Competitors aren’t waiting for a quarterly review to poach your customers. It’s happening right now.
Competitive pressure is rising, yet 44% of companies admit to having zero competitor visibility, according to a 2025 report from Crayon. Businesses that run a structured competitive analysis program are more likely to see higher revenue growth.
Here is a practical playbook, where you’ll learn the exact steps, time estimates, and benchmarks for conducting a competitive analysis that uncovers new opportunities and equips your team with fresh insights. Plus, walk away with a free template to ensure the process never stalls again.
What is a competitive analysis?
Competitive analysis is a type of market research. It’s the process of evaluating and understanding the strengths and weaknesses of competitors in your market. It involves gathering and analyzing data on competitors’ products, pricing, marketing strategies, distribution channels, and customer base.
Doing a competitive analysis helps you find potential advantages and barriers within your target market or products. It also allows brands to monitor how direct and indirect competitors handle marketing, pricing, and distribution.
Competitor analysis example: what does one look like?
There’s no single way to do a competitive analysis. How it looks will vary depending on what you’re trying to learn about your competitors.
You might conduct a competitor analysis on a specific aspect of your competitors’ operations—such as their website—or you might conduct a comprehensive analysis of their entire marketing and sales team. The goal is to help you understand your competitors’ actions and how to adjust your business strategy in response.
There’s more than one way to structure a competitive analysis. Here are some types of information often included:
For a broad competitive analysis, you might look at your competitors’:
- Target customers
- Unique value add or what sets their products apart
- Sales pitch
- Price points for products
- Shipping policy
- Funding
High-level information can help you understand the fundamental differences between your competitors. For a more specific analysis, try looking at your competitors’:
- Website features (design, content)
- Customer experience (checkout flow, customer support)
- Marketing content (product descriptions, blog posts)
- Social media (post frequency, engagement rates)
- Promotions (sales, discounts)
- Communications (abandoned cart emails, newsletters)
- Reviews (customer feedback, complaints)
What’s included in a competitive analysis is up to you. Use your research to answer specific questions that will help your business take action for future growth.
Types of competitive analysis frameworks
A spreadsheet can capture notes about each competitor, but having a framework can add depth to your analysis and help you see the market from new angles.
SWOT analysis
SWOT lists your company’s strengths, weaknesses, opportunities, and threats. SWOT leans into your competitors’ strengths and compares them to your business to find areas for improvement.
Strengths and weaknesses are elements of your business that you control and change over time, including:
- Product offering
- Partnerships
- Intellectual property
- Number of employees
- Market share
- Assets
Opportunities and threats are outside your control. You can plan for changes but can’t influence these elements. They include:
- Competitor products
- The economy
- Consumer trends
- Regulation
- Market size
- Market demand
Aim to run a SWOT analysis annually. It helps inform your break-even analysis and keeps tabs on the competitive landscape. You’ll want to include an updated SWOT analysis in your business plan if you seek funding.
Porter’s Five Forces
If you’re evaluating a new market or determining if your niche is viable long term, you’d use Porter’s Five Forces. They help you identify key players in the industry, evaluate how powerful they are, and create a strategic response to overcome them.
The model looks at five forces:
- Competitive rivalry. The number and strength of your competitors.
- Threat of new entrants. How easily new businesses can enter your market.
- Bargaining power of buyers. How much power customers have to drive down prices.
- Bargaining power of suppliers. How much power your suppliers have to increase input costs.
- Threat of substitute products. The likelihood of customers finding a different way of doing what your product does.
You’d look for evidence in market reports, competitor websites, and customer reviews to figure out if each of the five forces is strong (making the industry less profitable) or weak (making it more attractive).
Strategic Group Analysis
A strategic group analysis maps competitors within a single industry to understand market gaps using two variables, like price and product range. This will reveal underserved areas of the market.
For example, say a new cosmetics brand is analyzing the B2B beauty market using price point and distribution channel as its variables. They split competitors into three groups:
- High-price direct-to-professional brands sold exclusively through spas and salons.
- Mid-to-high-price brands sold through major wholesale retail partners (e.g., Sephora, Ulta).
- Low-price mass-market brands distributed broadly through drugstore wholesale channels.
After analyzing the groups, this analysis reveals a market gap. There are very few high-priced luxury brands that sell direct to consumer (DTC) online. The brand could see this as a golden opportunity to enter the market with a unique selling position.
Why competitor analysis matters for ecommerce
It’s easier to compete when you understand the competition. Knowing what your competitors are doing helps you plan a response, whether that’s adjusting your pricing strategy, tailoring your target audience, or copying a good practice you’re not yet doing.
A wider view of your ecommerce space can also help you see what sets your business apart.
If you’re starting an ecommerce business, an analysis of competitors will help you:
- Make informed marketing decisions
- Identify industry trends
- Benchmark against competitors
- Find your unique value proposition
- Determine pricing
- Unearth new ways of speaking to customers
- Find gaps in your marketing or product line
A competitive analysis is a living document that should be updated as a company grows.
As you develop new products, update your marketing strategy, or expand into new areas, a current competitive analysis document is a powerful resource.
It can reveal opportunities to gain leverage on your competitors, while highlighting areas where competition is intense.
When to do a competitive analysis
When building a business, a thorough competitive analysis is a great way to deepen your understanding of market factors.
As your business grows, repeat competitive analyses to stay in the loop with the industry’s latest products, features, and marketing tactics. Running regular reports will also help you compare how your business stacks up against broader trends.
Refresh your competitive analysis any time your business or industry changes significantly. A sudden surge in product demand or a Google algorithm update are both good reasons to review what your competitors are doing.
When deciding how often to revisit your competitor analysis, consider how fast-paced your industry is. Will your data be outdated in a month, quarter, or year? If a new competitor enters your market, remember they’ll likely analyze your activities, too.
How to do a competitive analysis
Keep your competitor research organized by following these seven steps:
1. Select 7–10 competitors
If you don’t know your competitors, step into a customer’s shoes and search for your products or services on Google, Amazon, or other marketplaces relevant to your business. Identify competitors that:
- Sell similar products
- Have a similar philosophy or mission
- Market to your audience
- Are new to the marketplace
- Are established in the marketplace
A diverse list of competitors will provide insight into how different companies are responding to challenges within your market.
2. Create a spreadsheet
As you collect competitor data, keep it organized in a table or spreadsheet—bonus points if your table design allows for easy updates over time.
Within your document, build sections for comparing competitors based on your research objectives, such as:
- Price range
- Product offerings
- Social media engagement
- Lead generation strategy
- First-time visitor offers
3. Categorize competitors: direct, indirect, legacy, and disruptors
Categorize each business in your spreadsheet as a direct, indirect, or tertiary competitor. This will help you determine how they relate to you.
Direct competitors
These are the brands that sell the same core product as you, often at a similar price point.
For example, Gymshark and Alo Yoga are direct competitors, as they both offer premium activewear aimed at fitness-focused millennials.
Direct competitors establish the benchmarks for pricing, features, and customer expectations.
Indirect competitors
These brands solve the same customer problem as you, just in a different way or an adjacent category. A good example is BlendJet (portable blenders) and Huel (meal replacement shakes). Both companies offer on-the-go nutrition, just via hardware versus consumables.
Indirect competitors compete for the same share of wallet. Customers have limited budgets, so they’ll need to choose where to spend their hard-earned money. For example, customers may spend a little more on meal replacement shakes to save time blending up their own concoctions.
Legacy brands
Everyone is familiar with these long-established names, which are present in nearly every industry. They have deep pockets, wide retail distribution, and have built trust with consumers for generations.
It’d be like comparing legacy denim brand Levi’s with a newer brand like Revtown. Both have exceptional products, but Levi’s has been around for much longer and is associated with denim in consumers’ minds.
If you understand how a legacy brand operates, you can position yourself on agility, community, or niche expertise.
Disruptors
Disruptors emerge unexpectedly and shift perceptions overnight. They are fast-moving and tend to capture markets through virality, creative branding, and product drops.
Bain & Company reports that these disruptor brands (or insurgents) captured a staggering 39% of growth within their categories in 2024, accounting for less than 2% of the categories for which they exist.
Keeping track of these brands is healthy because it helps you anticipate market shifts. Remember how Netflix completely displaced video rental stores?
Disrupters appeal to underserved markets, so understanding their offerings helps you uncover your own vulnerabilities and innovate before you are forced to.
4. Identify your competitors’ positioning
Positioning is a business’s most persuasive marketing tool. Good positioning connects you with a target audience and informs your messaging and values.
Understanding your competitors’ positioning is essential. You can learn how other companies talk to your customers and find a unique, relevant voice for your brand.
This positioning should always start with the customer. Shingly Lee, VP of marketing at GURU Energy, explains in a Shopify Masters interview, “It all starts with our positioning and really understanding which consumers or groups and segments of consumers are most capable of loving what your brand does.
“From there, we start to understand their behaviors, their needs. … What we wanna build is really what is the emotional and functional story and benefits that our brand stands for that will really resonate with our persona … positioning ourselves apart from our synthetic competitors."
Analyze these channels to see how competitors position themselves:
- Social media
- Press releases
- Website copy
- Events
- Interviews
- Product copy
When identifying your competitors’ positioning, ask yourself:
- What story is being told?
- How are products described?
- How is the company described?
- What is the unique value proposition?
Understand how competitors interact with their followers, customers, and other stakeholders. If you can pinpoint their communication framework, you’ll be able to clearly position yourself within the market.
5. Analyze competitor technology stacks
Knowing what a competitor sells is standard, expected even. However, understanding how they power their experiences can provide insight into cost and speed to market.
For example, suppose you know a competitor’s ecommerce site is built on Shopify. In that case, it’s a guarantee that they are launching a storefront 37% faster than their competitors, operating at speeds 2.4 times faster, and likely expanding globally with tools like Managed Markets.
With a technology profiling tool like BuiltWith or Wappalyzer, you can find out a surprising amount of information about any competitor’s stack. For example, you can see what marketing and analytics tools they are using, customer experience apps, and even JavaScript libraries.
6. Determine competitive advantage and offerings
Most successful companies sell unique products or offer distinct experiences. It could be an innovative feature, a secret recipe, or unparalleled customer service.
Think of these offerings as a company’s competitive advantage or unique selling proposition (USP). A fashion retailer’s competitive advantage might be high-quality products sold with expedited shipping. An online educator’s USP could be their 20 years of experience.
Look at your competitors’ goods and services and decide where their advantage lies. Their brand will likely be closely tied to their unique offering. Read customer reviews to see why your target audience shops with competing companies. They may like lower price points, premium materials, or sustainable practices.
Learning about the competitive advantages in your space will help you figure out where you should and shouldn’t try to compete.
7. Understand how your competitors market their products
Successful ecommerce stores often outpace the competition through marketing, not with their products alone.
But don’t assume you need to compete across all marketing channels to stay in front of customers.
Instead, use your competitive analysis to find out how your competitors are reaching customers and where they focus their marketing resources.
Maybe your competitors are all about targeting customers through Instagram or capturing traffic with helpful blog posts.
Use software tools o collect marketing data. Then, assume the role of a customer for a first-hand experience of competitor marketing.
You can try:
- Signing up for newsletters
- Subscribing to blogs
- Following competitors on social media
- Abandoning products in a shopping cart
- Purchasing a product
As you study competitors’ marketing and document your findings, you can decide whether to compete in popular marketing channels or reach your customers through less-used avenues.
The insights gathered during this stage will be helpful for sales and marketing teams.
8. Conduct a SWOT analysis
Use your data from the previous steps to create your SWOT analysis. Here’s what to consider for each section:
Strengths
- Look at your tech stack analysis. Is your ecommerce platform faster or more reliable than that of your competitors?
- Compare product features. Do you use superior materials or have unique intellectual property?
- Analyze customer reviews. Is your brand reputation or customer service a key differentiator?
Weaknesses
- Look at your market positioning. Are you stuck in a crowded, highly competitive quadrant?
- Review your competitor1s’ marketing. Are their social media engagement rates significantly higher?
- Assess your operations. Do competitors offer faster, cheaper shipping?
Opportunities
- Analyze disruptors and consumer trends. Is there an emerging trend (like a move to clean beauty) that aligns with your brand?
- Look at your competitors’ weaknesses. Do they have poor international shipping? That’s an opportunity for you to expand globally.
- Revisit your positioning. Which promises are empty? This points to an unmet customer need.
Threats
- Monitor disruptors. Is a new startup rapidly gaining market share with an innovative business model?
- Track legacy competitors. Is a large, established brand planning to launch a product that directly competes with yours?
- Consider macro trends. Are there upcoming regulations or economic shifts that could impact your business?
TIP: If you’re interested in writing a business plan but don’t know where to start, here’s a sample business plan template. Thousands of people have used this template to create their own plans (and it’s completely free to use).
9. Create a visual market positioning map
Lastly, compile all your information into a chart to see where your brand aligns with your competitors.
Use four boxes to show where the market is crowded, and where there are open spaces for your business to thrive. The map will give a clear picture of the market rather than sifting through your spreadsheets of data.
Here’s how to make your map:
- Pick two factors. Choose two things that are most important to your customers when they’re deciding to buy. For example:
- Price (Budget vs. luxury)
- Quality (Basic vs. premium)
- Style (Classic vs. modern)
- Draw your map. Draw a large plus sign to create four squares. Each line represents one of the factors, going from one extreme to the other. In practice, the bottom of the line is “Low Price” and the top is “High Price.”
- Add your competitors. Place your competitors in the squares where they belong. Be honest about their price, quality, and style.
- Add your brand. Do the same for your brand. This will show exactly where you fit in.
- Find the openings. Look for the empty spaces on the map. These are your best opportunities, the places where customers’ needs aren’t being met.
AI tools for competitive analysis in 2025
AI tools make it much easier to keep an eye on your competition. You won’t need to pour hours of time Googling and browsing TikToks for competitor insight. These tools will find all the important information, and some can even predict what a competitor might do next.
AI-powered competitor research platforms
Want to use AI to watch everything your competitors do online and report it all back to you? Employ these tools:
- Klue. Offers battlecards that auto-refresh when competitors change pricing, features, or messaging.
- Crayon. Monitors data streams like news, social, and product pages, and scores competitive threat levels.
- AlphaSense. Parses earnings calls, patents, and analyst notes to expose market signals before they trend.
- Contify. Tracks information on competitors, customers, and industry segments so you can curate and share actionable intelligence.
The tool you choose should show everything happening in your market. It should also make your life easier, pulling key facts, answering specific business questions, and automatically updating your competitive analysis reports.
Do your research first: Pick a company that has been doing this for a long time and has a good reputation. Check customer reviews and ratings on sites like G2 to see if other businesses are happy with their service.
Tracking AI traffic sources
A 2025 study from Ahrefs found that 63% of websites now receive some AI chatbot traffic and 50% of that comes from ChatGPT alone.
When someone asks an AI chatbot (like Google’s new AI Mode or ChatGPT) for a product, you want your brand to be the answer. AI tools help you understand how to become a top recommendation.
Some of the top tools available are:
- Peec AI. One of the first dedicated LLM trackers. Monitors mentions, sentiment, and cited sources across multiple LLMs with daily updates.
- Otterly.AI. Tracks brand mentions and website citations across major AI search platforms. Includes a GEO Audit tool to identify on-page optimization opportunities.
- Nightwatch. Another SEO tool that has integrated LLM tracking. It allows you to monitor keyword rankings in search engines alongside brand mentions in AI models.
Collect data with these competitive analysis tools
Once you know which competitors to study, it’s time to research and collect data for your competitive analysis. The good news is that many tools and software are available to make data collection easier.
Let’s look at a few resources that can help you gather insights into your competition’s keywords, content marketing, social media strategy, and more.
SEO Analysis
- Ahrefs: See your competitors’ top-performing keywords and estimated traffic.
- SE Ranking: Find out your competitors’ paid and organic search performance.
PPC/keyword performance
- Similarweb: Get insights into estimated monthly visits and traffic to gauge your competitors’ market share.
- SpyFu: Download your competition’s most profitable keywords from their PPC campaigns.
- iSpionage: See which keywords your competitors target on Google Ads, plus their projected monthly budget.
- SEMrush: Run audits on competing sites and analyze their backlinks.
Social media performance
- RivalIQ: See how often competitors post on social media, their average engagement rates, and their most successful content.
- Followerwonk: Get X insights about follower demographics, key influencers, and performance metrics.
- Sprout Social: Measure competitors’ performance across social channels.
Email marketing
- Owletter: Analyze changes and spot trends in your competitors’ email strategy.
- MailCharts: Aggregate emails to get insights into email frequency, subject line tactics, and more.
Content marketing performance
- BuzzSumo: See the top-performing content for general topics and specific competitors.
- Monitor Backlinks: Monitor backlinks and get notified each time someone references your or your competitors’ content.
Use resources like these to gather data and drop it into your competitive analysis spreadsheet to store your findings in a single, organized space.
A competitive analysis template and example
Free downloadable template
If you’re unsure how to start your competitor analysis, here’s an example template to get the ball rolling.
Let’s say you sell makeup brushes. To compare competitor approaches and identify where you can stand out, you might develop a table like this:
Add as many sections as needed to your template, but remember to keep the group of primary and secondary competitors below 10, so things stay relevant.
Competitive analysis example
Say you’re building out your positioning map as a brand entering the footwear market.
You Price (Low to High) on the vertical axis and Style (Performance/Athletic to Everyday/Fashion) on the horizontal axis.
- Top left (High Price, Performance): You’d find specialized, high-tech running shoe brands.
- Bottom right (Low Price, Fashion): This quadrant would be crowded with fast-fashion footwear brands.
- Top right (High Price, Fashion): Here you’d plot luxury designer sneakers.
After placing these brands, you may notice an open spot for a mid-priced shoe that combines athletic comfort with everyday style. This is the exact opportunity that a brand like Allbirds used to become successful.
6 competitive analysis mistakes in marketing
Now that you know how to create a competitive assessment, let’s go over some of the pitfalls that may affect the insights you’ve gathered.
1. Competitive analysis is not a one-and-done exercise
Outdated data can create a false picture, which leads to bad decisions. Businesses evolve constantly, so it’s important to consider competitor analysis as an ongoing process.
2. Confirmation bias is real
We all have a tendency to favor our initial assumptions. This is called confirmation bias. As you work through your analysis, try to challenge preconceived ideas about your competitors. Let the data build an objective picture of your competitive landscape.
3. Data without action is useless
If you’re putting in the work to do a competitor analysis, don’t let your findings gather virtual dust. Make a strategic, actionable plan to respond to your competitors’ activities with your own updates.
4. Working harder instead of smarter
Don’t reinvent the wheel and do things the hard way: Leverage the latest data collection tools to provide the right information without the legwork.
Many of today’s tools significantly speed up competitor research and provide bespoke insights and data points.
5. Starting without a direction
If you’re directionless while creating your competitive analysis, finding actionable takeaways will be more challenging. Before diving into research, define your goals and what you hope to learn about your competition.
6. Not accounting for market timing
When looking at competitor data, study how companies have grown and progressed over time, rather than examining their approach at a single fixed point.
Sometimes, information about how your competitors have evolved can be more valuable than knowing what they’re doing now. Understanding how similar companies have successfully navigated your industry will help you make better decisions.
Limitations in competitive analysis
Keeping an eye on your competition is smart, but it’s not always perfect. If you’re putting all your energy into what other companies are doing, it can lead you down the wrong path.
Here are some limitations to stay aware of:
- Getting stuck on research. You can spend so much time studying your competitors that you never get around to making your own moves. Research is useful only if it leads to action.
- Looking backward. A competitive analysis will show you what’s worked in the past, but it can’t always predict what will happen next. In trending industries like fashion, your information ages quickly and you might miss the next big trend.
- Seeing only what you want to see. It’s easy to pay attention to the information that proves what you already believe. This is called confirmation bias, and it can cause you to ignore your own weaknesses and underestimate a competitor’s strengths because you weren’t looking for them.
The biggest risk, however, is becoming so obsessed with competitors that you forget what your customers actually want. If you just copy what everyone else is doing, you’ll always be a step behind.
The best ideas come from understanding your customers and finding new ways to solve their problems. People buy from brands that understand them, not from those that just copy everyone else.
Competitive analysis: your business edge
Competitive intelligence is vital when starting a business. By doing market competition analysis on an ongoing basis, you can stay on top of your competition. You’ll be able to break into new markets, launch new products, and keep tabs on your competitors’ customers—giving you a cutting-edge approach that keeps your business or startup agile.
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Competitive analysis FAQ
Why should you do a competitive analysis?
Competitive analysis helps businesses identify their strengths and weaknesses in relation to competitors. By assessing competitors’ strategies, products, and market positioning, businesses can uncover opportunities for innovation and improvement. For example, a retail brand might analyze pricing and customer reviews to enhance its own offerings and better cater to consumer needs.
What is a competitive analysis?
A competitive analysis is a research document that compares your business with its competitors. By evaluating your competition’s strengths and weaknesses, you can find your advantage.
What’s inside a competitive analysis?
- A competitor’s target customers
- Their market share
- Their major competitive advantages
- Key product features
- Product price points across marketplaces
- Shipping policies
- If competitors received funding or venture capital
What are the steps of a competitive analysis?
- Choose seven to 10 competitors.
- Create a spreadsheet to track your data.
- Determine competitor types.
- Identifying positioning.
- Analyze competitors’ tech stacks.
- Determine competitive advantage and offering.
- Understand how your competition markets themselves.
- Conduct a SWOT analysis.
- Build a marketing positioning graph.
Is a SWOT analysis part of a competitive analysis?
SWOT is a competitive analysis framework that helps gain insight into a current business situation. SWOT represents strengths, weaknesses, opportunities, and threats.
