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Conduct a Small Business Competitive Analysis in 4 Easy Steps

Read Time: 5 Minutes

Last Updated: 12 July, 2023

Introduction

Starting a business can feel like a lot to handle, but don’t stress! There’s an easy way to give yourself a leg up. Take a peek at what your competition is up to and pick up on their successes and mistakes. This will give you insight into what works best in your industry and will save you a ton on hiring a marketing agency to figure it out for you. As a sharp-minded small business owner, it’s crucial to watch your finances.

This blog will help you conduct a Small Business competitive analysis

Gain insights and guidance for conducting a Small Business competitive analysis with this blog.

What is a Competitor Analysis?

Conducting a competitor analysis, also known as a competitive analysis, involves identifying the players in your industry and studying the various marketing strategies they employ. This exercise can provide valuable insights for evaluating your company’s strengths and weaknesses in comparison to your rivals.


This information will help you identify any gaps in the market that you can leverage to your advantage. Armed with this knowledge, you can make informed decisions about how to market your products or services by adopting some of the tactics that work well for your competitors.


Why Should I do a Competitor Analysis?

Starting a new business venture is a daunting and stressful experience. With numerous tasks at hand, initiating operations can be the most challenging phase. According to Melissa’s valuable recommendation (Melissa, 2020), conducting a competitor analysis is a crucial part of your business strategy. It involves researching and gaining insights into your competitors’ activities, including product offerings, sales efforts, SEO, marketing tactics, and social media engagement. This comprehensive understanding helps you identify gaps in the market that you can exploit for your advantage. Armed with this knowledge, you can make informed decisions on how to promote your products or services by incorporating effective tactics used by your competitors. By emulating their successful methods, you increase your chances of excelling in your industry.

Competitor analysis serves two primary purposes: establishing benchmarks and revealing potential opportunities.

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Establishing Benchmarks

Competitor analysis helps in setting benchmarks by providing insights into industry standards and best practices. By analyzing your competitors’ strategies, you can identify the most suitable social media platforms for your business, determine the recommended frequency of blog posts, and understand the prevailing norms in your industry. This information allows you to align your own business strategies and goals with the industry benchmarks, ensuring that you are competitive and up-to-date with the latest trends.
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Revealing Potential Opportunities

Competitor analysis helps in identifying potential business opportunities by examining your competitors’ strengths and weaknesses. By studying customer feedback and reviews, particularly those related to your competitors’ products or services, you can uncover areas where they may be falling short. These gaps in the market present opportunities for you to develop innovative solutions that address customers’ needs and desires. By leveraging this information, you can position your business as a preferred alternative, offering superior value and capturing a larger market share.

4 Simplified Steps to Conduct a Competitor Analysis

By following these simplified steps, you can gain valuable insights into your competitors’ strategies, set benchmarks for your own business, and uncover potential opportunities to thrive in the market.

Step 1: Identify your main competitors

Make a list of 3-5 direct competitors offering similar products or services in your industry and geographical competitive location.

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Step 2: Gather information

Collect data on your competitors’ websites, social media profiles, marketing materials, product offerings, pricing, and customer reviews.

Step 3: Analyze online presence, strategies, products/services, and feedback

Evaluate competitors’ websites, blogs, and social media accounts. Assess metrics like follower count, engagement, content quality, marketing tactics, offerings, pricing, unique selling points, and customer reviews to identify areas of improvement and potential opportunities.

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Step 4: Identify benchmarks and opportunities

Compare your findings to industry standards and uncover gaps in the market. Seek opportunities to differentiate your business, innovate, and enhance customer experiences based on your competitors’ weaknesses and unaddressed pain points.


Key Takeaways

  • A Competitor Analysis identifies what your competition is doing! and helps you be one step ahead!
  • You should identify three to five local competitors.
    • You should focus your research on where you make your money. If it’s your local town or another country.
      • Follow the crumbs (Where you make money as you need to compete within than geographical location).
  • These are the three reasons why you should create a Competitive Analysis Report
    • Establish Benchmarks that your industry expects.
    • Potential Opportunities for your business to seize.

Summary

By the end of this blog, you’ll be equipped with the necessary tools to conduct a comprehensive competitor analysis. Understand the significance of this process and leverage your unique selling points to elevate your business.

Unfortunately, many businesses overlook the benefits of competitor analysis. However, by conducting one, you can identify industry benchmarks, learn from your competitors’ achievements, and discover ways to surpass their performance.

The advantages are evident: gain insights into effective branding, target the right social channels, and explore SEO tactics. Seize this crucial opportunity to foster the growth of your small business!

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Works Cited/ Resources