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Without a clear view of the playing field, there is a good chance you’re going to move forward with the wrong (or incomplete) strategies. To predictably win in your industry, you need current, relevant competitive intelligence. Regular, effective competitor analysis will help you achieve this success.

Competitive analysis starts with data collection. Sourcing and making sense of data will directly impact the ultimate action(s) you take. And, of course, meaningful action is the goal of your competitive intelligence efforts.

Read on to learn more about how to conduct a competitor analysis and the clear advantages it can provide.

🔎 Related: Better Understand Your Competitors Today: Download Our Analysis Template

Analyzing Competitors: The Process

Before any stage of analysis can begin, you need to understand what you’re looking for and vet your sources. Even with a competitive intelligence (CI) tool that automates low-value work, you need a comprehensive understanding of what data is needed and where you are likely to find it. Do this work and your research will yield immense dividends, delivering data you can actually put to use. 

You or your team needs to begin by asking:

  • What digital properties do our competitors maintain?
  • What publications write the most relevant information about our industry?
  • Which news outlets have the best coverage of our field?
  • What demographic is our competitor targeting?
  • Where is our competitor buying ads or publishing social content?
  • Which databases of content are most worth subscribing to/paying for?
  • Which free databases can we use to find the most of the information we need?

What is Competitive Analysis and How to Do it?

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You want to be thorough when identifying your potential data sources. Some businesses rely on the data from the IMF for competitor analysis; others count on what they find in TechCrunch for competitor analysis. You know what relates most to your business. There are endless opportunities and data sources available so choose wisely.

Start with identifying the key sources you will draw from in your first stage of competitor analysis.

Stage 1: Data Collection for Competitor Analysis

Once you know the “who” (are your top competitors) and “where” (you will find data on them), you can begin. Data collection is an arduous process. Bottom line? Most people need software to automate it. There are software systems that collect raw data, which you then have to sift through. There are also interfaces that can categorize the data for you, and raise important information up to your attention immediately. 

Many tools share collected data via dashboards or another some other visualization so analysts are able to quickly review data collected and it's organization. Letting a software tool harvest all of the data you might need, in real time, so you never miss a thing is a best practice. 

Collected data, even data well-presented competitive analysis tools, still needs human analysis before unlocking their value. This is stage 2.

Stage 2: Competitor Data Analysis

Analyzing competitor data by drilling down into comparisons, contrasts, scale of relevance and other key metrics. This analysis is about “what the data says” (not yet what it means; that’s coming next). For instance, if you are tracking competitive hiring or competitor SEO, this stage is just gathering the types of open positions or keywords used. 

Ask yourself, what has actually occurred? If a competitor has made a sizable investment in say  a large increase in staff or increased their as spend on a new product, these are the type of  observations you want to assemble and line up at this stage. Once you know you have a comprehensive understanding of something that happened, it's time to dive in and determine what it means.

Stage 3: Competitor Data Interpretation

Stage 3 is your "So what" stage. Interpreting competitor data is the step that establishes why the facts matter to your business. Having a firm grasp of why an action matters, allows you to prepare to forecast what the future might hold. Conducting your competitive intelligence this way, is how you move from being reactive to executing a proactive strategy. 

During your competitor data interpretation as you’re analyzing your information and getting to the heart of the matter, you might ask:

  • What do major staffing changes mean?
  • What does a highly-funded ad strategy represent?
  • What is a new product going to do to the marketplace?
  • How is this investment going to change what is true today?

You can see both the quality (source)  and quantity of your collected data are very important. If you have irrelevant or unreliable data, or if you simply have too much of it, you’ll spend too much time and resources before getting to this most meaningful stage of competitor analysis. Stymied in that way, your CI efforts are fruitless.

At Cipher, we regularly see businesses give up on their CI practice as they work through this third stage. When a company spends too much time in stages one and two with say manual data collection, they are more likely to lack the resources needed to to interoperate the meaning of the data collected. (The juice just isn't worth the squeeze.) Unfortunately, this also means they never get to the all-important action stage of strategy.

The Complete Guide to Competitor Analysis Research, Data and Information Sources

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Stage 4: Strategic Reactions to Competitor Analysis

The last stage of competitor analysis should be all about action. As aforementioned, the desire any CI practice is to operate in a proactive way. Great competitor analysis defines direct competitors, indirect competitors and your position in the competitive landscape. All of this knowledge can give you both global and granular views of what is occurring and how you can make strategic, winning moves.

Many times, CI will highlight patterns of behavior in your competitors. The frequency with which they do something, or how they respond to external forces, can provide you with the interpretation needed to stay or move ahead of your competition. The last thing you want is to find something out about your competitors on the morning news. Consistent, comprehensive competitor analysis will ensure that you are not in the dark about the things that matter for your business. And, when you plan your strategy, you'll do it with knowledge and insight into how the market will respond.

Competitive Intelligence: Consultants and Tools for Success

Cipher is committed to furthering your ability to successfully complete competitor analysis. Competitive intelligence has been a pillar of global marketplaces since the 1970s. Organizational intelligence collection is a cornerstone of any successful business: and it has to be a part of yours. If you’ve tried and failed or simply realize your CI needs improvement, contact us to learn more about our services. We have the guidance tools you need to succeed.

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