5 Minute Read

Every football team thinks they have a great plan when they’re walking out of the locker room. They know every play. They’ve practiced every pass. They’ve even planned how to celebrate after they win. 

But only one team will emerge as the winners in that game. The other team will go home with their game plan in tatters, their celebration plans on ice.

Failure doesn’t always mean your plan was bad. Sometimes, it’s just that the other team’s plan was better. 

Of course, great coaches know this, and they include opposition research (often called scouting) as part of their planning. Enterprise leaders know this too, which is why leading companies include competitor intelligence in their business plan. 

-- Article Continues Below --

New call-to-action

Help bring structure to your competitor analysis research with our free template!

Why Competitor Analysis Belongs in a Business Plan

Most business plans contain a great deal of market analysis. Often, this contains some information or insights about rival companies and products. In some cases, it’s a set of bullet points, offering a whistle-stop tour of the competitive landscape. 

If your business plan looks like this, you may need to take a step back. Does your plan do enough to examine your competition? Have you talked about how you plan to deal with rival firms encroaching on your market? Have you identified opportunities to steal territory from other companies? And what about Amazon...? 

Competitor analysis is a targeted study of rival firms. Using Competitive Intelligence (CI) techniques, you can get a granular understanding of a competitor’s products, pricing, strategy, and structure. When you have this kind of information, you’ll be able to give accurate answers to questions like: 

  • Which companies sell products similar to ours? 
  • What’s the current market like for such products? 
  • How do we plan to differentiate from rival players? 
  • What are the opportunities and threats facing competitors? 

As well as preparing you for a competitive marketplace, CI can help you show that your business plan is viable. After all, if your competitors are currently operating in a healthy target market, then it proves the market exists and is profitable. 

CI is the nitty-gritty, real-world information that adds heft to your business plan. When decision-makers review your proposal, they’ll get a strong sense of the size and nature of the current market. They’ll also see whether it will be difficult to get started or if customers are crying out for a new entrant. 

How to Add Competitor Analysis to Your Business Plan 

To include CI in your business plan, you need to do two things. First, you have to conduct intense competitor analysis and learn as much as possible about your direct competitor. Second, be prepared to reconsider your business plan and marketing strategy to ensure you’re prepared for competitor challenges. 

1. Identify Your Direct and Indirect Competitors

You probably know your main rivals, but do you know every player in the market? Have you identified companies that might be about to move into this space? 

You can perform an exhaustive search for rivals by looking at data sources like: 

  • Primary research: Conduct interviews and one-to-ones with potential customers to find out what services they use. Try to dig deep and find out what needs are being addressed by these rivals. 
  • Field research: Your people - especially your salespeople - can conduct some valuable competitor research when interacting with a potential customer. Listen to what they’re interested in, what they’re excited about, and try to get data about possible rivals. 
  • Social media: Social media is a great way to track down businesses that operate in your target market space. Follow relevant hashtags and see who’s talking about your industry. 

When you’ve identified your competition, you can start to categorize them according to factors like industry, capabilities, size, and locale. When you do this, you’ll start to identify clusters of competitors that each pose a different threat or opportunity.  

2. Gather Data About Competitors

Now that you know who your major competitors are, you can start to learn more about them. For each rival, you’ll need to build a dossier that includes data from multiple sources: 

  • Official company sources: Each competitor will publish extensive information on their main channels, such as social media and their corporate blog. Keep an eye out also for things like press releases and job listings. 
  • News and discussion: Third parties will discuss your rivals on various channels, including news reports, blog posts, social media, and review sites. Keep an eye here for insight, analysis - and tidbits of gossip. 
  • Regulatory filings: Competitors have to file documents that give you a peek into their inner workings. Financial reports, lab tests, safety reports, patent filings - all of these are rich sources of data.  

Combine this data with data from your primary research and field research, and soon you’ll have a detailed overview of each competitor. 

3. Analyze Data for Relevant Information

Now, you’ll need to turn this data into actionable information. A competitor SWOT analysis is a great technique for creating order among disparate data sources. This means using each data point to build a picture of: 

  • Competitor's Strength: What are the key differentiators that help your competitor to stand out in the market?
  • Competitor's Weakness: Where is your competitor underperforming? Are there any vulnerabilities that could cause them to lose clients?
  • Opportunities: What’s the most likely next step for your competitor? Do they have any obvious options that they are likely to pursue? 
  • Threats: What’s the biggest concern for your rival? During Covid, for instance, many companies experienced substantial supply chain issues. 

Read the Guide: What is Competitive Analysis and How to Do it?

Find success in the world of competitive analysis

Read the Guide

When you perform a SWOT analysis on a rival, you’ll be better equipped to devise your own strategy for offense and defense. 

4. Review Your Objectives in Light of Your Competitor Analysis

Now you know about the opposition, what are you going to do about it? 

In some instances, you may need to go back to the drawing board. If your rivals have an insurmountable advantage, you might not have a clear path to viability. It happens, and it’s best to understand this at the outset, rather than learn the hard way. 

But most of the time, your competitor analysis will help get a better glimpse of your own strengths and weaknesses. Go through each section of your business plan and ask these questions: 

  • Do we have differentiators that will help us to compete? 
  • Have we addressed any obvious weaknesses that competitors could use against us? 
  • Is there a clear market opportunity for our proposal? Have we identified an audience that is underserved by the competition? 
  • If we’re directly competing for market share, do we have a fighting chance of winning? 

When you’ve addressed all of these questions, your competitor analysis business plan will start to seem a lot more viable. 

5. Keep Monitoring Your Competitor Analyses 

Your competitor analysis business plan should be responsive. For instance, if market conditions suddenly change, you’ll go back and review your plans. 

Competitors are constantly changing. They’re always looking for opportunities to grow, while also trying to deal with their own challenges. This means you need to keep looking for ways to stay ahead of them and gain a competitive advantage. 

Set up a process to keep on top of all of the changing market factors. Your process should look something like this: 

  • Set up a CI function: CI doesn’t have to be on a per-project basis. You can collaborate with other teams to establish an interdepartmental CI function that gathers information for sales, marketing, HR, IT, and product development. 
  • Respond to changes: When there’s a substantial shift in the marketplace, you’ll need to respond accordingly. Have a process to review your plans and react accordingly. 
  • Discuss with stakeholders: If your stakeholders have already signed off on the plan, they’ll want to know about any changes to the proposal. A regular CI meeting can help you cascade this information. 

The Next Level of Competitor Analysis

As long as you have competitors, you’ll need competitor analysis. Part of your long-term business strategy should involve setting up a permanent CI function that is always watching for changes in the marketplace. 

It’s easier with the right tools. A great CI platform can: 

  • Collate and organize competitor data for all to use
  • Aid researchers and analysts analyze data and discover relevant trends
  • Help generate meaningful information that leads to better decision making
  • Allow everyone in the organization to collaborate on CI activity

Knowledge 360 is an AI-powered platform that can automate most of the work involved in competitor analysis. Take a look at the available features, or book a demo today.