Competitive analysis is the process of using competitive intelligence to analyze the strengths and weaknesses of a company's marketplace competitors.
All information gathered in competitive intelligence is obtained legally and ethically and is taken from information available to the public.
There are different applications of competitive analysis for both short-term and long-term strategies, and it can be applied differently to each functional area of a company.
Why is competitive analysis important in marketing?
Gathering competitive intelligence and performing a competitive analysis should be a part of every marketer's strategy. This practice can save a business many resources, including time and money.
Companies can use this information to benchmark against their competition. They can find out to see what strategies have worked and what have failed for other companies in their industry.
This cross-examination of marketing practices also allows marketers to more effectively differentiate their business offers from those of their competitors.
Uncovering competitive advantages
One of the biggest value drivers a company has is its competitive advantages. Aggregating competitive intelligence can aide companies in establishing their own competitive advantage.
Learning about a competitor's products and services through competitive analysis can provide insight on the value they offer. This helps reveal how businesses can differentiate their products to provide additional value.
When companies are constructing social media campaigns, a good place to begin is by looking at what their competitors are doing. This way, marketers are ahead of the curve because they already know which channels reach consumers, what kind of content produces the most engagement, and the channels not being used by the competition that are available for capitalization.