A competitor is an individual, a company, or an organization that competes in the same market, selling similar or alternative products/services to the same target audience.
There are two types of competitors:
- Direct Competitors: meaning those competitors who sell products and offer services similar to the competition (for example, two brands of beer, or soda).
- Indirect Competitors: when you lose market share because it's actually the customers who prefer the competition.
How to conduct a competitor analysis?
We can perform competitor analysis in several steps:
Step.1: Identify the competitors, meaning being able to understand who we are competing with and the products put on sale in the market;
Step.2: Analyze the competition, conduct an investigation to collect all possible data of the competitor and compare them with our company;
Step.3: Process the information, create summary tables to understand which data need to be compared;
Step.4: Choose a competitive strategy that is right for your business, that is, make it clear to your target audience that your company offers something more than others.
The main competitive strategies to consider are:
- Cost leadership: the goal is to achieve lower costs compared to competitors by optimizing production capacity.
- Differentiation: strive to offer a product or service that stands out from those of other companies.
- Value of the Offer: offering a higher product or service value compared to that of competitors.
Conducting competitor analysis is very important for an effective marketing strategy, because no matter how innovative your product may be, there will always be competition that can steal your business right from under your nose!
Competitor Analysis:
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