How to Do Competitive Landscape Analysis: 7 Frameworks

Developing something top-quality is difficult at every step of the product life cycle. And when it looks like you did everything right and gave it your best, you still get outperformed by the bigger or more unique fish in the sea. Witnessing your competition thrive is usually a big bummer. Why are your customers giving preference to others? And what are you doing wrong?

Well, you could keep on passively observing your competitors or perceiving them as a threat that keeps on stealing your share of the market. Or you can do something about it, precisely leverage a competitive landscape analysis framework or two. After all, your competitors are invaluable assets. They're the ones to shape market trends, set the tone, and hint at how they're achieving success to help you strengthen your own offering and business strategy.

On this page, we'll overview some of the most commonly used competitive analysis models, noting how to apply them, what they should include, and which benefits they can bring.

What Is a Competitor Analysis Framework?

A competitor analysis framework serves as a strategic tool for businesses aiming to know their competition well. Such frameworks imply collecting data and key information to evaluate a competitor's strengths, weaknesses, tactics, and so on, and then use these findings to improve their own strategies.

Why should you go through the trouble of conducting competitor discovery? Getting a comprehensive understanding of your competitors on the market and uncovering key insights on where they stand definitely improves decision-making. It helps anticipate market trends, differentiate your offering, equip the sales team, and improve the product and its positioning, all resulting in a competitive advantage of your own. Otherwise, how else will you survive in the industry? Operating on guesswork is surely much riskier.

Benefits of Using a Competitive Analysis Framework

Certainly, conducting such analysis takes time and effort. However, understanding your top competitors can help the business in multiple ways. To say the least, it can aid various spheres from design and product development to sales, your marketing strategy, and beyond.

Here are a few notable benefits of using frameworks for competitor analysis:

• knowing your competitors' strengths and weaknesses;
• identifying the potential impact of new entrants to the market;
• recognizing industry dynamics and market shifts (revealing trends, patterns, and how customer preferences evolve);
• finding new markets, unmet needs, and opportunities for exploration;
• allocating possible threats and preparing for them;
• spotting gaps in your current strategy;
• strengthening the unique value proposition (UVP) to distinguish your offering;
• coming up with actionable steps to boost product development, marketing, and so on;
• learning from the mistakes and missteps of others;
• improving decision-making and setting more precise goals.

Main Components of a Framework for Competitor Analysis

Regardless of the types of competitive analysis, most frameworks come with a shared set of components. These are the ones that are typically included along with the often-asked competitive analysis questions.

1. Who Are Your Competitors?

It all starts with compiling a list of the company's competitors and the customers that they target. Hence, you can distinguish direct and indirect ones:

• direct competitors (provide similar products or services that closely match yours and are aimed at the same audience);
• indirect competitors (offer alternative solutions, which may appeal to the same consumer group).

2. What Do Competitors Offer? What Are Their Strengths?

No matter the framework competitor analysis put to use, the following points will form the core of such research. It's all about collecting meaningful and relevant information that can help you know your competitor's strong sides and weaknesses like the back of your hands. A lot of the fundamental information listed below is quite easy to find online:

• business overview (the size of the company, number of employees, etc.);
• product features and design (provided services, main functionality, ease of navigation, and so on);
• pricing structure (the pricing strategy and tiers, available discounts, and offers);
• marketing tactics (used channels, run ads, content types, tactics, positioning, messaging);
• sales techniques (used approaches, pitch, what's emphasized as a unique selling point);
• customer support (how customer service is handled, e.g., if there's a 24/7 chatbot);‍
• client reviews (what people say, like, and dislike);‍
• overall performance (for example, how ROI is demonstrated or if it's a digital product, how well it performs).

3. What Is the Market Like?

Getting an overall outlook on the market that's specific to your industry is also an integral component. Do market research and examine current market trends to learn how they affect the landscape and your competitors' actions. This regards areas like economic or political influences, new emerging technologies, changes in customer behavior, and other factors.

For instance, thanks to market analysis, Robinhood discovered that many millennials and younger consumers were getting interested in trading but were looking for cost-effective investment options. This helped the company shape its product to offer zero-commission stock trading to live up to their needs and use it as a competitive advantage.

7 Most Commonly Used Competitor Analysis Models

As you might have guessed, there are multiple types of competitor analysis that may be conducted. Let's take a look at several of the often applied frameworks for collecting data on your competitors which can be important to know for your brand.

Strategic Group Analysis

This framework groups your competitors, putting them on the map according to how similar their strategy is or other factors. In essence, it lets you learn who your competitors are and how they are similar to you thanks to a comparison. Most often, teams organize their competitors based on the:

• product and offerings;
• current market share;
• pricing strategy;
• marketing efforts.

As such, you can group those who use similar technologies or channels of distribution, have a close price range to your product, or share other characteristics. By placing them side-by-side with your offerings, you can reveal where you stand and improve your marketing initiatives or rethink your pricing strategy to better compete with other players in your niche.

SWOT Analysis

This is a favored framework for analysing competition that stood the test of time. It's an effective and straightforward method applied by various departments, from product development teams and marketing to sales, and others. SWOT provides insights into the competitors' strong and weak points, letting you compare their offerings to yours:

• Strengths (which advantages the competitors possess that might pose a business threat, how they're outperforming you, where they excel);

• Weaknesses (the vulnerabilities competitors have, their strategic shortcomings, in which aspects they lag behind, e.g., staff turnover rates, negative client reviews, etc.);

• Opportunities (the competitors' growth avenues that could challenge your business, i.e., product offerings, partnerships, and so on);

• Threats (what can disrupt the competitor's market position, entails both internal challenges and external influences).

Finding the information for each of the points allows you to identify areas for improvement and how to make your own product better.

Porter's Five Forces

Applying this competitive analysis framework can be handy when you want to learn about the key market players and industry dynamics or calculate market size. Porter's Five Forces highlights the forces that impact a company's position:

• Competitive rivalry (who the existing players are, competition intensity, how their presence affects your strategies and business operations);

• Threat of new entrants (how simple it is for newcomers to enter the market, which can impact your market share);

• Supplier power (the leverage suppliers hold over your business that can influence your product or service costs or the stability of the supply chain);

• Buyer power (the number of customers out there and their purchasing power, which should be reflected in the pricing strategy and can take a toll on profitability);

• Threat of substitutes (which alternative products are out there, whether they could potentially deplete your sales if these appeal to your target audience).

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Business Model Canvas

Mentioning other competitive analysis types, as the name suggests, this framework breaks down a company's business model. The business model canvas framework usually features nine fundamental components:

1. Customer segments (who the target customers are);
2. Value propositions (why people should choose the product or service);
3. Channels (how is the offering marketed and sold);
4. Customer relationships (the experience customers receive);
5. Cost structure (primary cost drivers and their link to revenue);
6. Revenue streams (how money is earned, income sources);
7. Resources (assets that are necessary to withstand competition);
8. Activities (unique product delivery strategies);
9. Partnerships (what can be outsourced to free up your hands).

Analyzing these critical areas provides meaningful product insights and shows how well the business model is working and what needs improvement. And yes, you can do the same for your competitors and compare.

Growth-Share Matrix

Competition matrix analysis evaluates your company's products, possibly compared to a competitor's, but is more suitable for large organizations with multiple product lines. Basically, it allows to make more strategic investment decisions, highlighting what to put resources into and what to drop.

The matrix plots market share horizontally and market growth vertically, creating four key quadrants:

• Stars (a product with high growth and high market share shows strong future potential, so should be invested more in);
• Question marks (the common scenario with new products when growth is high but the market share isn't, companies should think whether extra investment is needed or to drop the product);
• Cash cows (usually the more mature and established products that have a high market share but low growth, their revenue is often used for creating and supporting other products);
• Dogs (low-growth and low-share products that it usually makes sense to reposition or divest).

Customer Journey Map (CJM)

A customer journey map is a non-standard competitor analysis framework example, but it can also shed light on how your competitors are doing from the perspective of a user. It is applied to track the users' "footprints" and learn via which touchpoints they're reaching a brand and how they're interacting with it. Then this information is used to refine your own strategy.‍

How do people find your competitors? What leads them to discover their services? To find that out, mark the buyer personas and map the customer channels. This includes looking through their social media, website, paid ads, and so on. For instance, you may monitor how many followers they have on social media and how the competitor interacts with them.

Then, what makes customers take the action desired by your competitors? Say, what pushes them to sign up or make a purchase? For example, you can examine their website, its navigation, messaging, calls to action, and how the funnel is organized.

Perceptual Mapping

Similarly, there's another framework that highlights the customer's perception. Also referred to as positioning mapping, this is a diagrammatic method that illustrates how consumers view the product or service.

Usually, teams draw a graph or plot that shows two comparison factors, say, price and quality. Then, they put down the main points regarding their own offering and the competitor's to see whose is better. This kind of mind map lets you spot gaps and think of ways to boost your product.

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How to Do Competitive Landscape Analysis

With a clearer idea about the various competitor analysis models out there, let's get to the practical part. Below we'll cover the basic steps of conducting such an analysis.

Step 1. Prepare for the Analysis

Begin your competitor analysis process by actually preparing for it. For starters, define the goals and reasons driving your efforts. Why are you doing this now? What is the purpose? Then, set clear objectives of what you expect, and choose performance metrics and indicators to help you measure success.

You need to get organized straight away too, as there will be lots of information to collect and process. Mountains of unstructured data won't lead you to the expected insights. So, to avoid confusion and not get overwhelmed, create a designated space to store your data.

This could be something as simple as a spreadsheet, a special tool (say, the competition analysis matrix where you can sort and move data around), or whatever works for you. Don't overlook data visualization, by the way, as well-organized and convenient dashboards aid in interpreting data.

Step 2. List Your Competitors

Next, create a list of your direct and indirect competitors. Who forms your competitive landscape? Don't limit your focus to just the obvious players that share your market, though. You can start off with about ten and then categorize them:

• primary (have practically the same product or service offering as yours);
• secondary (do something similar but with different features or an incline to another target audience);
• tertiary (have an alternative product, yet one which could hypothetically replace yours).

Step 3. Choose a Framework and Collect Data

Based on your goals, select a competitor analysis framework that makes sense for your current objectives. Mind that you're free to use multiple approaches, so you can mix and match a few different models for competitor analysis for more comprehensive results.

This is the most effort-intensive and time-consuming step. Your current focus is on gathering relevant information. In essence, you must collect as many details as possible to get a comprehensive overview of each competitor. Here's what you need for your assessment to paint a complete picture:

• basic information about the company (location, years on the market, staff size, and so on);
• details about their products and services (key features, advantages, etc.);
• design aspects (imagery, colors, ease of navigation, whether the look is modern);
• pricing strategies (how much they charge, pricing options, standout offers, unique selling points);
• marketing strategy and digital footprint (marketing tactics, content types, traffic sources, advertisement usage, messaging, channels, social media activity);
• customer reviews (opinions shared on various platforms, positive and negative feedback);
• distinctive competitor qualities (what differentiates and sets them apart from your brand);
• market trends (whether there are visible declines, new technologies, and so on);
• and other critical aspects that are relevant to your specific niche.

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Step 4. Analyze and Interpret Your Findings

Now it's time for data-driven analysis. Evaluate the strengths and weaknesses of your competition, noting what they're doing well and pinpointing areas that might present opportunities for your business. To do so, create comparison charts or battlecards to better visualize where you stand on the market against the competition.

For instance, if you've discovered that a competitor's product is clearly overpriced, this could be your strong suit. Or if you've noticed that they have tiered or more flexible pricing options or special offers that may be luring customers, perhaps, you can move in this direction too. Likewise, if you come to find that your competitors' clients are complaining about a specific feature or other shortcomings in their reviews, this is another opportunity for your product to excel.

Step 5. Create an Action Plan and Execute It

Now extract advice from your findings and transform them into actionable insights. Importantly, question every finding. Say, a competitor of yours has two times higher costs than you do. But why does this matter?

The thing is that not every product update, pricing adjustment, or other change will have the same level of influence business-wise. So you have to be sure about the challenges you're going to address.

Remember that mimicking your competitors' tactics isn't your aim. What works for them doesn't necessarily have to be the right fit for you. In fact, strategic imitation could even be harmful sometimes.

But such analysis is a problem-solving tool. It can reveal ineffective strategies, helping you avoid pitfalls and plan your tactics more effectively. Therefore, develop a clear action plan to implement your decisions. Then, act on your insights, keeping an eye on whether there's change for the better.

Step 6. Revise from Time to Time

Finally, bear in mind that such analysis isn't just a feature checklist that you complete and set aside. It's an ongoing endeavor, not a one-off deal.

The thing is that your competition is dynamic. So relying on the results of a single analysis may be misleading since it's merely a snapshot in time. To stay ahead, monitor the competitive landscape, periodically review your assessment, and update your data. This way, you may spot potential threats faster, adapt, and be more proactive to introduce the needed changes.

Concluding Thoughts on Competitor Analysis Frameworks

A competitor analysis framework may be a strategic tool that's much more precise than a magic ball or unproven hypotheses. It lets you get insights into your competitor's tactics, allowing you to find out more about what's working for them.

The bottom line is that such analysis can equip you with strategic knowledge like overlooked opportunities or potential risks. All this is necessary to enhance decision-making and refine your product, marketing, and customer acquisition, letting you conquer a bigger market share.

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