In the opening credits to About A Boy, rich London bachelor Will decides that the saying “No man is an island” (written by poet and cleric John Donne 400 years ago) is complete rubbish and that we should, in fact, embrace independence.
Of course, he goes on to eat his words — as does pretty much anyone who reaches this conclusion.
Whether you’re an Olympic runner, an app developer, or a wealthy big-city bachelor, getting to know what’s going on in the world around you is a smart thing to do. It’s not just about knowing what you’re up against — it’s about learning from your peers and making sure you’re keeping pace. And like all things to do with business, doing this methodically and formally is the right way to go.
This is where a competitive landscape analysis comes in.
In this article, we’ll give you the lowdown on what one is, why you should do one, and how to get started on your own.
What is a competitive landscape analysis?
A competitive landscape analysis is a structured way to research your competitors. It’s a detailed deep-dive into the way they operate — from marketing and sales to product development and community building. Doing this makes it easier for you to spot gaps, work out where you can improve on what they’re doing, and develop counter-strategies instead of relying on guesswork.
A competitor landscape analysis is typically split into six stages — which we’ll explain in a little more detail straight after this. They are:
- Working out who your competitors are
- Analyzing their products and services
- Analyzing their marketing efforts
- Plotting their strengths and weaknesses (and your opportunities and threats)
- Working out your USP
- Setting your pricing
Figure out who your competitors are
You or your client should be able to name a handful off the top of your head. But these tend to be typically big-name businesses — and it’s likely you’ll be able to name them for a limited set of reasons.
When you do a competitive landscape analysis, you need to go deep. Spend some time typing your keywords into Google (phrases your users might type to find your products is a good place to start), and list down the companies that pop up.
Begin with a list of 10 or so names, then split them into three groups: direct competitors, secondary competitors, and tertiary competitors.
- Direct competitors are those who sell the same product or service as you
- Secondary competitors are those with something similar, but with slightly different features, or to a different market
- Tertiary competitors are those who sell something completely different, but that could be an alternative if your product isn’t available.
You can further refine these into ‘similar’ and ‘aspirational’ competitors (these are the companies you aspire to be like).
Once you’ve done this, you’ll have a fuller picture of who you’re up against and where you fit in.
Analyze their products and services
Once you have a list of competitors, it’s time to start analyzing their output. Look at their website, their social media, their bricks-and-mortar store (if they have one), their products, pricing, servicing, imagery, blogs, ebooks, podcasts… leave no stone unturned.
A good way to do this is to pretend you’re a new customer setting off on a customer journey. Take note of the content and messaging you encounter along the way, from customer service replies on Twitter to newsletters for subscribers. See which parts you like most, and take inspiration from them.
Top tip: Social media is a huge place. Try social media listening tools to help you watch the right hashtags and follow relevant conversations that might be of use to you.
Analyze their marketing efforts
While related to the stage above, it’s a big job, so it deserves to be treated as its own stage.
Once you’ve identified where you need to be watching, it’s time to paint a picture of their overall marketing strategy. Here are some questions to guide you:
- Where are they focusing their marketing output?
- Where are they buying ads?
- What offers and incentives do they have?
- How do they draw customers into their marketing funnel? (newsletters, whitepapers, social media competitions, etc.)
- How is their marketing structured? (sign up and take note of how they pace their emails and the messaging they use)
Armed with this information, you’ll be able to learn from the best of your competition and work out how your own tactics will fit into this larger picture.
Plot their strengths and weaknesses (and your threats and opportunities)
Are your competitors outstanding on social media? Do they have an amazing website? Or perhaps their customer service is getting negative online reviews, they don’t have a blog, or they charge too much for delivering an item? These kinds of things all belong on your SWOT diagram.
- Check out our guide to creating a SWOT chart for hints and tips on how to get started
By working out where your competitors focus their energy, you can learn where you fit in best, where there are gaps you can fill, and what you need to do to be as good as — or better/faster — than those around you.
Do you want to go head-to-head with an amazing social media presence? Or would it be better to identify where they fall a little short and fill that gap? (Hint: the second option is your best bet.)
Keep an eye out for the following:
- Things you can emulate
- Things they’ve done badly that you want to avoid doing yourself
- Gaps you can fill
- Services or products you can bring to market faster
- New products or services you can also offer
Work out what sets you apart (your USP)
So you’ve done all this research. What next?
It’s time to define your Unique Selling Proposition (aka your USP).
By now, you should know exactly who you are, where you fit in, and why customers would choose you over the other options. This is a great place to pause and work out what you stand for.
Create a brand statement, then use this as your guiding light when it comes to business choices. You want to be able to clearly articulate why customers should choose you over the competition.
Set your pricing
Pricing will always play a large part in the customer’s decision. But it’s not just about making things as cheap as possible as a way of undercutting the competition: Pricing plays a role in your customers’ perception of your brand.
If you go too low compared to your competitors, it may look like your product isn’t as good a quality as theirs — which is a turn-off. On the flip side, overcharging is definitely not the way to win customers.
You can also learn about what customers expect price-wise by running offers and deals and seeing which pricing strategies are the most popular.
Remember: No matter how strong you are, being an island is never a good idea. A competitive landscape analysis is a great way to create a more effective sales and marketing strategy by looking out at the world around you and taking note.
The landscape is constantly changing, with new (business) kids on the blog popping up every day. Then there are trends and new tech, world events, and new customer needs happening all the time. If you want to grab opportunities, learn from others in your industry and keep up with what’s going on around you. It’s a good idea to run a competitive landscape analysis and do it on a regular basis.
Using collaboration tools can help bring the team together during your analysis. Cloud-based diagramming tools and project management software are particularly helpful here: Using templates means you don’t have to reinvent the wheel every time. Simply create a job on your project management platform, then add all the necessary documents and diagrams. Then, once they’re created and saved on the cloud, all you need to do is hop back in and refresh them as new information comes in.
That way, you’ll always have an accurate picture of your competitors and customers, allowing you to make proactive moves and win your share of the market.