What To Include in Your Competitor Analysis

Understanding the Value of Your Competitor Analysis

Startups need to understand the size and scale of a market, the number of potential customers, and who their competitors are before launching. 

Conducting a competitor analysis gives founders insights into what their target customers want and need.

It also shows whether your competitors are fulfilling those needs, how to differentiate yourself, and the growth potential in your chosen market sector.

A competitor and market analysis provides valuable insights for potential investors — and for buyers when founders decide to exit their business. 

What is a competitor analysis?

A competitor analysis is a comprehensive overview of your competitors and the market you intend to enter and operate in.

A competitor analysis is NOT taking a brief look at a handful of competitor websites, their funding sources, teams, press releases, and social media accounts. 

If you limit your “analysis” to a surface-level overview, you will miss valuable insights that could help your startup grow and differentiate itself. 

A strategic competitor analysis should provide insights into how you could outperform your competition.

That may mean introducing new products or services, entering new markets, or running innovative sales and marketing activities to outsmart them. 

It’s a good idea to refresh your competitor insights at least once a year.

This exercise helps you to stay on top of industry trends and ensure your product or service continually meets and exceeds the needs of your particular niche and target audience. 

But, don’t stop there. A market analysis completes the picture for the business sector you’re targeting.

What is a market analysis? 

A market analysis is somewhat different. Both are equally important and they’re interconnected.

A competitor and market analysis add information and context to other vital assessments you should complete, such as understanding and defining your: 

A market analysis is a comprehensive assessment of your business’s competitive landscape within the market/sector and the specific niche in which you intend to operate. 

A market analysis should include quantitative data on the size of that market and the prices customers are willing to pay, alongside qualitative assessments of your ideal customer’s buying motivations, values, and any other intelligence you can collect. 

Why is a competitor analysis a valuable asset for startups?

A competitor and market analysis (alongside TAM, SAM, and SOM) are valuable assets for the following reasons: 

  • Founders need to know the size and scale of their market. You must develop a profound understanding of your customers, their pain points, the price they’ll pay, and their motivation to buy. It also pays to know your competitors so you can position your product/service against theirs and compete effectively. 
  • To guide sales and marketing strategies. Differentiating yourself from your competition, offering competitive products and services, and charging cost-effective rates all come from knowing your market, customers, and competitors. It’s the most effective way to create actionable sales and marketing strategies that help you achieve your growth targets and capture market share. 
  • A competitor and market analysis are also useful when fundraising. Your research shows investors that you’ve done your homework — adding more context to sales and marketing strategies, and TAM, SAM, and SOM calculations. 

Let’s address the steps to perform a competitor and a market analysis. 

How to perform a competitor analysis?

  1. Make a list of every known sizable competitor in your market. Go into as much detail as possible. 
  1. After that, search for any other company known to provide similar and competing products and services — including those that deliver complementary or bundled services and are competing for a slice of the budget you are going after. For example, if you offer accountancy software and other companies offer accountancy and payroll software, these are competitors, especially if customers need both services. 
  1. Review every competitor in detail: products/services offered, product features, price points, customers, case studies, awards, investment, investors, advisors, partners, team, press releases, social media, content, and anything else your researchers uncover.
  1. Next — and this is crucial — see what you can discover about your competitors’ revenue figures. Review players of every size in your market, including those providing services that compete for the same budget. Knowing these numbers will better impact and inform your TAM, SAM, and SOM figures, and revenue projections.
  1. Compile all your data into an actionable report. This will help shape your sales and marketing strategies, and provide context to TAM, SAM, and SOM assessments, revenue targets, and cashflow forecasts. 

How to complete a market analysis?

Similar to competitor analysis, understanding your market involves answering a series of questions: 

  1. How big is the market or niche within the market you want to enter, e.g., overall revenue or market capitalization figures?  Use public sources such as Gartner, the US Bureau of Labor Statistics, BMI Research, and other sector-specific starting points for this research. 
  1. Who are the big players in the market? Again, public sources should tell you everything you need to know. Naturally, there’s some overlap with the competitor analysis, as one is always connected to the other when assessing any market. 
  1. How many potential customers are in this market? Your TAM and SAM research will be particularly handy here.
  1. What do the buyer journey and a typical sales cycle look like in this industry for the customers you’re targeting? For example, an enterprise buyer’s journey will always take longer than selling products to SMBs or startups. Sales cycle timelines are dependent on your price point, your prospect’s budgetary constraints and sense of urgency, the number of decision-makers, and your competition.
  1. What gaps in the market can you fill? Are customers looking for something that your competitors don’t provide? Direct interviews with potential customers are a goldmine for market research and understanding the way your product/service aligns with the needs of your ideal customer profiles (ICPs). 

Key takeaways: using your competitor and market analysis 

After completing all that research or paying for a competitor and market analysis, it must be implemented. Your analysis should guide and inform your strategic plan. 

Sales teams can use this information to create competitor battle cards. So, when speaking to a sales lead, they can clearly show how your product/service is better than what your competition offers. 

Marketing teams can use this information to inform and guide marketing strategies.

Software companies often turn comparisons with direct competitors into SEO-based content assets to drive web traffic into the sales funnel. 

Founders and Chief Financial Officers (CFOs) use this data to mold and adjust revenue projections and cashflow forecasts, especially when leveraged alongside TAM, SAM, and SOM assessments. 

Understanding your startup’s market and competitors is a valuable asset for market awareness, fundraising, and executing growth strategies.

Start your analysis today. 

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Dom Wells

Dominic Wells is the CEO and Founder of Onfolio. Dom is responsible for developing and implementing Onfolio’s long term business strategy. He is a serial entrepreneur with more than a decade of experience investing in and building digital businesses. Dom has grown Onfolio from a startup to a NASDAQ listed company. For Onfolio’s investors, Dom has built a diverse and profitable portfolio of online businesses that deliver consistent returns. Dom is passionate about entrepreneurship and regularly speaks on digital business strategy, online business investment and profitable growth opportunities. For Dom, diversification and exceptional talent are the keys to sustainable growth.

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