Carrying out a competitor analysis - what it is and how to do one.

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Ah, competition! It pushes you to be your best and do the best you can in your field. You could definitely say that it’s good for the entrepreneurial spirit. It’s also very annoying. 

The reality is that you and every other business in your niche is out there on the battlefield of digital marketing vying for the love and social media engagement of the same target audience.  

But you can use their presence to your advantage and figure out a way to be the startup that comes out on top each time, starting with carrying out your first competitor analysis. 

Okay, so what’s a competitor analysis?

A competitor analysis is an in depth assessment of your competition’s strengths, weaknesses and sales tactics. You’re essentially scoping out the competition and figuring out their blindspots, the places where you outperform them and the places where you seem to be falling short. 

If you’re just getting started with your startup’s social media and marketing techniques, and things aren’t going the way you want them too, it can be super frustrating. Seeing a similar company in your niche crushing it and not being able to work out what their secret sauce is, is painful. 

When you understand exactly what your competition’s strategy is, their story and even what their own clients think of them you can come up with solid ways to fill the gaps they’ve left and begin your marketing journey with an edge over other businesses in your sector. 

Here’s how to do it. 

  1. Be aware of the 3 types of competitors. 

The first thing you should know is that there are 3 different types of competitors in marketing. 

Direct competitors are other businesses who are going for the same target market as you with the same product. You probably have a few in mind. These companies are great for estimating entry barriers as they set the bar for entering a market. 

Indirect competitors are businesses in the same sector who offer a different product or service that could still satisfy your customer’s needs. 

Replacement competitors are companies who have the potential to provide an alternative product or service to yours and are going for your target audience. Their aim is to offer customers a better experience. For example, ubers replacing taxis. 

This category is easy to ignore but I personally consider them to be the underdogs. Keep your direct and indirect competitors close, and your replacement competitors closer. 

  1. Identify your competitors. 

Now that you know the 3 different types of competitors, it’s time to go find them! 

Taking a look at the current market is the best way to find direct competitors. What other companies are selling your product or providing the same services? Take a closer look at their marketing strategies and the content they’re posting. 

Doing a deep dive into online communities and forums like Quora or Reddit is a great way to find additional direct competitors. As they talk about their experience, you’ll also be able to get insight into what consumers feel that they are missing, allowing your business to come swooping in as their knight in shining startup armour. 

Indirect competitors are where some good old keyword research comes in handy. They aren’t too hard to notice, most of them are writing blog posts and captions related to your product or value proposition and are using keywords to help themselves get found by your target audience. 

Make a list of keywords that relate to your product, throw them into Google and Bing and make a list of the companies that show up on the results page. Anyone writing content about your value proposition is an indirect competitor. 

Replacement competitors are a little bit harder to come by, but keyword research will be your best friend. I would also spend some time searching through online forums too. In the day and age of social media, consumers are armed with lists of alternatives to products and services that they share amongst themselves. 

  1. Carry out a SWOT analysis. 

A SWOT analysis is a great tool that you can use to look at each company’s competitive position and develop a strategic plan. It’s an acronym that stands for Strengths, Weaknesses, Opportunities and Threats. 

For a SWOT analysis based on digital marketing and social media, I’d focus on brand positioning, marketing strategy and content strategy. Make a note of the strengths and weaknesses of each one.

Ask yourself what is working well for these companies, are there any memorable branding features that give them an advantage? Where are they falling short and does your company do a better job in those areas? 

Using this method can help you determine how much of a threat each business is to yours and decide how you’d like to proceed going forward. Knowledge is power! 

Processes like a competitor analysis aren’t just carried out at the beginning of a startup’s social media journey. You can do this at any point - even if you just feel like there’s something you may be missing out on. 

And as always, the Rbbl blog is a resource that is always here to help you along the way. Our platform is an ecosystem of founders, investors and service providers ready to network and form beneficial partnerships. Join now to access tons of startup events so you never have to miss the moment!