Mastering Competitive Analysis: A Strategic Guide for Startups

Startups often struggle to understand their competitive landscape, which can lead to an inability to differentiate from rivals successfully. Without a clear view of competitors, you may fail to identify gaps in the market that competitors have not yet exploited.

Let's define first what is competitive analysis, also known as competitor analysis, is. Wikipedia defines it as an assessment of the strengths and weaknesses of current and potential competitors. It is a systematic framework for research that can aid in the development of any strategy a company may be thinking of implementing.

Although it is popular and largely implemented in marketing, competitive analysis is an important tool to validate and ensure your strategies are different from those of your competitors. This could be the perfect business model for your startup, building buzz and capturing early interest, developing a new feature, or making your product available in another country.

Traditionally, a detailed profile is created for each competitor. The overarching sections are:

• Background

  • Location, history, organizational structure, etc.

• Financials

  • profitability, profit margins, etc.

• Products

  • Products offered; brand awareness; brand loyalty.

• Marketing

  • Segmentation, advertising themes, and ad agency used.

• Facilities

  • Location, shipping logistics, plant capacity, etc.

• Personnel

  • Number of employees, management style.

• Corporate and marketing strategies

  • objectives, mission statement, growth plans, acquisitions, etc.

    
    

However, you are likely to not need all the sections and not every subsection. By following these actionable steps, you can outline your own competitive profiling that works and aligns with your current project, gain a deep understanding of competitors, identify gaps in the market, and position your products for success.

How To Outline Your Competitive Analysis Research:

1. What Is The Analysis’ Objective:

   Every competitive analysis has an overarching goal, whether it is to compare your current marketing efforts against those of your competition or you want to find a gap in the current market. It is key to have a clearly defined objective before we conduct the analysis.

   
   

2. Define the industry—scope and nature of the industry.

   Clearly define the primary industry in which your startup or business operates. This involves determining the specific sector (e.g., technology, healthcare, retail) and the sub-sector or niche (e.g., SaaS for tech, telemedicine for healthcare).

   
   

3. Identify Your Key Competitors:

   Begin by researching and listing your direct and indirect competitors, around 7–10. This includes those offering similar products and services and those targeting the same customer base with different solutions.

   
   

4. Define The Criteria:

   There are essential aspects you’d want to cover in your analysis, regardless of the objective, they include:

   
   

   • Competitor’s Overview: A summary of the company, headquarters location, target market, and audience.

   • Main Offering: They’re primary products or services.

   • Pricing Strategy: The pricing for different products and or their pricing plan (subscription base, tier base, custom pricing, etc.).

   • Positioning: The core message is how they position themselves.

   • Customer Feedback: What are people saying online about them.

     
     

   This is where the objective of your analysis comes into play, knowing what answers you want to find helps you identify the questions you need to answer.

   
   

5. SWOT Analysis:

   When conducting competitor analysis across business, sales, and marketing, it's beneficial to simultaneously perform a simplified SWOT analysis. This involves identifying your competitor's strengths, weaknesses, opportunities, and threats as you assess their overall performance.

   
   

   Key questions to consider include: What is your competitor excelling at? Where do they have an edge over your brand? What are their weaknesses? How do your strengths compare to their weaknesses? By answering these questions, you can better position your company in the market and identify areas where your brand can improve.

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HubSpot is a leading B2B SaaS company that offers an all-in-one platform for marketing, sales, customer service, and operations. This is a competitive analysis template used to assess and compare HubSpot against other similar companies in the industry.

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Download our free template here!

By not conducting a thorough competitive analysis, your startup risks developing products that don't stand out, implementing ineffective marketing strategies, and being blindsided by competitors moves. This leads to loss of market share, decreased revenue, and ultimately, failure to sustain itself in a competitive market.

Armed with a solid competitive analysis, you’ll have the insights needed to determine a very strong “why”. When customers compare your product with a similar competitor's, the deciding factor often comes down to the “why” behind your brand. In many cases, similarly priced products are almost identical in quality, so the key differentiator becomes the reason a customer should choose your product over others.

This “why” can be a powerful motivator, especially if it aligns with customers' values or stands in contrast to competitors' perceived negatives. Data-driven insights, such as competitive analysis, play a crucial role in shaping successful campaigns and helping your product dominate the market you’re in.