The Essential Guide to Competitive Landscape Analysis

Small business is a risky endeavor. For example, 21% of small business leaders in North America reported closing their doors during the past year in Meta’s 2022 survey of 23,480 business leaders worldwide. How can a business ensure that it stands out from the competition – and avoid a similar fate?

Competitive intelligence as a discipline has become crucial to business growth in recent years as competitiveness has increased in many markets. As a vital first step, competitive landscape analysis can help any business plan strategic investments, position its brand, and, perhaps most important, differentiate its products and services.

What Is a Competitive Landscape Analysis?

Competitive analysis examines other businesses that pose a threat to your organization’s revenue – businesses that could either take away customers or cut down on how much they spend. A good competitive landscape analysis usually includes an overview of the strengths, weaknesses, and market position of all the organizations in your competitive set – including your own – as well as deep dives into the details of each. And, because the business landscape is ever-changing, such competitive landscape analyses should become part of a company’s ongoing process.

The best competitive analyses also include self-reflection. How does your business perform against each competitor? What are its differentiators? Where does it fall short? A competitive landscape is an essential strategic tool that can help a business stay relevant within its market.

Who Are Your Business’s Competitors?

While competitors are often similar to each other in what they offer and how they position themselves, it’s also possible to compete with businesses that are nothing like your own. When identifying your competitive landscape, it’s a good idea to widen the scope to include any business, product, or service that might take away potential deals or diminish your business’s influence among customers. You can bucket most competitors into three categories:

• Direct competitors are most commonly thought of as your competitive set. They operate in the same market with a similar product, at a similar price point, and with similar perceived quality. They compete for the exact same customer base, much like two big-name pharmacies across the street from one another.
• Comparators are businesses that may offer a similar product or service but at a different price point, with different quality, or in another market. You may end up competing for the same customer base, although they will often have a unique selling proposition that’s very different from your own. Think of a fancy sushi restaurant that’s down the street from an Italian trattoria.
• Alternatives are businesses, products, or services that are entirely different from your own, but which may present another viable option for your customers. Back to the food analogy – think of a take-out restaurant next to a supermarket that offers take-and-bake family meals.

What Types of Competitive Content Should You Analyze?

In a perfect world, a business would know every little detail about its competition’s operations, strategy, and content. Yet that kind of analysis would take weeks per individual competitor and would be out of date shortly thereafter. Therefore, it’s necessary to choose what details to include in a competitive landscape audit based on your business’s specific goals. As those goals change, you can always update or expand the analysis.

• Websites contain the most essential, high-level intelligence and are a great starting place for any competitive landscape analysis. Nearly all – 99% – of the 1,200 competitive intelligence practitioners and stakeholders in a 2022 survey by Crayon, a competitive intelligence agency, found competitors’ websites to be a valuable source of information. Landing pages and page headers provide a structured breakdown of competitors’ positioning statements, core messages, and “reasons to believe” that support their claims. Additionally, support articles can give you a glimpse into how a competitor’s product or service works.
• Marketing content, such as resource libraries, blogs, white papers, and social media posts, can demonstrate a competitor’s influence within the market through how helpful it is to potential customers. You can also categorize and quantify content by topic to gauge where they’re focusing investment. For example, an insurance company that writes half of its recent blog posts about flood risk may be trying to increase flood policy sales.
• Pricing and promotional offers can provide similar insight into how a competitor views its own products or into its planned investments for expansion. When a competitor implements a limited-time promotion, it might mean that a product isn’t selling well enough or that there is a market opportunity, for example, if other competitors are raising prices. Additionally, competitors’ pricing, tiering structure, and upsells are critical inputs for setting your own prices. If a barbershop sells a men’s cut for $25 and adds a hot towel shave for $10, a neighboring barbershop probably shouldn’t charge $50 and $20, respectively.
• Media and reviews not only show strategic direction through the language in their press releases or launch announcements, they also reveal customer perception and performance. Even consumer businesses like car dealerships or tradespeople benefit greatly from positive feedback on public reviews sites or features in local papers.

How to Structure a Competitor Landscape

There are myriad frameworks that can help businesses synthesize all the raw information from their competitive landscape audit. Much like the types of content, each framework is best oriented toward a specific goal. Here are three high-level structures to consider:

• SWOT Analysis, which stands for Strengths, Weaknesses, Opportunities, and Threats, is a great way to juxtapose your business against its competitors. This is usually arranged in a 2-by-2 table with bulleted lists under each header. It’s a clear-cut way to identify your organization’s differentiators against each individual competitor.
• Feature Matrix contrasts two or more products by clearly stating which features each one does or does not have. The same framework can be adapted for services, too. For example, a car wash could break down what’s included in its and a competitor’s uppermost tier, such as wax, rain-coating, anti-rust spray, and wheel shine.
• Perceptual Mapping is a dual-axis chart that compares your entire competitive landscape across two quantifiable criteria. These criteria can be concrete metrics, such as price or average rating, or they can be more abstract, such as quality perception or innovation. For abstract criteria, assign an overall score to each competitor based on your audit’s findings. This structure is ideal for brand or product positioning, and can also help a business understand strategic groupings within its competitive set.

How to Leverage a Competitive Landscape Analysis

A complete competitor landscape analysis helps business managers understand, from multiple angles, how their organization competes in the market. However, there are several additional ways to activate this raw intelligence.

A good competitive landscape analysis usually includes an overview of the strengths, weaknesses, and market position of all the organizations in your competitive set – including your own – as well as deep dives into the details of each.

The previous section discussed how specific structures like feature matrices and perceptual mapping can support business, product, and brand strategy. These frameworks provide even greater insight when combined. An appliance manufacturer’s refrigerator, for example, may have every “table stakes” feature in a matrix, but customers may rate it low on an innovation scale because it lacks smart features. In response, that manufacturer could pivot its R&D into Wi-Fi enablement and app development.

Beyond strategy, a competitive audit can inform sales enablement tools and customer-facing content. “Battlecards,” for example, provide a sales team all the need-to-know information about a competitor and how to handle certain objections. For customers, “One Sheets” are leave-behind brochures that showcase a specific product or service. A competitive landscape analysis can even provide ideas to incorporate into a newsletter, blog, or thought-leadership and brand-building content.

The Bottom Line

A successfully leveraged competitive landscape analysis should differentiate your business and provide a compelling reason for prospects to buy its products/services. To ensure that your analysis remains valid, it should be updated as frequently as possible. That means always keeping an eye on competitors’ media presence and press releases, as well as listening carefully to new-customer prospects in the sales cycle – they’re likely getting the newest information because they’re talking to your competitors, too.