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The Market and Competitive Intelligence (M/CI) world is full of terms with subtle differences in both definition and usage. Competitive analysis is one such term. It is distinct from competitor analysis, and also from terms like market intelligence, competitive intelligence, and business intelligence. 

Competitive analysis plays a central role in the work of any successful M/CI function. The insights obtained from a comprehensive competitive analysis can have multiplicative effects on strategy and put your business in a position of long-term strength. 

But what exactly do we mean when we talk about competitive analysis? Here’s a brief definition:

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Competitive Analysis: a Brief Definition

A competitive analysis is a comprehensive evaluation of your entire competitive set. It evaluates competitor’s strengths and weaknesses, summarizes their products and services, and outlines their key strategies.

The insights from a competitive analysis enable companies to design strategies to outperform the competition and give them a competitive advantage. 

Competitive analysis should be an ongoing process, not a one-off project. By tracking the competitive environment in real-time, M/CI teams can ensure their company is always positioned to capitalize on new opportunities and defend against competitive threats. 

Frequently Asked Questions About Competitive Analysis

At Cipher, we receive a lot of questions about competitive analysis. Here are some of the most common:

  1. What’s the difference between competitive analysis and competitor analysis?
  2. Why should I do competitive analysis?
  3. What’s the best way to do competitive analysis?
  4. What tools do I need to do competitive analysis?
  5. Where can I learn how to do competitive analysis?

1. What’s the Difference Between a Competitive Analysis and a Competitor Analysis?

Simply put, a competitive analysis provides an overview of all of a company’s competitors, while a competitor analysis looks at one competitor in great detail. 

In fact, one of the best ways to build a competitive analysis is to stitch together competitor analyses of all of your key competitors. Make sure to include direct, indirect, and tertiary competitors when doing this. 

Competitor analysis will typically make use of tools like SWOT Analysis, Porter’s 5 Forces, and the Business Model Canvas

In comparison, a competitive analysis will use frameworks like perceptual maps and market matrices that summarize the current status of all relevant competitors on any given performance metric.

2. Why Should I do a Competitive Analysis?

The rationale for undertaking a competitive analysis is clear: to stay up to date on competitive trends and ensure that your own company is always has a competitive advantage.

In your own business, it’s likely that new products or services are constantly being developed, strategies are being updated, and roadblocks are being hit. These dynamics apply to most businesses. Your competitors are no different and are constantly evolving in response to the dynamics of the marketplace. To stay one step ahead, and avoid being surprised by any significant competitor activity, it’s crucial that your competitive analysis is an ongoing process.

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3. What’s the Best Way to do Competitive Analysis?

The most comprehensive competitive analyses use established frameworks, high-quality data sources, sophisticated software, and a team of expert CI professionals. If you’re conducting a competitive analysis for the first time, this can often seem overwhelming, and it’s hard to know where to start. Competitive analysis is typically conducted in four stages. Here is the process:

Data Collection - effective competitive analysis incorporates data from a wide variety of sources. The best way to do this is to make use of an M/CI software platform with built-in data integrations and the ability to categorize that data for you.
  1. Data Analysis - once a M/CI team is armed with sufficient data, begin considering key metrics and looking for patterns in the data. Make deliberate choices about which data is the most valuable, and build dashboards that effectively display this data in real-time.

  2. Data Interpretation - contextualize the data and interpret what it means in terms of the competitive landscape and your company’s role within it. The data will tell you what has happened, but it won’t necessarily tell you why it’s happened, or what it means - that’s your job.

  3. Strategic Reaction - the goal of any competitive analysis is to produce insights that inform the strategy of the company. Make sure the findings of the competitive analysis are shared widely with key decision makers, focusing primarily on high-level, actionable insights. 

Related: What Goes Into a Competitive Analysis?

4. What Tools do I Need to do Competitive Analysis?

Effectively conducting competitive analysis doesn’t require a vast arsenal of tools. In fact, it’s better to keep things as simple as possible. 

Our suggestion: streamline the competitive analysis process by using a centralized M/CI platform like Knowledge360Ⓡ. It has built in integrations with all major data sources, sophisticated analysis tools, and acts as a centralized, real-time dashboard to which the whole business can refer. 

5. Where Can I Learn How to do Competitive Analysis?

While there are specialized programs at universities that focus on market and competitive intelligence, there’s no shortage of free online resources that will help you learn how to conduct a comprehensive competitive analysis, including Cipher’s very own Competitor Analysis Resource Center.

Here, you’ll find tools including The Ultimate Competitor Analysis Template, and our Complete Guide to Competitive Research, Data, and Information Sources

If you’re in need of more advanced support, get in touch with our Competitive Analysis Consultants, who are well-equipped to set up your organization for success. 

Final Thoughts on Competitive Analysis

The business world is moving at a faster pace than ever before, Rapidly evolving customer demands, significant industry changes, and emerging opportunities are the new normal. For businesses to successfully compete in this environment, competitive analysis is a must.

Only by conducting competitive analysis on an ongoing basis can businesses actively track the key activities of their competitors and the wider market and position themselves for success. 

To learn more about competitive analysis, check out our new Competitive Analysis Resource Center.

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Read Now: Finding Success in the World of Competitive Analysis