate unnecessary steps and streamline your sales funnel. Doing so can also help to illuminate the opportunities for upsells and cross-sells.

Limiting the analysis to two or three competitors offers a manageable amount of insight into usability, which helps you avoid reviewer overload and confusion. For impartial results, don’t reveal to test participants which website is yours.

Ask test participants to enter words in Google or list the words and phrases they would use to find a certain product or service. Not only does this yield potentially fruitful keywords, it also indicates whether your site appears in search returns.

To get a sense of each participant’s impression, have them look at each website for five seconds and answer the following questions:

• What three words would you use to describe the site?
• What is it about? What products or services are offered and for whom?
• How does this website make you feel?

To understand their process, give participants a task to perform on each website. Ask them to answer the following questions:

• What was the worst thing about your visit to this website?
• What aspects of the experience could be improved?
• What did you like about the website?
• What other comments do you have?
• Which website did you like best and why?

How Much Data Do You Need in a Competitive Analysis?

It may seem overwhelming to sit down and search out your competitors’ business situations. That’s why setting a clear intention before you begin an analysis is so important. In addition, Babette Bensoussan advises that you don’t need to analyze everything:

“Over the years, I have learned that once you have 70 percent of the information required for your chosen analytical technique, you can proceed to the analysis,” she explains. “You never really need all the pieces of a jigsaw puzzle to tell you what the picture is. This same philosophy applies to analysis. More information may not yield better insights nor improve predictive accuracy.”

How Do I Write a Competitor Analysis Report?

The format of your analysis depends on individual choice and the audience. You may also choose to use one kind of format while you work through the analysis, and another when you present findings.

Take a sheet of paper. In the left-most column, write the names of your closest competitors. Across the top of the page, list the main attributes of each product, such as target market, price, size, method of distribution, extent of customer service, prospective buyers, and so on. Then, make a check or a note for each attribute the competitor fulfils. An additional column can contain information about service or product availability, the website, a toll-free phone number, and other general information.

A competitor profile helps you make a detailed record about each competitor, and also allows you to capture snapshots of a business over time. Consider listing some of the following information:

• Location of offices and factories
• Key personalities, history, and trends
• Ownership, organizational structure, and corporate governance
• Number of employees and skill sets
• Management and management style
• Compensation, benefits, and retention rates
• Plant capacity, utilization rate, age of plant, capital investment
• Product mix per plant and shipping logistics
• Products and services
• Depth of product line
• New products developed and success rate
• Research and development details
• Brands and brand loyalty and awareness
• Patents and licenses
• Quality control conformance
• Cash flow and liquidity
• Profit growth profile
• Method of growth (organic or acquisitive)
• Objectives, mission statement, growth plans, acquisitions
• Marketing strategies
• Segments served, market shares, customer base, growth rate, and customer loyalty
• Promotional mix, promotional budgets, advertising themes, ad agency used, online promotional strategy
• Distribution channels (direct and indirect) and exclusivity agreements

Here is a step-by-step process for writing a competitor analysis report:

• Write down your competitors.
• Write what you know about them already.
• Discover who their target customers are.
• Discover their pricing methods.
• Investigate their marketing strategy.
• Figure out their competitive advantage.

Download our competitive analysis landscape template to get ideas for gathering information and reporting analysis results.

Download Competitive Analysis Landscape Template

Excel  |  Word  |  PDF  | Smartsheet

Competitive Analysis for Small Businesses

Small business can be competitive. Beyond meeting financial targets, you need to understand the competitive landscape (short of allowing it to distract you) and then target a niche market.  Many of the same analyses that apply to large businesses also apply to small businesses. However, if this is your first business, or if you don’t have a marketing background, you may want to pay attention to a few aspects.

First, it is helpful to acknowledge how much or how little you know about your competitors by sketching a profile of your top two or three competitors. Next, try to learn all you can about your competition.

You can use the following template to perform a competitive analysis for your small business.

Download Small Business Competitive Analysis Template

Word    |    PDF

What Is a Competitive Analysis in a Business Plan?

Competitive analysis should play a key role in the preparation of a business plan. Particularly if you seek outside funding, your knowledge of the competitive landscape will show your understanding of your business and the market forces at play.

When starting a business, consider all the analysis questions described above, but pay particular attention to issues of growth and opportunity. Consider addressing the following circumstances:

• Whether current competitors target a specific niche or offer products to the mass market
• If, how, and why competitors are growing or reducing business
• How your company will be stronger than competitors and better able to exploit changes in the market landscape
• What you will offer customers that no one else does (your competitive advantage)

In the business plan, describe the competitive landscape as it relates to direct and indirect competitors and opportunities and risks, emphasizing your competitive advantage. This competitive analysis can form the basis for your first marketing plan.

Sharpen Your Competitive Analysis with Smartsheet for Marketing

The best marketing teams know the importance of effective campaign management, consistent creative operations, and powerful event logistics -- and Smartsheet helps you deliver on all three so you can be more effective and achieve more. 

The Smartsheet platform makes it easy to plan, capture, manage, and report on work from anywhere, helping your team be more effective and get more done. Report on key metrics and get real-time visibility into work as it happens with roll-up reports, dashboards, and automated workflows built to keep your team connected and informed.

When teams have clarity into the work getting done, there’s no telling how much more they can accomplish in the same amount of time. Try Smartsheet for free, today.

Improve your marketing efforts and deliver best-in-class campaigns.

What is a Competitive Analysis — and How Do You Conduct One?

Published: April 24, 2024

Every time I work with a new brand, my first order of business is to conduct a competitive analysis. 

A competitive analysis report helps me understand the brand’s position in the market, map competitors’ strengths/weaknesses, and discover growth opportunities. 

In this article, I’ll break down the exact steps I follow to conduct competitor analysis and identify ways to one-up top brands in the market. 

We’ll cover:

What is competitive analysis?

What is competitive market research, competitive analysis in marketing.

• How To Conduct Competitive Analysis in 5 Steps

How to Do a Competitive Analysis (the Extended Cut)

Competitive product analysis, competitive analysis example, competitive analysis templates.

• Competitive Analysis FAQs

Competitive analysis is the process of comparing your competitors against your brand to understand their core differentiators, strengths, and weaknesses. It’s an in-depth breakdown of each competitor’s market position, sales & marketing tactics, growth strategy, and other business-critical aspects to see what they’re doing right and find opportunities for your business.

Competitive analysis gives you a clearer picture of the market landscape to make informed decisions for your growth. 

That said, you have to remember that competitive analysis is an opportunity to learn from others. It isn’t:

• Copying successful competitors to the T.
• Trying to undercut others’ pricing.
• A one-and-done exercise.

Let’s look at how this exercise can help your business before breaking down my 5-step competitive analysis framework.

4 Reasons to Perform Competitive Analysis 

If you’re on the fence about investing time and effort in analyzing your competitors, know that it gives you a complete picture of the market and where you stand in it.

Here are four main reasons why I perform a competitive analysis exercise whenever working with a brand for the first time:

• Identify your differentiators. Think of competitor analysis as a chance to reflect on your own business and discover what sets you apart from the crowd. And if you’re only starting out, it helps you brainstorm the best opportunities to differentiate your business.
• Find competitors’ strengths. What are your competitors doing right to drive their growth? Analyzing the ins and outs of an industry leader will tell you what they did well to reach the top position in the market.
• Set benchmarks for success. A competitor analysis gives you a realistic idea of mapping your progress with success metrics. While every business has its own path to success, you can always look at a competitor’s trajectory to assess whether you’re on the right track.
• Get closer to your target audience. A good competitor analysis framework zooms in on your audience. It gives you a pulse of your customers by evaluating what they like, dislike, prefer, and complain about when reviewing competing brands.

The bottom line: Whether you’re starting a new business or revamping an existing one, a competitive analysis eliminates guesswork and gives you concrete information to build your business strategy.

10 Free Competitive Analysis Templates

Track and analyze your competitors with these ten free planning templates.

• SWOT Analysis
• Battle Cards
• Feature Comparison
• Strategic Overview

You're all set!

Click this link to access this resource at any time.

Competitive market research is a vital exercise that goes beyond merely comparing products or services. It involves an in-depth analysis of the market metrics that distinguish your offerings from those of your competitors.

A thorough market research doesn't just highlight these differences but leverages them, laying a solid foundation for a sales and marketing strategy that truly differentiates your business in a bustling market.

In the next section, we’ll explore the nuts and bolts of conducting a detailed competitive analysis tailored to your brand.

10 Competitive Analysis Templates

Fill out the form to access the templates., essential aspects to cover in competitive analysis research .

Before we walk through our step-by-step process for conducting competitor analysis, let’s look at the main aspects to include for every competitor:

• Overview. A summary of the company — where it’s located, target market, and target audience.
• Primary offering. A breakdown of what they sell and how they compare against your brand.
• Pricing strategy. A comparison of their pricing for different products with your pricing.
• Positioning.  An analysis of their core messaging to see how they position themselves. Customer feedback: A curation of what customers have to say about the brand.

Now, it’s time to learn how to conduct a competitive analysis with an example to contextualize each step. 

Every brand can benefit from regular competitor analysis. By performing a competitor analysis, you'll be able to:

• Identify gaps in the market.
• Develop new products and services.
• Uncover market trends.
• Market and sell more effectively.

As you can see, learning any of these four components will lead your brand down the path of achievement.

Next, let's dive into some steps you can take to conduct a comprehensive competitive analysis.

How to Conduct Competitive Analysis in 5 Quick Steps

As a content marketer, I’ve performed a competitive analysis for several brands to improve their messaging, plan their marketing strategy, and explore new channels. Here are the five steps I follow to analyze competitors.

1. Identify and categorize all competitors.

The first step is a simple yet strategic one. You have to identify all possible competitors in your industry, even the lesser-known ones. The goal here is to be aware of all the players in the market instead of arbitrarily choosing to ignore a few.

As you find more and more competitors, categorize them into these buckets:

• Direct competitors. These brands offer the same product/service as you to the same target audience. People will often compare you to these brands when making a buying decision. For example, Arcade and Storylane are direct competitors in the demo automation category.
• Indirect competitors. These businesses solve the same problem but with a different solution. They present opportunities for you to expand your offering. For example, Scribe and Whatfix solve the problem of documentation + internal training, but in different ways.
• Legacy competitors. These are established companies operating in your industry for several years. They have a solid reputation in the market and are a trusted name among customers. For example, Ahrefs is a legacy competitor in the SEO industry.
• Emerging competitors. These are new players in the market with an innovative business model and unique value propositions that pose a threat to existing brands. For example, ChatGPT came in as a disruptor in the conversational AI space and outperformed several brands. 

Here’s a competitive matrix classifying brands in the community and housing space:

Testing It Out

To help you understand each step clearly, we’ll use the example of Trello and create a competitor analysis report using these steps.

Here’s a table of the main competitors for Trello:

able of the main competitors for Trello:

2. Determine each competitor’s market position.

Once you know all your competitors, start analyzing their position in the market. This step will help you understand where you currently stand in terms of market share and customer satisfaction. It’ll also reveal the big guns in your industry — the leading competitors to prioritize in your analysis report.

Plus, visualizing the market landscape will tell you what’s missing in the current state. You can find gaps and opportunities for your brand to thrive even in a saturated market.

To map competitors’ market positions, create a graph with two factors: market presence (Y-axis) and customer satisfaction (X-axis). Then, place competitors in each of these quadrants:

• Niche. These are brands with a low market share but rank high on customer satisfaction. They’re likely targeting a specific segment of the audience and doing it well.
• Contenders. These brands rank low on customer satisfaction but have a good market presence. They might be new entrants with a strong sales and marketing strategy.
• Leaders. These brands own a big market share and have highly satisfied customers. They’re the dominant players with a solid reputation among your audience.
• High performers. These are another category of new entrants scoring high on customer satisfaction but with a low market share. They’re a good alternative for people not looking to buy from big brands.

This visualization will tell you exactly how crowded the market is. But it’ll also highlight ways to gain momentum and compete with existing brands.

Here’s a market landscape grid by G2 documenting all of Trello’s competitors in the project management space. For a leading brand like Trello, the goal would be to look at top brands in two quadrants: “Leaders” and “High Performers.” 

Image Source

3. Extensively benchmark key competitors.

Step 2 will narrow down your focus from dozens of competitors to the few most important ones to target. Now, it’s time to examine each competitor thoroughly and prepare a benchmarking report.

Remember that this exercise isn’t meant to find shortcomings in every competitor. You have to objectively determine both the good and bad aspects of each brand.

Here are the core factors to consider when benchmarking competitors:

• Quality. Assess the quality of products/services for each competitor. You can compare product features to see what’s giving them an edge over you. You can also evaluate customer reviews to understand what users have to say about the quality of their offering.
• Price. Document the price points for every competitor to understand their pricing tactics. You can also interview their customers to find the value for money from users’ perspectives.
• Customer service. Check how they deliver support — through chat, phone, email, knowledge base, and more. You can also find customer ratings on different third-party platforms.
• Brand reputation. You should also compare each competitor’s reputation in the market to understand how people perceive the brand. Look out for anything critical people say about specific competitors.  
• Financial health. If possible, look for performance indicators to assess a brand's financial progress. You can find data on metrics like revenue growth and profit margins. 

This benchmarking exercise will involve a combination of primary and secondary research. Invest enough time in this step to ensure that your competitive analysis is completely airtight.

Check out this example of a competitor benchmarking report for workforce intelligence tools:

Here’s how I benchmarked Asana based on these criteria using the information I could find:

4. Deep dive into their marketing strategy.

While the first few steps will tell you what you can improve in your core product or service, you also need to find how competitors market their products.

You need to deep-dive into their marketing strategies to learn how they approach buyers. I analyze every marketing channel, then note my observations on how they speak to their audience and highlight their brand personality.

Here are a few key marketing channels to explore:

• Website. Analyze the website structure and copy to understand their positioning and brand voice.
• Email. Subscribe to emails to learn their cadence, copywriting style, content covered, and other aspects.
• Paid ads. Use tools like Ahrefs and Semrush to find if any competitor is running paid ads on search engines.
• Thought leadership. Follow a brand’s thought leadership efforts with content assets like podcasts, webinars, courses, and more.
• Digital PR. Explore whether a brand is investing in digital PR to build buzz around its business and analyze its strategy.
• Social media. See how actively brands use different social channels and what kind of content is working best for them.
• Partnerships. Analyze high-value partnerships to see if brands work closely with any companies and mutually benefit each other.

You can create a detailed document capturing every detail of a competitor’s marketing strategy. This will give you the right direction to plan your marketing efforts. 

5. Perform a SWOT analysis.

The final step in a competitive analysis exercise is creating a SWOT analysis matrix for each company. This means you‘ll take note of your competitor’s strengths, weaknesses, opportunities, and threats. Think of it as the final step to consolidate all your research and answer these questions:

• What is your competitor doing well?
• Where do they have an advantage over your brand?
• What is the weakest area for your competitor?
• Where does your brand have the advantage over your competitor?
• In what areas would you consider this competitor a threat?
• Are there opportunities in the market that your competitor has identified?

You can use tools like Miro to visualize this data. Once you visually present this data, you’ll get a clearer idea of where you can outgrow each competitor. 

Here’s a SWOT analysis matrix I created for Asana as a competitor of Trello:

• Determine who your competitors are.
• Determine what products your competitors offer.
• Research your competitors' sales tactics and results.
• Take a look at your competitors' pricing, as well as any perks they offer.
• Ensure you're meeting competitive shipping costs.
• Analyze how your competitors market their products.
• Take note of your competition's content strategy.
• Learn what technology stack your competitors use.
• Analyze the level of engagement on your competitors' content.
• Observe how they promote marketing content.
• Look at their social media presence, strategies, and go-to platforms.
• Perform a SWOT Analysis to learn their strengths, weaknesses, opportunities, and threats.

To run a complete and effective competitive analysis, use these ten templates, which range in purpose from sales to marketing to product strategy.

Featured Resource: 10 Competitive Analysis Templates

1. Assess your current product pricing.

The first step in any product analysis is to assess current pricing.

Nintendo offers three models of its Switch console: The smaller lite version is priced at $199, the standard version is $299, and the new OLED version is $349.

Sony, meanwhile, offers two versions of its PlayStation 5 console: The standard edition costs $499, and the digital version, which doesn’t include a disc drive, is $399.

2. Compare key features.

Next is a comparison of key features. In the case of our console example, this means comparing features like processing power, memory, and hard drive space.

3. Pinpoint differentiators.

With basic features compared, it’s time to dive deeper with differentiators. While a glance at the chart above seems to indicate that the PS5 is outperforming its competition, this data only tells part of the story.

Here’s why: The big selling point of the standard and OLED Switch models is that they can be played as either handheld consoles or docked with a base station connected to a TV. What’s more, this “switching” happens seamlessly, allowing players to play whenever, wherever.

The Playstation offering, meanwhile, has leaned into market-exclusive games that are only available on its system to help differentiate them from their competitors.

4. Identify market gaps.

The last step in a competitive product analysis is looking for gaps in the market that could help your company get ahead.

When it comes to the console market, one potential opportunity gaining traction is the delivery of games via cloud-based services rather than physical hardware.

Companies like Nvidia and Google have already made inroads in this space, and if they can overcome issues with bandwidth and latency, it could change the market at scale.

How do you stack up against the competition? Where are you similar, and what sets you apart? This is the goal of competitive analysis.

By understanding where your brand and competitors overlap and diverge, you’re better positioned to make strategic decisions that can help grow your brand.

Of course, it’s one thing to understand the benefits of competitive analysis, and it’s another to actually carry out an analysis that yields actionable results. Don’t worry — we’ve got you covered with a quick example.

Sony vs. Nintendo: Not all fun and games.

Let’s take a look at popular gaming system companies Sony and Nintendo.

Sony’s newest offering — the Playstation 5 — recently hit the market but has been plagued by supply shortages.

Nintendo’s Switch console, meanwhile, has been around for several years but remains a consistent seller, especially among teens and children.

This scenario is familiar for many companies on both sides of the coin; some have introduced new products designed to compete with established market leaders, while others are looking to ensure that reliable sales don’t fall.

Using some of the steps listed above, here’s a quick competitive analysis example.

In our example, it’s Sony vs Nintendo, but it’s also worth considering Microsoft’s Xbox, which occupies the same general market vertical.

This is critical for effective analysis; even if you’re focused on specific competitors and how they compare, it’s worth considering other similar market offerings.

PlayStation offers two PS5 versions, digital and standard, at different price points, while Nintendo offers three versions of its console.

Both companies also sell peripherals — for example, Sony sells virtual reality (VR) add-ons, while Nintendo sells gaming peripherals such as steering wheels, tennis rackets, and differing controller configurations.

When it comes to sales tactics and marketing, Sony and Nintendo have very different approaches.

In part thanks to the recent semiconductor shortage, Sony has driven up demand via scarcity — very low volumes of PS5 consoles remain available. Nintendo, meanwhile, has adopted a broader approach by targeting families as its primary customer base.

This effort is bolstered by the Switch Lite product line, which is smaller and less expensive, making it a popular choice for children.

The numbers tell the tale : Through September 2021, Nintendo sold 14.3 million consoles, while Sony sold 7.8 million.

Sony has the higher price point: Their standard PS5 sells for $499, while Nintendo’s most expensive offering comes in at $349. Both offer robust digital marketplaces and the ability to easily download new games or services.

Here, the key differentiators are flexibility and fidelity. The Switch is flexible — users can dock it with their television and play it like a standard console or pick it up and take it anywhere as a handheld gaming system.

The PS5, meanwhile, has superior graphics hardware and processing power for gamers who want the highest-fidelity experience.

5. Analyze how your competitors market their products.

If you compare the marketing efforts of Nintendo and Sony, the difference is immediately apparent: Sony’s ads feature realistic in-game footage and speak to the exclusive nature of their game titles.

The company has managed to secure deals with several high-profile game developers for exclusive access to new and existing IPs.

Nintendo, meanwhile, uses brightly lit ads showing happy families playing together or children using their smaller Switches while traveling.

6. Analyze the level of engagement on your competitor's content.

Engagement helps drive sales and encourage repeat purchases.

While there are several ways to measure engagement, social media is one of the most straightforward: In general, more followers equates to more engagement and greater market impact.

When it comes to our example, Sony enjoys a significant lead over Nintendo: While the official Playstation Facebook page has 38 million followers, Nintendo has just 5 million.

Competitive analysis is complex, especially when you’re assessing multiple companies and products simultaneously.

To help streamline the process, we’ve created 10 free templates that make it possible to see how you stack up against the competition — and what you can do to increase market share.

Let’s break down our SWOT analysis template. Here’s what it looks like:

Don't forget to share this post!

Related articles.

25 Tools & Resources for Conducting Market Research

Market Research: A How-To Guide and Template

SWOT Analysis: How To Do One [With Template & Examples]

TAM SAM SOM: What Do They Mean & How Do You Calculate Them?

How to Run a Competitor Analysis [Free Guide]

5 Challenges Marketers Face in Understanding Audiences [New Data + Market Researcher Tips]

Causal Research: The Complete Guide

Total Addressable Market (TAM): What It Is & How You Can Calculate It

What Is Market Share & How Do You Calculate It?

3 Ways Data Privacy Changes Benefit Marketers [New Data]

10 free templates to help you understand and beat the competition.

Marketing software that helps you drive revenue, save time and resources, and measure and optimize your investments — all on one easy-to-use platform

• For Small Business

How to Conduct a Competitive Analysis in 2024: The Definitive Guide

• May 12, 2024
• by steven-austin

In the fast-paced world of business, staying ahead of the competition is crucial for success. But how do you know what your competitors are up to, and how can you use that knowledge to gain an advantage? Enter competitive analysis.

In this comprehensive guide, we‘ll dive deep into the art and science of competitive analysis, sharing expert tips, real-world examples, and actionable templates to help you outsmart your rivals in 2024 and beyond.

What is Competitive Analysis?

Competitive analysis is the process of identifying, researching, and analyzing your competitors to gain insights into their strengths, weaknesses, strategies, and market positioning. By understanding your competitive landscape, you can make informed decisions to differentiate your brand, optimize your strategies, and capture more market share.

Consider these eye-opening statistics:

• 61% of marketers say generating leads is their biggest challenge (HubSpot)
• Companies that conduct regular competitor analysis have 18% higher profit margins than those that don‘t (MIT Sloan)
• 90% of Fortune 500 companies now conduct competitor analysis, up from just 20% in the 1980s (Harvard Business Review)

In other words, competitive analysis is no longer a nice-to-have—it‘s a must-have for businesses that want to thrive in today‘s cutthroat market.

The Benefits of Competitive Analysis

Still not convinced? Here are some of the key benefits of conducting a thorough competitive analysis:

Identify market gaps and opportunities: By analyzing competitors‘ offerings, you can spot unmet customer needs and untapped market segments to target.

Benchmark your performance: Comparing your metrics to industry averages and top performers can help you set ambitious yet achievable goals.

Refine your unique value proposition: Understanding rivals‘ positioning allows you to craft a compelling USP that sets you apart.

Anticipate and counter competitive threats: Keeping tabs on competitors helps you stay one step ahead and react quickly to their moves.

Optimize your marketing and sales strategies: Knowing what works (and doesn‘t work) for competitors can inform your own campaigns and tactics.

Make smarter strategic decisions: From product development to pricing to partnerships, competitive insights can guide your high-stakes choices.

Now that we‘ve established the importance of competitive analysis, let‘s dive into the nitty-gritty of how to do it effectively.

How to Conduct a Competitive Analysis: A Step-by-Step Process

Step 1: identify your competitors.

The first step in any competitive analysis is to identify who you‘re actually competing with. This may seem obvious, but many businesses cast too wide a net or overlook less direct threats.

To find your true competitors, consider:

Direct competitors: Companies offering similar products/services to the same target market. E.g. Coke vs Pepsi.

Indirect competitors: Companies offering different products that meet the same need or solve the same problem. E.g. Netflix vs YouTube.

Replacement competitors: Products or services that could replace yours entirely. E.g. landlines vs smartphones.

Perceived competitors: Companies that customers may compare you to, even if they‘re not direct rivals. E.g. a local coffee shop vs Starbucks.

Once you‘ve brainstormed a list of competitors, prioritize the top 5-10 that are most relevant to research in-depth.

Step 2: Analyze Competitors‘ Products & Services

Now it‘s time to play secret shopper and take a closer look at what your competitors are selling. For each rival, examine:

Product features and benefits: How do their offerings stack up against yours in terms of functionality, quality, design, etc.? Use a feature comparison matrix to map this out visually.

Unique value proposition: What key benefits or differentiators do they emphasize in their messaging and positioning? How compelling are these USPs?

Customer reviews and sentiment: What are customers saying about their products online? Check review sites, social media, and forums to gauge satisfaction levels and common complaints.

Pricing and packaging: How are their products priced and bundled? Do they offer discounts, freemiums, or subscriptions? How does their pricing compare to the market and your own?

Compile your findings in a centralized competitors spreadsheet or database for easy reference and analysis.

Step 3: Evaluate Competitors‘ Marketing Strategies

Next, put on your marketing hat and dive into your rivals‘ promotional efforts. Look at:

Website traffic and engagement: Use tools like SimilarWeb or SEMrush to benchmark competitors‘ traffic volumes, sources, and key engagement metrics like bounce rate, time on site, pages per visit.

SEO/Content marketing: Analyze competitors‘ target keywords, top-ranking pages, blog content, and backlink profiles to identify gaps and opportunities.

Social media presence: Assess rivals‘ follower counts, posting frequency, engagement rates, and content mix across key social channels. Don‘t just track vanity metrics—look for signs of genuine customer interaction and influence.

Advertising: Use tools like Facebook Ad Library or SpyFu to see competitors‘ ad creative, copy, and estimated spends. Also look for offline advertising like billboards, commercials, and direct mail.

Email marketing: Subscribe to competitors‘ newsletters or email lists (use a Burner email) to analyze their messaging, cadence, and CTAs.

PR/Influencer partnerships: Monitor press coverage and influencer mentions of competitors to see how they‘re shaping their brand narrative and reaching new audiences.

Based on your analysis, give each competitor‘s marketing a grade from A to F. Note any standout tactics you could adapt or areas where you could outflank them.

Step 4: Investigate Competitors‘ Sales & Growth Strategies

Understanding how your competitors sell and scale is crucial for staying competitive. Dig into:

Sales channels and tactics: How do they sell—online, offline, direct, via partners? What does their sales process look like? Mystery shop or inquire to find out.

Customer acquisition and retention: How do they attract and keep customers? What are their acquisition costs and churn rates?

Partnerships and M&A: What strategic partnerships, investments, or acquisitions have they made to fuel growth? Use databases like Crunchbase to track their dealmaking.

Hiring and expansion: Are they growing their team or opening new offices? Analyze job postings to see what skills they‘re seeking and where they‘re expanding.

Funding and financials: For public companies, read annual reports and earnings calls to understand their financial health and growth plans. For private firms, check funding databases or use tools like Clearbit.

Connect the dots between competitors‘ revenue models, growth tactics, and overall business strategy. How sustainable is their approach and where are they vulnerable?

Step 5: Map Competitors‘ Positioning & Perceptions

Your competitive position and brand perception can be just as important as your actual product or service. To understand how you stack up, analyze:

Brand messaging and values: What key brand messages and values do competitors emphasize across touchpoints? How authentic and resonant are these?

Customer personas and segments: Who are competitors‘ target customers and how do they segment them? Create detailed customer avatars for each rival.

Brand sentiment and associations: What do customers associate with each competitor‘s brand—quality, innovation, value? Use social listening tools to track sentiment over time.

Competitive differentiation: How do customers perceive competitors‘ unique advantages? Conduct surveys or interviews to map out your competitive landscape.

Customer loyalty and advocacy: How loyal are competitors‘ customers? Look at metrics like Net Promoter Score, repeat purchases, and referrals.

Summarize your competitive positioning analysis in a perceptual map to visualize where you fit and where there may be whitespace to claim.

Step 6: Synthesize Your Findings with SWOT Analysis

By now, you‘ve collected a wealth of competitive intelligence. To make sense of it all, conduct a SWOT analysis for each major rival:

Strengths: What do they excel at? What advantages do they have in terms of resources, capabilities, or market position?

Weaknesses: Where do they fall short? What do customers complain about most? Where are they vulnerable to disruption?

Opportunities: How could you exploit their weaknesses or unmet customer needs? What trends or changes could you capitalize on?

Threats: Which of their strengths pose the greatest risk to your business? How could they put you on the defensive?

Distill your SWOT findings into clear, actionable insights and recommendations. For example:

Use these insights to inform your strategies and anticipate competitive moves.

Competitive Analysis Tools & Templates

Competitive analysis can be time-consuming, but the right tools and templates can streamline the process. Here are some of our favorites:

• SEMrush for SEO, PPC, and traffic analysis
• SimilarWeb for website traffic and engagement benchmarking
• Owler for company profiles, news, and competitor comparisons
• Crunchbase for funding, M&A, and partnership data
• SpyFu for competitor keyword research and ad analysis
• Facebook Ad Library for spying on competitors‘ social ads
• Product feature comparison template
• SWOT analysis template

Of course, tools are no substitute for human insight and analysis. The key is to use them to gather raw data, then apply your own critical thinking and industry expertise to extract meaningful insights.

Competitive Analysis Best Practices

To get the most out of your competitive analysis efforts, keep these best practices in mind:

Focus on the right competitors: Don‘t get bogged down analyzing every possible rival. Prioritize those that are most relevant to your market, customers, and strategic goals.

Look beyond the obvious: Competitive threats can come from unexpected places. Think creatively about adjacent industries, emerging technologies, and shifts in customer behavior that could disrupt your market.

Collaborate across functions: Competitive intelligence shouldn‘t live in a silo. Involve stakeholders from sales, product, marketing, and executive leadership to get diverse perspectives and buy-in.

Update your analysis regularly: Markets move quickly, so your competitive analysis can‘t be a one-and-done effort. Schedule quarterly or bi-annual updates to stay on top of new developments.

Turn insights into action: The ultimate goal of competitive analysis is to inform your strategies and execution. Make sure your findings translate into clear next steps and initiatives, not just a dense report that gathers dust.

Play to your strengths: Competitive analysis isn‘t about copying rivals‘ every move. Instead, use it to double down on your unique advantages and find opportunities to zag where others zig.

Learn from the best: Look outside your industry for inspiration and competitive best practices. What can you learn from Amazon‘s relentless customer focus, Apple‘s design prowess, or Nike‘s marketing muscle?

Real-World Competitive Analysis Examples

Need some inspiration? Here are a few real-world examples of companies that used competitive analysis to outsmart their rivals:

Tesla vs. Big Auto: By analyzing the weaknesses of traditional car makers (slow innovation, poor electric vehicle design, weak brand loyalty among millennials), Tesla was able to disrupt the industry with sleek, high-performance EVs and a direct-to-consumer sales model.

Warby Parker vs. Luxottica: Warby Parker took on the eyewear giant by identifying pain points in the traditional glasses-buying process (high costs, inconvenience, limited selection). They offered stylish, affordable frames online with free home try-on—and quickly captured market share.

Airbnb vs. Hotels: Airbnb analyzed the limitations of the hotel industry (standardization, high costs, impersonal experience) and created a platform for unique, local accommodations at lower prices. They also leveraged user reviews and social proof to build trust and loyalty.

Netflix vs. Blockbuster: Netflix recognized the weaknesses of the brick-and-mortar video rental model (late fees, limited selection, inconvenience) and disrupted it with a subscription-based DVD-by-mail service. They then pivoted to streaming to stay ahead of the shift to online video consumption.

Spotify vs. iTunes: By studying the pain points of digital music buyers (high costs, limited device compatibility, need to purchase individual tracks), Spotify launched a freemium music streaming service that was more affordable, flexible, and personalized than Apple‘s iTunes.

These examples show the power of using competitive analysis to identify market opportunities, differentiate your brand, and disrupt entire industries. Of course, each company also executed brilliantly on their insights—but it all started with a deep understanding of the competitive landscape.

In today‘s hyper-competitive business environment, you can‘t afford to operate in a vacuum. Competitive analysis is a crucial tool for staying ahead of the curve, making informed strategic decisions, and ultimately outperforming your rivals.

By following the step-by-step process outlined in this guide and using the tools and templates provided, you can conduct a comprehensive competitive analysis that gives your business an unfair advantage.

But remember: competitive analysis is not a one-time exercise. It‘s an ongoing process of monitoring, analyzing, and adapting to the ever-changing market landscape. The most successful companies make competitive intelligence a core competency and a key input into all major decisions.

So what are you waiting for? Start putting your rivals under the microscope and uncovering the insights you need to dominate your market in 2024 and beyond.

Further Reading & Resources

• Competitive Strategy: Techniques for Analyzing Industries and Competitors by Michael E. Porter
• Competing Against Luck: The Story of Innovation and Customer Choice by Clayton M. Christensen
• Competitive Intelligence For Dummies by Jim Underwood
• How to Conduct and Prepare a Competitive Analysis [Free Templates] – HubSpot
• 5 Steps to Conduct a Competitive Analysis – Entrepreneur
• How to Do Competitor Analysis: A Step-By-Step Guide – Ahrefs

Armed with these resources and the knowledge you‘ve gained from this guide, you‘re well on your way to becoming a competitive analysis pro.

Now get out there and start outwitting, outplaying, and outlasting the competition!

Business Plan Market Analysis - Your Road Map to Success

Welcome to our comprehensive guide on the business plan market analysis section of a business plan. Market Analysis is a key part of any good business plan, which will help you better assess and understand your market. ‍ The business plan market analysis section is the heart and soul of your strategy, impacting everything from marketing to operations to the financial forecast. The market analysis helps you understand your position within the industry, the potential size of your market, the competitive landscape, and most importantly, it assists in identifying your target customers. In this blog post, we'll take you through the essentials of market analysis: what it is, why it's crucial, and the components it comprises.

Table of Contents

Business Plan Market Analysis - What Is It?

• Key Components
• How To Implement

Tips and Best Practices

• Market Analysis Case Study

Wrapping It All Up

Market analysis is a comprehensive examination of the dynamics, trends, and competitive landscape of the business environment within which a company operates. It is a vital component of a business plan as it allows entrepreneurs and business owners to understand their industry and market better, enabling them to make well-informed decisions. The business plan market analysis section has two main benefits. Firstly, it Allows you to Identify key opportunities in the market. By studying the market, a business can identify gaps, trends, or customer needs that aren't currently being met and then plan to cater to them effectively. Secondly, it also allows you to recognise potential threats and competition. By understanding your competitors, their offerings, strategies, strengths, and weaknesses, you can position yourself better against their position in the marketplace. Overall the role of market analysis in a business plan cannot be understated. It serves as the foundation upon which the marketing and sales strategies are built. In the following sections, we will take a deep dive into the key components of market analysis and how to conduct it effectively. 

Remember, the opening of your Executive Summary sets the tone for the entire document. Make it memorable and compelling to encourage the reader to continue exploring.

What Are The Key Components of Market Analysis?

Understanding the key components of a market analysis is crucial to conducting one effectively. Each element contributes a unique insight into your market, providing a comprehensive overview of the environment in which your business will operate. Here are the key components:

• Industry Description and Outlook: This involves describing the industry within which your business will operate. Look to identify the key trends influencing it and the outlook of the future of the industry based on reliable industry forecasts.
• Target Market: It's vital to identify and understand your ideal customers. This involves defining the demographics (age, gender, income, etc.), psychographics (interests, values, behaviours, etc.), and geographic location of the customers your business aims to target. Furthermore, it's important to understand their needs, preferences, and buying habits.
• Market Size and Trends: Here, you need to determine the total size of your target market. This involves quantifying the number of potential customers, the total sales volume, or the total market value. Furthermore, it's crucial to identify key market trends, which may include changes in customer behaviour, new technologies, or shifting regulatory environments.
• Market Segmentation: This involves dividing your target market into distinct groups (segments) based on certain characteristics. These might include age, location, buying habits, or customer needs. By taking the time to segment your customers you can develop better targeting strategies for your marketing campaigns.
• Competitive Analysis: This component involves identifying your key competitors and analysing their products, sales strategies, market share, strengths, and weaknesses. A competitive analysis will help your business identify its unique selling proposition (USP) and differentiate itself from competitors.
• SWOT Analysis: Finally, conducting a SWOT (Strengths, Weaknesses, Opportunities, Threats) analysis will allow your business to identify its internal strengths and weaknesses, as well as external opportunities and threats in the market. This can help your business leverage its strengths, address its weaknesses, capitalise on opportunities, and prepare for potential threats.

Business Plan Market Analysis - How to Implement 

Conducting a business plan market analysis might seem like a daunting task, but you can make it more achievable by breaking it down into key tasks.

• Industry Description and Outlook: Start by gathering data on your industry. This can include industry reports, market research data, news articles, and government statistics. Remember to cite your sources to add credibility to your analysis.
• Target Market: Identifying your target market requires an understanding of who is most likely to buy your product or service. You can conduct surveys, interviews, or focus groups to gather data on potential customers. If you already have a customer database, try to delve into this further by conducting post-purchase interviews with customers. Try to identify demographic, geographic, and psychographic characteristics, as well as buying habits and needs. The aim is to create a clear and specific profile of your ideal customer. You will aim to use this data to generate customer segments to target with your marketing campaigns.
• Market Size and Trends: Estimating market size can be challenging but can be done by looking at industry reports, government data, and market research studies. You can also look at the sales of competitors or analogous products. Identify key market trends by examining changes in customer behaviour, technological advances, and regulatory changes.
• Competitive Analysis: Identify your key competitors and analyse their offerings. Look at their products, pricing, marketing strategies, and market share. Try to understand their strengths and weaknesses. You can gather this information from their websites, customer reviews, and industry reports. Use this analysis to identify opportunities for your business to differentiate itself.
• SWOT Analysis: You can consolidate all of your initial research into a SWOT analysis which will help synthesise your learning and make it easier to develop strategies from your research.

Remember, conducting a market analysis isn't a one-time task. Markets are dynamic, with customer preferences, competition, and external factors continually changing. Your aim should be to continually update your business plan market analysis periodically. Here at Action Planr we have a full guide on how to conduct a SWOT Analysis for more detailed information on the full process.

Successfully conducting a market analysis involves more than just understanding its components and knowing where to find the necessary data. Here are some tips and best practices to help make your market analysis more robust, reliable, and useful for decision-making:

• Using Reliable Data Sources for Market Research: The quality of your analysis is directly tied to the quality of your data. Therefore, it's important to use reliable sources such as government databases, industry reports, reputable market research firms, and academic studies. Be wary of data that doesn't come from reliable sources.
• Understanding the Importance of Both Quantitative and Qualitative Research: Quantitative data, like statistics and numerical facts, provides a solid base for your analysis. But don't underestimate the power of qualitative data—opinions, anecdotes, and experiences—which can provide deeper insight into customer behaviours and preferences.
• Keeping the Analysis Current and Updated: Markets change rapidly. What was true last year—or even last month—may not hold today. Regularly updating your market analysis can help you keep up with changes and adjust your business strategies accordingly.
• Ensuring Your Analysis is Relevant to Your Specific Business Model: The insights you need depend on your business model. A B2B company will need a different kind of analysis than a B2C company. Tailor your market analysis to your specific business needs and objectives.
• Importance of Validating Assumptions: In the course of conducting a market analysis, you'll likely make assumptions. Be sure to validate these assumptions with solid data whenever possible.
• Keep your Audience in Mind: If your business plan is read by investors, they'll be interested in market size, growth opportunities, and competitive landscape. Make sure your market analysis addresses these topics and is presented in a clear, easy-to-understand format.

Business Plan Market Analysis - Case Study

To understand how the principles and processes of market analysis work in a real-world context, let's look at a case study of an innovative tech startup, "Techie Toys." Techie Toys is a company that produces educational toys based on augmented reality technology, targeting children aged 6 to 12. Their goal is to make learning fun and interactive.

• Industry Description and Outlook: Techie Toys reviewed multiple industry reports and found that the educational toy market has seen substantial growth over recent years, and this growth is expected to continue due to increasing focus on interactive learning methods. The integration of technology into educational toys, specifically augmented reality, is a significant trend shaping the industry.
• Target Market: Through surveys and focus groups, Techie Toys identified their target customers as parents of children aged 6 to 12 who value educational development and are comfortable with technology integration in toys. These parents have middle to upper-middle income, are mostly city dwellers, and are willing to invest in their children's education.
• Market Size and Trends: By analysing industry reports and sales of similar products, Techie Toys estimated a sizable target market for their augmented reality educational toys. The trend of "edutainment" was identified as a key market trend, with technology-based educational toys gaining popularity.
• Market Segmentation: Techie Toys segmented their market based on age (6-8, 9-12), type of toy preferred (science, math, language arts), and parents' willingness to spend on educational toys. They plan to tailor their products and marketing strategies according to these segments.
• Competitive Analysis: Techie Toys identified several key competitors offering educational toys but found a gap in those providing augmented reality-based learning. They also discovered that their unique selling proposition – interactive learning through augmented reality – is an aspect where they outshine their competitors.
• SWOT Analysis: Strengths identified included a strong development team, unique product offering, and alignment with market trends. Weaknesses involved a higher price point and lack of brand recognition. Opportunities included a growing market and a trend toward edutainment, while threats were potential competitors and rapid technological change.

By conducting this detailed market analysis, Techie Toys was able to effectively position itself within the market, identify its unique selling proposition, and tailor their product development and marketing strategy to their target audience. This comprehensive understanding of their market greatly contributed to their success.

The business plan market analysis section of a business plan is one of its most critical components. Conducting a detailed and accurate market analysis can be a challenging process, but as we've seen in our guide, the benefits are large. Business is all about planning and conducting an in-depth market analysis process, It will allow your business to navigate its environment with knowledge and foresight. The insight gained can help you identify growth opportunities and provide a strong basis for the development of effective marketing and sales strategies. Keep these insights, steps, and tips in mind as you work on your market analysis and remember markets are continually changing so don't make this a one-and-done exercise. If you are looking for help with other sections of the business plan, please check out our Learning Zone homepage.

• Starting a Business
• Growing a Business
• Small Business Guide
• Business News
• Science & Technology
• Money & Finance
• For Subscribers
• Write for Entrepreneur
• Entrepreneur Store
• United States
• Asia Pacific
• Middle East
• South Africa

Copyright © 2024 Entrepreneur Media, LLC All rights reserved. Entrepreneur® and its related marks are registered trademarks of Entrepreneur Media LLC

• Write Your Business Plan | Part 1 Overview Video
• The Basics of Writing a Business Plan
• How to Use Your Business Plan Most Effectively
• 12 Reasons You Need a Business Plan
• The Main Objectives of a Business Plan
• What to Include and Not Include in a Successful Business Plan
• The Top 4 Types of Business Plans
• A Step-by-Step Guide to Presenting Your Business Plan in 10 Slides
• 6 Tips for Making a Winning Business Presentation
• 3 Key Things You Need to Know About Financing Your Business
• 12 Ways to Set Realistic Business Goals and Objectives
• How to Perfectly Pitch Your Business Plan in 10 Minutes
• Write Your Business Plan | Part 2 Overview Video
• How to Fund Your Business Through Friends and Family Loans and Crowdsourcing
• How to Fund Your Business Using Banks and Credit Unions
• How to Fund Your Business With an SBA Loan
• How to Fund Your Business With Bonds and Indirect Funding Sources
• How to Fund Your Business With Venture Capital
• How to Fund Your Business With Angel Investors
• How to Use Your Business Plan to Track Performance
• How to Make Your Business Plan Attractive to Prospective Partners
• Is This Idea Going to Work? How to Assess the Potential of Your Business.
• When to Update Your Business Plan
• Write Your Business Plan | Part 3 Overview Video
• How to Write the Management Team Section to Your Business Plan
• How to Create a Strategic Hiring Plan
• How to Write a Business Plan Executive Summary That Sells Your Idea
• How to Build a Team of Outside Experts for Your Business
• Use This Worksheet to Write a Product Description That Sells
• What Is Your Unique Selling Proposition? Use This Worksheet to Find Your Greatest Strength.
• How to Raise Money With Your Business Plan
• Customers and Investors Don't Want Products. They Want Solutions.
• 5 Essential Elements of Your Industry Trends Plan
• How to Identify and Research Your Competition
• Who Is Your Ideal Customer? 4 Questions to Ask Yourself.
• How to Identify Market Trends in Your Business Plan
• How to Define Your Product and Set Your Prices
• How to Determine the Barriers to Entry for Your Business
• How to Get Customers in Your Store and Drive Traffic to Your Website
• How to Effectively Promote Your Business to Customers and Investors
• What Equipment and Facilities to Include in Your Business Plan
• How to Write an Income Statement for Your Business Plan
• How to Make a Balance Sheet
• How to Make a Cash Flow Statement
• How to Use Financial Ratios to Understand the Health of Your Business
• How to Write an Operations Plan for Retail and Sales Businesses
• How to Make Realistic Financial Forecasts
• How to Write an Operations Plan for Manufacturers
• What Technology Needs to Include In Your Business Plan
• How to List Personnel and Materials in Your Business Plan
• The Role of Franchising
• The Best Ways to Follow Up on a Buisiness Plan
• The Best Books, Sites, Trade Associations and Resources to Get Your Business Funded and Running
• How to Hire the Right Business Plan Consultant
• Business Plan Lingo and Resources All Entrepreneurs Should Know
• How to Write a Letter of Introduction
• What To Put on the Cover Page of a Business Plan
• How to Format Your Business Plan
• 6 Steps to Getting Your Business Plan In Front of Investors

How to Identify and Research Your Competition Emphasizing your competitive advantage is an essential part of any business plan.

By Eric Butow • Oct 27, 2023

Key Takeaways

• Why competitive analysis matters
• Questions to ask about your industry
• How to find similar companies

Opinions expressed by Entrepreneur contributors are their own.

This is part 2 / 8 of Write Your Business Plan: Section 4: Marketing Your Business Plan series.

Successful entrepreneurs are renowned for intuitively feeling a market's pulse, project trends before anyone else detects them, and identifying needs that even customers are unaware of. After you are famous, perhaps you can claim a similar psychic connection to the market. But for now, you'll need to reinforce your claims to market insight by presenting solid research in your plan.

Market research aims to understand the reasons consumers will buy your product. It studies consumer behavior, specifically how cultural, societal, and personal factors influence that behavior. For instance, market research aiming to understand consumers who buy in-line skates might study the cultural importance of fitness, the societal acceptability of marketing directed toward children and teens, and the effect of personal influences such as age, occupation, and lifestyle in directing a skate purchase.

Related: 4 Effective Ways To Accomplish This Missing Step That Most Entrepreneurs Overlook

Market research is often split into two varieties: primary and secondary. Primary research studies customers directly, whereas secondary research studies information others have gathered about customers. Primary research might be telephone interviews or online polls with randomly selected target group members. You can also study your own sales records to gather primary research. Secondary research might come from reports on other organizations' websites or blogs about the industry.

Conducting market research provides answers to those unknown elements. It will greatly reduce risk as you start your business. It will help you understand your competitive position and the strengths and weaknesses of your competitors. And it will improve your marketing and sales process."

Related: You Need Consumer Insights To Ensure The Success Of Your Business. Here Are Five Ways To Find Them.

Questions to Ask About Your Industry

To start preparing your industry analysis and outlook, dig up the following facts about your field:

• What is your total industry-wide sales volume? In dollars? In units?
• What are the trends in sales volume within your industry?
• Who are the major players and your key competitors? What are they like?
• What does it take to compete? What are the barriers to entry?
• What technological trends affect your industry?
• What are the main modes of marketing?
• How does government regulation affect the industry?
• In what ways are changing consumer tastes affecting your industry?
• What are recent demographic trends affecting the industry?
• How sensitive is the industry to seasons and economic cycles?
• What are key financial measures in your industry (average profit margins, sales commissions, etc.)?

Related: 5 Essential Elements of Your Industry Trends Plan

How to Find Similar Companies

Find a close match when looking at comparable businesses (and their data). For comparative purposes, consider:

• Companies of relative size.
• Companies serving the same geographic area could be global if you plan to be a web-based business.
• Companies with a similar ownership structure. If you are two partners, look for businesses run by a couple of partners rather than an advisory board of twelve.
• Relatively new companies. While you can learn from long-standing businesses, they may be successful today because of their twenty-five-year business history and reputation.

You will want to use the data you have gathered to determine how much business you could do and to figure out how you will fit into and adapt to the marketplace.

Related: How to Make Your Business Stand Out

How To Do Original Research

One limitation of in-house market information is that it may not include exactly what you're looking for. For instance, if you'd like to consider offering consumers financing for their purchases, it's hard to tell how they'd like it since you don't already offer it.

You can get around this limitation by conducting original research—interviewing customers who enter your store, for example, or counting cars that pass the intersection where you plan to open a new location—and combining it with existing data. Follow these steps to spending your market research dollars wisely:

Determine what you need to know about your market. The more focused the research, the more valuable it will be.

• Prioritize the results of the first step. You can't research everything, so concentrate on the information that will give you the best (or quickest) payback.
• Review less expensive research alternatives. Small Business Development Centers and the Small Business Administration can help you develop customer surveys. Your trade association will have good secondary research. Be creative.
• Estimate the cost of performing the research yourself. Keep in mind that with the internet you should not have to spend a ton of money. If you're considering hiring a consultant or a researcher, remember this is your dream, these are your goals, and this is your business.
• Don't pay for what you don't need.

Related: The One Simple Task That Will Help Your Startup Succeed

More in Write Your Business Plan

Section 1: the foundation of a business plan, section 2: putting your business plan to work, section 3: selling your product and team, section 4: marketing your business plan, section 5: organizing operations and finances, section 6: getting your business plan to investors.

Successfully copied link

• Search Search Please fill out this field.
• Building Your Business
• Becoming an Owner
• Business Plans

How to Write the Competitor Analysis Section of the Business Plan

Writing The Business Plan: Section 4

Susan Ward wrote about small businesses for The Balance for 18 years. She has run an IT consulting firm and designed and presented courses on how to promote small businesses.

The competitor analysis section can be the most difficult section to compile when writing a business plan because before you can analyze your competitors, you have to investigate them. Here's how to write the competitor analysis section of the business plan.

First, Find Out Who Your Competitors Are

If you're planning to start a small business that's going to operate locally, chances are you already know which businesses you're going to be competing with. But if not, you can easily find out by doing an internet search for local businesses, looking in the online or printed local phone book, or even driving around the target market area. 

Your local business may also have non-local competitors that you need to be aware of.

If you're selling office supplies, for instance, you may also have to compete with big-box retailers within a driving distance of several hours and companies that offer office supplies online. You want to make sure that you identify all your possible competitors at this stage.

Then Find Out About Them

You need to know:

• what markets or market segments your competitors serve;
• what benefits your competitors offer;
• why customers buy from them;
• as much as possible about their products and/or services, pricing, and promotion.

Gathering Information for Your Competitor Analysis

A visit is still the most obvious starting point - either to the brick and mortar store or to the company's website. Go there, once or several times, and look around. Watch how customers are treated. Check out the prices.

You can also learn a fair bit about your competitors from talking to their customers and/or clients - if you know who they are. Other good "live" sources of information about competitors include a company's vendors or suppliers and a company's employees. They may or may not be willing to talk to you, but it's worth seeking them out and asking.

And watch for trade shows that your competitors may be attending. Businesses are there to disseminate information about and sell their products or services; attending and visiting their booths can be an excellent way to find out about your competition.

You'll also want to search for the publicly available information about your competitors. Online publications, newspapers, and magazines may all have information about the company you're investigating for your competitive analysis. Press releases may be particularly useful. 

Once you've compiled the information about your competitors, you're ready to analyze it. 

Analyzing the Competition

Just listing a bunch of information about your competition in the competitor analysis section of the business plan misses the point. It's the analysis of the information that's important.

Study the information you've gathered about each of your competitors and ask yourself this question: How are you going to compete with that company?

For many small businesses, the key to competing successfully is to identify a market niche where they can capture a  specific target market  whose needs are not being met.

• Is there a particular segment of the market that your competition has overlooked?
• Is there a service that customers or clients want that your competitor does not supply? 

The goal of your competitor analysis is to identify and expand upon your competitive advantage - the benefits that your proposed business can offer the customer or client that your competition can't or won't supply.

Writing the Competitor Analysis Section

When you're writing the business plan, you'll write the competitor analysis section in the form of several paragraphs. 

The first paragraph will outline the competitive environment, telling your readers who your proposed business's competitors are, how much of the market they control and any other relevant details about the competition.

The second and following paragraphs will detail your competitive advantage, explaining why and how your company will be able to compete with these competitors and establish yourself as a successful business.

Remember; you don't have to go into exhaustive detail here, but you do need to persuade the reader of your business plan that you are knowledgeable about the competition and that you have a clear, definitive plan that will enable your new business to successfully compete.

How to Write a Competitor Analysis for a Business Plan (with AI in 2023)

Competitor analysis is a critical component of any business plan. It helps you understand the landscape of your industry, identify opportunities for growth and differentiation, and craft strategies that take advantage of your competitors' weaknesses.

Here's a step-by-step guide on how to conduct a comprehensive competitor analysis, including how to leverage AI tools like Bizway to make the process more efficient and effective.

Step-by-Step Guide to Performing a Competitor Analysis

1. identify your competitors.

Understanding your competitive landscape begins with pinpointing who your direct and indirect competitors are.

Points to Consider

• Direct Competitors : Those who offer similar products/services in the same market.
• Indirect Competitors : Businesses targeting your customer base with different offerings.
• Utilize market research and customer feedback to list competitors.
• Identify geographical considerations - local, regional, or global competitors.

2. Analyze Their Products/Services

A thorough examination of competitors’ offerings unveils potential areas for differentiation and enhancement in your product/service line.

• Feature comparisons.
• Pricing structures.
• Unique Selling Propositions (USPs).
• Adopt a customer-centric approach to understand how consumers perceive competitors’ offerings.
• Identify gaps in their product/service lines that you could explore.

3. Assess Their Marketing Strategy

Understanding competitors’ marketing approaches aids in crafting a superior, data-driven marketing strategy.

• Target audience.
• Key messages and value propositions.
• Channel effectiveness and presence.
• Use social listening tools to gauge their social media effectiveness.
• Analyze the SEO performance of competitors’ websites.

4. Examine Their Sales Strategy

Investigating sales channels and tactics employed by competitors reveals market penetration strategies and potential areas for diversification.

• Distribution channels.
• Pricing and sales tactics.
• Customer relationship management.
• Secret shop to observe sales tactics and customer experiences.
• Review customer feedback on their purchasing experience.

5. Analyze Their Strengths and Weaknesses

Identifying what competitors excel in and fall short on enables strategic decision-making in exploiting market opportunities.

• Operational efficiency.
• Customer service quality.
• Brand reputation and loyalty.
• Conduct a SWOT analysis (Strengths, Weaknesses, Opportunities, Threats) for each competitor.
• Leverage customer reviews and testimonials to gauge reputation.

Using AI for Competitor Analysis

Automated data collection.

AI automates the harvesting of data from myriad sources, ensuring robust research while saving time.

• Use AI tools to scrape and aggregate data from competitors' websites, social media, and customer review platforms.
• Ensure the data is categorized and stored systematically for easy analysis.

Real-Time Updates

AI provides a competitive edge by monitoring and reporting real-time updates on competitor activities.

• Set up AI monitoring for specific competitor activity: product launches, PR releases, or marketing campaigns.
• Ensure to leverage real-time data to inform swift strategic adjustments.

Predictive Analytics

Predictive analytics via AI deciphers patterns and anticipates future competitor moves, positioning your business proactively.

• Leverage AI to analyze historical data for predicting future trends.
• Utilize these insights to anticipate and formulate preemptive strategies.

Using Bizway for Competitor Analysis and Business Planning

One such AI tool that can revolutionize your competitor analysis process is Bizway . Bizway is an AI-powered business planning and research app that can help you research your competitors and write your entire competitor analysis with just a few clicks. Moreover, Bizway can assist you in writing your entire business plan, saving you time and providing you with expert-level planning documents.

With Bizway, you can automate the process of generating clear, concise planning docs across all areas of business, from an SEO Content Plan to User Onboarding Plan. It also helps fill knowledge gaps in areas of business you're not well-versed in.

So, whether you're a solopreneur, a small business owner, or an aspiring entrepreneur still in school, Bizway is the AI assistant you need to take your business planning to the next level.

Gerrard + Bizway AI Assistant

Start automating your business growth, today⚡

Create your first AI assistant & project in minutes.⚡

Bizway is brought to you by Landmark Labs Ltd.

©2024 Bizway Labs

Competitive Analysis for a Fashion Store (Example)

• May 10, 2024
• Business Plan , Competitive Analysis

A competitive analysis is not just a tool for gauging the position of your fashion store in the market and its key competitors; it’s also a fundamental component of your business plan.

This analysis helps in identifying your fashion store’s unique selling points, essential for differentiating your business in a competitive market.

In addition, the competitive analysis is integral in laying a solid foundation for your business plan. By examining various operational aspects of your competitors, you gain valuable information that ensures your business plan is robust, informed, and tailored to succeed in the current market environment.

Fashion Store Business Plan

Fully editable 30+ slides Powerpoint presentation business plan template.

Download an expert-built 30+ slides Powerpoint business plan template

Identifying Your Competitors in the Fashion Industry

Begin by identifying your direct and indirect competitors. This includes other fashion boutiques in your area, large retail chains, and online fashion stores. For example, if your store specializes in sustainable fashion, your direct competitors would include local boutiques that advertise eco-friendly apparel, as well as large online platforms known for sustainable fashion. Additionally, consider indirect competitors like second-hand clothes shops or generic retailers that offer a range of clothing options.

Leverage tools like Google Maps to understand the geographical distribution of these competitors. Customer review platforms like Yelp and TripAdvisor can provide insights into the strengths and weaknesses of these competitors based on consumer feedback. For instance, if a local boutique frequently receives praise for its customer service and exclusive designs, these are key strengths of that competitor.

Fashion Store Competitors’ Strategies

Analyzing the strategies of these competitors involves looking at several factors:

• Product Offerings: Evaluate the assortment of products they offer. If a nearby store, “Trendsetters,” is popular for its avant-garde fashion pieces, this might indicate a consumer interest in cutting-edge designs.
• Sourcing and Sustainability: Consider their sourcing practices and sustainability commitments. A competitor like “EcoWear,” which focuses on ethically sourced and produced clothing, might attract a niche market that values ethical consumption.
• Pricing Strategy : Examine how your prices compare to those of your competitors. Are your items priced similarly to those at “Budget Fashion Hub,” or do they align with more upscale boutiques?
• Marketing Tactics: Assess how your competitors market their products. Do they have a robust online presence, or do they focus on in-store promotions and local fashion events?
• Customer Experience: Review the shopping experience they provide. For instance, “Lux Style Boutique” might be known for its personalized styling services and luxury shopping environment, which could enhance the customer experience.
• Operational Efficiency: Look at whether competitors utilize technology or innovative processes to improve sales and customer engagement, such as “Fashion Forward” with its integrated online and physical shopping experience.

What’s Your Fashion Store’s Value Proposition?

Reflect on what makes your fashion store unique. Perhaps it is renowned for its exclusive local designer collections, or maybe it offers a unique blend of international and local fashion that isn’t available elsewhere in your area.

Identify market gaps through customer feedback and industry trends. For instance, a growing interest in sustainable and locally produced fashion could represent a significant market opportunity if your competitors are slow to adopt these practices.

Consider your location: A fashion store in a bustling city center might focus on trend-driven fast fashion to attract young urbanites, while a store in a more suburban setting might prioritize classic styles and personal customer service.

How To Summarize It All In Your Business Plan?

Competitors’ strategies and market positioning can be superposed with your own fashion store’s value proposition by laying out on a page (or a presentation slide) the main differentiating factors. These factors will show investors and banks:

• How each competitor is positioned in the market
• How your fashion store compares vs. competitors (what’s your value proposition )

In a competitive analysis, various parameters are used to compare and contrast your fashion store with its competitors. The parameters listed below are examples of what you might include in your analysis. 

They are not exhaustive but serve as a guide to help you understand key aspects to consider. Each parameter provides insights into different facets of the competitive landscape, helping to paint a comprehensive picture of where your fashion store stands.

Location greatly impacts the visibility, foot traffic, and overall attractiveness of your fashion store. A store in a bustling shopping mall or an upscale neighborhood can attract more high-spending customers, whereas a location in a suburban shopping center may appeal more to families looking for convenience.

Product Range

The diversity and uniqueness of your product range are crucial. Whether you’re offering exclusive designer pieces, a wide selection of casual wear, or specializing in niche markets like eco-friendly clothing, your product range should cater to the specific tastes and needs of your target market .

Target Market

Clearly defining your target market—whether you are catering to trendy young adults, busy professionals, or fashion-conscious seniors—guides many other aspects of your business strategy, from marketing campaigns to store layout and product selection.

Online Shopping

The availability of online shopping options can extend your store’s reach beyond local customers to a potentially global audience. Offering a seamless, user-friendly online shopping experience can be a major competitive advantage, particularly in the increasingly digital-first consumer market.

Square Footage

The size of your store affects not only the variety of products you can display but also the customer’s shopping experience. Larger stores might have the space for a broader range of products and a more comfortable shopping experience, while a smaller boutique might offer a more curated and personalized approach.

Special Features

Any special features that enhance the shopping experience can be a significant differentiator. This might include a VIP shopping area, personal styling services, or interactive fitting rooms with smart mirrors that suggest outfits and accessories.

Whether your store is part of a franchise can influence customer expectations and brand recognition. Franchises might benefit from national marketing and established brand loyalty, whereas independent stores can capitalize on local branding and unique product offerings.

Other Comparison Factors

Additional elements to enhance your competitive analysis might include:

• Customer Service Quality: Assessing the level and quality of customer service offered by competitors, which can include return policies, staff responsiveness, and in-store amenities.
• Marketing Strategies : Analyzing how competitors use digital marketing, influencer partnerships, and traditional advertising to reach their target market.
• Pricing Strategies: Understanding the pricing levels of competitors helps in positioning your products to attract your chosen target market without sacrificing profitability.
• Store Design and Layout: Evaluating the attractiveness and functionality of competitors’ store designs can provide insights into trends that enhance customer engagement.
• Sustainability Practices: In the fashion industry, sustainability can be a significant differentiator. Reviewing competitors’ efforts in sustainable sourcing and ethical practices might highlight an area where your store could stand out.

Privacy Overview

Butcher Shop Business Plan Template

Written by Dave Lavinsky

Butcher Shop Business Plan

Over the past 20+ years, we have helped over 1,000 entrepreneurs and business owners create business plans to start and grow their butcher shops. On this page, we will first give you some background information with regards to the importance of business planning. We will then go through a butcher shop business plan template step-by-step so you can create your plan today.

Download our Ultimate Business Plan Template here >

What is a Butcher Shop Business Plan?

A business plan provides a snapshot of your butcher shop as it stands today, and lays out your growth plan for the next five years. It explains your business goals and your strategy for reaching them. It also includes market research to support your plans.

Why You Need a Business Plan for a Butcher Shop

If you’re looking to start a butcher shop, or grow your existing butcher business, you need a business plan. A business plan will help you raise funding, if needed, and plan out the growth of your butcher shop in order to improve your chances of success. Your business plan is a living document that should be updated annually as your company grows and changes.

Sources of Funding for Butcher shops

With regards to funding, the main sources of funding for a butcher shop are personal savings, credit cards, bank loans and angel investors. With regards to bank loans, banks will want to review your business plan and gain confidence that you will be able to repay your loan and interest. To acquire this confidence, you will not only want to confirm that your financials are reasonable, but they will also want to see a professional plan. Such a plan will give them the confidence that you can successfully and professionally operate a business. Personal savings and bank loans are the most common funding paths for social media marketing businesses.

Finish Your Business Plan Today!

How to write a business plan for a butcher shop.

Below we detail what should be included with each section of your business plan for a butcher shop.

Executive Summary

Your executive summary provides an introduction to your business plan, but it is normally the last section you write because it provides a summary of each key section of your plan.

The goal of your Executive Summary is to quickly engage the reader. Explain to them the type of meat shop you are operating and the status. For example, are you a startup, do you have a butcher shop that you would like to grow, or are you operating a chain of independent butcher shops?

Next, provide an overview of each of the subsequent sections of your plan. For example, give a brief overview of the meat industry. Discuss the type of butcher shop you are operating. Detail your direct competitors. Give an overview of your target market. Provide a snapshot of your marketing plan. Identify the key members of your team. And offer an overview of your financial plan.  

Company Analysis

In your company analysis, you will detail the type of butcher shop you are operating.

For example, you might operate one of the following types of butcher businesses:

• Deli Butcher Shop : this type of meat shop specializes in cutting deli meats in small quantities for single or family size servings.
• Specialty Butcher Shop: this type of meat shop focuses on cutting specific meats such as wild game animals; their clients are usually hunters or fishermen.
• Abattoir Butcher: this type of meat shop specializes in cutting meats in wholesale sizes at abattoir/slaughterhouse.

In addition to explaining the type of butcher business you will operate, the Company Analysis section of your business plan needs to provide background on the business.

Include answers to question such as:

• When and why did you start the business?
• What milestones have you achieved to date? Milestones could include the number of customers served, number of positive reviews, total weight of fresh meat cuts, etc.
• Your legal structure. Are you incorporated as an S-Corp? An LLC? A sole proprietorship? Explain your legal structure here.

Industry Analysis

In your industry analysis, you need to provide an overview of the meat industry.

While this may seem unnecessary, it serves multiple purposes.

First, researching the meat industry educates you. It helps you understand the market in which you are operating.

Secondly, market research can improve your strategy, particularly if your research identifies market trends.

The third reason for market research is to prove to readers that you are an expert in your industry. By conducting the research and presenting it in your plan, you achieve just that.

The following questions should be answered in the industry analysis section of your meat shop business plan:

• How big is the meat and poultry industry (in dollars)?
• Is the market declining or increasing?
• Who are the key competitors in the market?
• Who are the key suppliers in the market?
• What trends are affecting the industry?
• What is the industry’s growth forecast over the next 5 – 10 years?
• What is the relevant market size? That is, how big is the potential market for your butcher shop? You can extrapolate such a figure by assessing the size of the market in the entire country and then applying that figure to your local population.

Customer Analysis

The customer analysis section must detail the customers you serve and/or expect to serve.

The following are examples of customer segments: individuals, families, deli shops, grocery stores, restaurants and fast food suppliers.

As you can imagine, the customer segment(s) you choose will have a great impact on the type of business you operate. Clearly, a family would respond to different marketing promotions than fast food supplier, for example.

Try to break out your target market in terms of their demographic and psychographic profiles. With regards to demographics, include a discussion of the ages, genders, locations and income levels of the customers you seek to serve. Because most butcher shops primarily serve customers living in their same city or town, such demographic information is easy to find on government websites.

Psychographic profiles explain the wants and needs of your target customers. The more you can understand and define these needs, the better you will do in attracting and retaining your customers.

Finish Your Butcher Shop Business Plan in 1 Day!

Don’t you wish there was a faster, easier way to finish your business plan?

With Growthink’s Ultimate Business Plan Template you can finish your plan in just 8 hours or less!

Competitive Analysis

Your competitive analysis should identify the indirect and direct competitors your business faces and then focus on the latter.

Direct competitors are other butcher shops.

Indirect competitors are other options that customers have to purchase from that aren’t direct competitors. This includes delis, supermarkets and grocery stores.

With regards to direct competition, you want to describe the other butcher shops with which you compete. Most likely, your direct competitors will be house flippers located very close to your location.

For each such competitor, provide an overview of their businesses and document their strengths and weaknesses. Unless you once worked at your competitors’ businesses, it will be impossible to know everything about them. But you should be able to find out key things about them such as:

• What types of customers do they serve?
• What types of meats do they specialize in?
• What is their pricing (premium, low, etc.)?
• What are they good at?
• What are their weaknesses?

With regards to the last two questions, think about your answers from the customers’ perspective. And don’t be afraid to ask your competitors’ customers what they like most and least about them.

The final part of your competitive analysis section is to document your areas of competitive advantage. For example:

• Will you provide a wider variety of meat options?
• Will you provide special discounts or perks for new or returning customers?
• Will you provide the highest quality meat?
• Will you offer better pricing?

Think about ways you will outperform your competition and document them in this section of your plan.  

Marketing Plan

Traditionally, a marketing plan includes the four P’s: Product, Price, Place, and Promotion. Your marketing plan should include the following:

Product : In the product section, you should reiterate the type of meat shop that you documented in your Company Analysis. Then, detail the specific meat products you will be offering. For example, will other food options such as side dishes?

Price : Document the prices you will offer and how they compare to your competitors. Essentially in the product and price sub-sections of your marketing plan, you are presenting the services you offer and their prices.

Place : Place refers to the location of your business. Document your location and mention how the location will impact your success. For example, is your business located in a busy retail district, or a highly trafficked area? Discuss how your location might be the ideal location for your customers.

Promotions: The final part of your marketing plan is the promotions section. Here you will document how you will drive customers to your location(s). The following are some promotional methods you might consider:

• Advertising in local papers and magazines
• Reaching out to local websites
• Social media marketing
• Local radio advertising

Operations Plan

While the earlier sections of your meat shop business plan explained your goals, your operations plan describes how you will meet them. Your operations plan should have two distinct sections as follows.

Everyday short-term processes include all of the tasks involved in running your butcher shop, including cutting meats, tracking inventory, and completing orders and sales for customers.

Long-term goals are the milestones you hope to achieve. These could include the dates when you expect to have X number of customers, or when you hope to reach $X in revenue. It could also be when you expect to expand your business to a new city.  

Management Team

To demonstrate your butcher shop’s ability to succeed, a strong management team is essential. Highlight your key players’ backgrounds, emphasizing those skills and experiences that prove their ability to grow a company.

Ideally you and/or your team members have direct experience in food service management. If so, highlight this experience and expertise. But also highlight any experience that you think will help your business succeed.

If your team is lacking, consider assembling an advisory board. An advisory board would include 2 to 8 individuals who would act like mentors to your business. They would help answer questions and provide strategic guidance. If needed, look for advisory board members with experience in overseeing supermarkets or grocery stores or successfully running their own business.  

Financial Plan

Your financial plan should include your 5-year financial statement broken out both monthly or quarterly for the first year and then annually. Your financial statements include your income statement, balance sheet and cash flow statements.

Income Statement : an income statement is more commonly called a Profit and Loss statement or P&L. It shows your revenues and then subtracts your costs to show whether you turned a profit or not.

In developing your income statement, you need to devise assumptions. For example, will you only cut meats in small portions or in large quantities for other businesses such as a supermarket? And will sales grow by 2% or 10% per year? As you can imagine, your choice of assumptions will greatly impact the financial forecasts for your business. As much as possible, conduct research to try to root your assumptions in reality.

Balance Sheets : Balance sheets show your assets and liabilities. While balance sheets can include much information, try to simplify them to the key items you need to know about. For instance, if you spend $50,000 on building out your meat shop, this will not give you immediate profits. Rather it is an asset that will hopefully help you generate profits for years to come. Likewise, if a bank writes you a check for $50,000, you don’t need to pay it back immediately. Rather, that is a liability you will pay back over time.

Cash Flow Statement : Your cash flow statement will help determine how much money you need to start or grow your business, and make sure you never run out of money. What most entrepreneurs and business owners don’t realize is that you can turn a profit but run out of money and go bankrupt.

In developing your Income Statement and Balance Sheets be sure to include several of the key costs needed in starting or growing a meat shop:

• Location build-out including design fees, construction, etc.
• Cost of equipment and supplies
• Payroll or salaries paid to staff
• Business insurance
• Taxes and permits
• Legal expenses

Attach your full financial projections in the appendix of your plan along with any supporting documents that make your plan more compelling. For example, you might include your office location lease or blueprints for your shop.  

Putting together your own business plan for your butcher shop is a worthwhile endeavor. If you follow the template above, by the time you are done, you will have an expert business plan (download it to PDF to show banks and investors). You will really understand the meat and poultry industry, your competition, and your customers. You will have developed a marketing plan and will really understand what it takes to launch and grow a successful butcher shop.  

Butcher Shop Business Plan FAQs

What is the easiest way to complete my butcher shop business plan.

Growthink's Ultimate Business Plan Template allows you to quickly and easily complete your Butcher Shop Business Plan.

What is the Goal of a Business Plan's Executive Summary?

The goal of your Executive Summary is to quickly engage the reader. Explain to them the type of butcher shop you are operating and the status; for example, are you a startup, do you have a butcher shop that you would like to grow, or are you operating a chain of butcher shops?

Don’t you wish there was a faster, easier way to finish your Butcher Shop business plan?

OR, Let Us Develop Your Plan For You

Since 1999, Growthink has developed business plans for thousands of companies who have gone on to achieve tremendous success.   Click here to see how Growthink’s professional business plan consulting services can create your business plan for you.

Other Helpful Business Plan Articles & Templates