Business Plan Center

Eight keys to competitive business analysis

Consider these factors as you evaluate your competitors.

As you conduct a competitive business analysis, here are eight criteria to analyze your competitors.

1. Products or services

The features of competitors' products and services affect what they charge, how they advertise, and which markets they target. When analyzing a product or service, ask:

2. Pricing

Competitors' prices can give you clues about their strategies and potential for growth. Monitor their pricing, and how they adjust pricing, to gain insight. Ask:

  • Did they set prices low to penetrate the market quickly?

  • Do their higher prices correspond to higher quality?

  • Do they offer discounts, coupons, or other deals?

  • Have they raised or lowered prices recently? If so, why?

3. Location and facilities

Competitors' facilities influence their production processes and the experiences of their customers. As you assess their locations, ask:

  • Do they operate from brick-and-mortar businesses, online stores, or both?

  • Are they near you or other competitors?

  • Do their facilities allow them to keep up with demand and provide good customer experiences?

4. Human resources

The human resource management and hiring practices of your competitors can shed light on their plans for growth and their areas of expertise. Ask:

  • What are their organizational structures?

  • Who makes up their leadership teams?

  • Have they hired employees recently or let anyone go?

  • Which qualifications and skill sets are unique to their staffs?

5. Customer base and target market

Who your competitors target — and whether they can turn prospects into customers — can give you a sense of their overall strategies, market shares, and marketing. Ask:

  • Which demographics do they target, and how do they communicate with each?

  • Which demographics are excluded from their target markets, and why?

  • Which demographics make up their customer bases and which are excluded?

6. Marketing tactics

Marketing and advertising campaigns help your competitors connect with customers, which makes these important factors in your competitive analysis. Ask:

7. Intellectual property

Competitors' intellectual property can differentiate their brands and product or service offerings. Understand their intangible assets by asking:

  • Have they registered any trademarks, patents, or copyrights?

  • Do they have any trade secrets?

  • To what extent does their intellectual property give them a competitive edge?

  • Are they involved in any intellectual property disputes or lawsuits?

8. Technology

Technology is critical in how your competitors innovate and increase efficiency. As you evaluate their technological capacities, ask:

  • Have they used technology to develop new products or services?

  • Have they used technology to streamline their production and other processes?

  • Do they use technology to connect with customers and make sales?

Gathering this data can help you create a competitive strength grid, conduct a SWOT analysis, or write a business plan. Your competitive analysis should be ongoing, so update your research quarterly to help you refine your own business strategy.