Competitor Analysis: How to Use Benchmarking to Grow

One of the pillars of a well-structured business is awareness of its own positioning within the market. To know how your product or service is positioned, it is essential to conduct a competitive analysis.

This is important because, think about it, there are dozens of brands of ice cream. Some are more popular and others are more refined. So, let's say you want to get into the ice cream business.

You need to know which brands you will compete with for customers, where the most strategic points of sale are, which business model makes the most sense for your product, etc.

Therefore, in this article, you will understand the basic principles for carrying out a strategic competitor analysis.

What is competitor analysis?

Competitor analysis is the work of collecting data about other brands that compete in the market with your business, either directly or indirectly.

Also called benchmarking, this analysis catalogs the market positioning of other businesses to understand how to operate within the same niche in a competitive manner.

Therefore, the objectives of this analysis can be varied, as can the objects and brands analyzed. When doing benchmarking, it is possible to analyze everything from a specific product to the management model of other businesses.

Benefits of Competitor Analysis

With a strategic competition analysis, it is possible to observe the market positioning of other brands, and thus, identify opportunities and threats.

For example, you may notice that your main competitors are offering higher prices and positioning themselves as a brand that sells popular products, and vice versa. Likewise, you may notice that your competitors are focusing on popular products and are creating a premium product.

In this sense, it is also interesting to include in this type of analysis the internal numbers, marketing strategies and working methods of companies similar to yours.

With this information, you can, for example, adapt the marketing strategies used by other brands to reach the same audience as them.

And an interesting point is that this analysis does not need to be done with businesses that sell exactly the same products and solutions as you!

After all, a store that sells children's clothing serves the same audience of families with children as a toy store, for example. In other words, although they are completely different businesses, the strategies for reaching this audience tend to be very similar.

When to do a competitor analysis?

Competitor analysis can and should happen periodically, so that your business is always well positioned in front of consumers. After all, it is thanks to this type of study that it is possible to predict competitors' actions that may affect your business.

By regularly monitoring market movements, you are able to anticipate and create strategies to not only maintain your clientele, but also capture an ever-increasing slice of the market share, through the creation of new products, solutions and strategies.

However, there are some situations in which a competitor analysis is especially important. This way, you don’t waste time, money and effort on ineffective strategies.

These are good times to do a competitor analysis:

• When launching a new product or solution;
• When opening a new business or new unit;
• When you need to position or reposition a product;
• When to launch a new marketing campaign;
• When you need to restructure internal processes, etc.

What information to include in your competitor analysis?

First, define the objectives of your analysis: evaluate prices, improve e-commerce, optimize the website, position a new product, find new management methods, etc.

When we talk about competitor analysis, it is common to assume that we should only collect data from companies that directly compete with our product, but this is a mistake.

A good competitor analysis can also reveal even more relevant aspects when studying other market opportunities. Therefore, there are several types of competitor analysis.

Types of analysis

If you have difficulty managing people, recruiting or organizing finances, this is a good opportunity to analyze how other companies perform these tasks.

To do this, you don't need to stick to your competitors, do you agree? After all, other companies that operate with a similar business model may have interesting insights that you can adapt to your reality.

Another way to analyze competition is to evaluate your indirect competitors and their strategies. For example, Cacau Show, although it sells chocolates, competes indirectly with O Boticário when we consider that both brands sell gift items.

Therefore, you can see that both operate in this field by offering gift packaging, gift cards, etc.

How to do a competitor analysis

After identifying your objectives with competitor analysis, choose 3 to 10 competing brands to collect data.

After that, it’s time to start gathering information. Your competitors probably won’t want to give you information for free. That’s why it’s important to be transparent and offer a bargaining chip.

If you need quantitative and internal data, one solution is to exchange your company's data for your competitors' data. But remember to act ethically when handling this information. A good solution is to propose a research partnership with other brands.

For example, if you have a very good management system, you can offer training to the team of another business and, in return, learn more about marketing from the other team.

Tools for doing competitor analysis

As collecting data is not always an easy task, there are now platforms to facilitate this process.

In the case of the digital universe, there are platforms that check the volume of searches, clicks and search trends on the internet. This is the case of SemRush, which we use here at Beatz. But there are also other tools such as Google Trends, for example. With this research, you save time by producing more accurate content.

For internal processes focused on people management, you can search for salary ranges and number of employees on platforms such as Gupy and Glassdoor.

But, to tell the truth, the best way to do a competitor analysis is to have someone who is an expert in the subject take on this role.

Talk to Beatz and find out how we can perform a strategic competitor analysis and how to position your brand based on the information collected.