Market Analysis vs. Competitive Analysis
A competitive analysis is another subset of market research that focuses on identifying and assessing your key competitors while the overall objective of market research is the process of gathering, analyzing, and reporting data on potential customers and markets. A market analysis is a subset of market research that focuses on understanding the overall market landscape, including the size, growth potential, key trends, and regulatory landscape. Having a thorough, well-thought out business plan includes all of these research and analysis topics. Let’s take an 10,000 ft view of both Market and Competitive analysis sections of a business plan:
Market Analysis
The goal of a market analysis is to develop a deep understanding of the market in which you operate. This includes understanding the following:
- Market size and growth potential: How big is the market, and how fast is it growing?
- Key trends and drivers: What are the key trends that are shaping the market? What are the key drivers of growth?
- Regulatory landscape: What are the regulatory requirements that you need to comply with?
A market analysis can help you to identify new market opportunities, to develop effective marketing strategies, and to make informed business decisions.
Competitive Analysis
The goal of a competitive analysis is to identify and assess your key competitors. This includes understanding the following:
- Who are your key competitors? Who are the other companies that are trying to sell the same or similar products or services to your target market?
- What are your competitors’ strengths and weaknesses? What are your competitors doing well? What could they be doing better?
- How do you compare to your competitors? What are your competitive advantages and disadvantages?
A competitive analysis can help you to develop strategies to differentiate yourself from your competitors and to gain a competitive advantage.
Peeling Back the Layers: What to Include in a Competitive Analysis
A competitive analysis should include the following information:
- Identification of key competitors: Who are your key competitors? This may include direct competitors (companies that offer the same or similar products or services) and indirect competitors (companies that offer different products or services but that are targeting the same customer base).
- Assessment of competitors’ strengths and weaknesses: What are your competitors’ strengths and weaknesses? This may include factors such as product quality, pricing, marketing, and customer service.
- Comparison of your company to your competitors: How do you compare to your competitors? What are your competitive advantages and disadvantages?
- Recommendations for competitive advantage: Based on your competitive analysis, what recommendations do you have for developing and maintaining a competitive advantage?
Tips for Writing a Competitive Analysis
Here are some tips for writing a competitive analysis:
- Be specific: Avoid making general statements about your competitors. Instead, be specific about their strengths, weaknesses, and how they compare to your company.
- Use data to support your claims: Whenever possible, use data to support your claims about your competitors. This data can come from a variety of sources, such as industry reports, news articles, and customer reviews.
- Be objective: Avoid making subjective statements about your competitors. Instead, focus on providing an objective assessment of their strengths and weaknesses.
- Keep it up-to-date: The competitive landscape is constantly changing, so it is important to keep your competitive analysis up-to-date. This may involve regularly reviewing your competitors’ websites and marketing materials, as well as talking to customers and industry experts.
Market and competitive analysis are essential tools for any business. By conducting a market analysis, you can gain a deep understanding of the market in which you operate and identify new market opportunities. By conducting a competitive analysis, you can identify and assess your key competitors and develop strategies to gain a competitive advantage.