What is Competitive Analysis? Definition, importance, examples, and FAQs.

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What is Competitive Analysis?

Competitive Analysis refers to a strategy where you identify major competitors and evaluate their strategy to determine their strengths and weaknesses and create solid business strategies that make your organization superior to your competitors.

Competitive analysis helps you learn the basics of how the competition in the market works, and identify any potential available opportunities where you can get ahead of them.

What are the advantages of Competitive Analysis?

Here are some of the benefits that come with Competitive Analysis:

  • Helps you establish a USP of your product, how it is different from your competitors, and how you can get the best performance out of it.
  • Helps analyze your competitors’ strategy and where they’re outperforming you. This can be critical to realizing what’s relevant and ensuring that your resources are not getting wasted over something unfruitful.
  • Same as telling your competitors’ strong zones, it also reveals their weaknesses. This provides you information on any potential openings in the market and an opportunity to test out new products and strategies in the market.
  • Gives you a benchmark against which you can measure your own organization’s growth.

These are only a few of the many reasons why businesses should consider conducting Competitive Analysis. As long as there is competition, there must always be Competitive Analysis.

Example of Competitive Analysis

Competitive Analysis can be conducted in various ways based on the industry you are in. For a SaaS-based organization, such as Chisel, here are some things you can track:

  • Website Speed: High speed is extremely important as the customer may not want to wait for long times. Customers today are more likely to use websites that do not take much time to load.
  • Website Traffic: This is an extremely important metric as an accurate measure of the number of people visiting your website relates directly to the popularity and demand of your product among the consumers.
  • Traffic Sources: Analyzing whether the people coming to your website are doing so organically or via some sources. This helps you analyze what works and what doesn’t for the growth of the organization.

FAQs

Q: What is the purpose of Competitive Analysis?

A: Competitive Analysis is done to understand the strengths and weaknesses of your competitors and to establish what strategies you can employ to have the best possible outcomes from your product.

Q: How is Competitive Analysis important to startup companies?

A: For startups, Competitive Analysis is important as it helps them to analyze the practices of the already existing organizations, and what the strategies they undertook to reach that position are.

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