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Competitor strategy analysis: methods, objectives, and advantages.

Updated: May 11

From this material, you will learn:

  • Tasks and methods of competitor strategy analysis.

  • The 10 basic steps of a competitor's strategy analysis.

  • An example of a competitor's strategy analysis.

Intrigues? I think so.

Even if your product is unique in its niche, that doesn't mean you don't need to analyze your competitors' strategies. Active competition is a powerful engine of the free market, and studying it is one of the basic techniques of marketing. Sometimes, for competent promotion, the qualitative characteristics of a product are not enough. And it is the analysis of the competitors' strategies that helps to discover effective techniques and gain an advantage in the market.

competitor analysis

Tasks and Methods of Competitive Strategy Analysis.

Why do we need to analyze the activity of competitors and existing competitive strategies in the market? Of course, to have a clearer idea of who ythose goals,our opponents are, what goals they set for themselves, and what opportunities they have to achieve them. A detailed analysis will allow you to know all the advantages and disadvantages of your competitors operating in your field.

Competitive Strategy Analysis

Competitor strategy analysis becomes necessary if, for example:

  • You are planning to create and market a new product. The analysis will help you study the products of other manufacturers and produce something radically different and better, able to attract the consumer's attention and ensure demand.

  • You develop a promotion strategy. The essence is the same; you study competitors' ways of presenting their products rather than their products themselves.

  • There is a process of price formation. Knowing what your competitors are selling for, you price your product at the most reasonable and attractive cost.

There are new ways to look at industries and competitors in order to do market research and study the strategies of competitors.


Strengths, Weaknesses, Opportunities, and Threats (SWOT)It is a marketing mix that allows you to actively promote your business while taking into account all its important components: strengths, weaknesses, opportunities, and threats.


SWOT is very popular because it is easy to use and shows high efficiency. Its advantages:

  • applicable in any field of activity;

  • adaptable and flexible in use;

  • appropriate for operational inspections of the company's work.


  • the results are subjective, they are influenced by the position of the person conducting the study;

  • a lot of time is spent on data collection;

  • the interrelation of factors important for business is not revealed.

Porter's method.

The following are the benefits of using this methodology to analyze competitor strategies:

  • both direct and indirect competitors are studied;

  • the level of existing competition is revealed;

  • ways to protect against outside interference are suggested.


  • an ideal assumption is taken as the starting point of the research;

  • the methodology is only suitable for elementary market structures;

  • additions, as an important external force, are not considered.


A methodology that allows you to take a global approach to industry research, studying the behavior of the macroenvironment and its impact on a particular business. PEST is excellent for in-depth analysis of competitors and long-term competitive strategies and is used for five-year economic planning.

pets analysis


  • allows the formation of global strategies and new business projects;

  • gives a complete picture of the market situation and its environment;

  • data is collected quickly.


  • difficult to use for diversified companies;

  • results can be inaccurate because of the difficulty and high cost of gathering the data needed;

  • research needs to be repeated constantly.




  • the competitor strategy analysis process is logical and clear;

  • the main strategic directions are identified;

  • the results are presented in a clear way.


  • groups of factors for research are put forward without justification;

  • the list is made randomly, there is no classification;

  • the review is not always thorough, and recommendations can be flawed.

The 10 basic steps of competitor strategy analysis.

A competitor strategy analysis might look something like this.

Step 1: Evaluate the overall level of intra-industry competition.

If competition in the industry is high and active, then:

  1. The market environment is changing rapidly.

  2. It is very important to be able to react quickly to these changes.

  3. It will take more spending, competent personnel, and a high-quality product.

  4. Finding a niche that is more or less empty is hard, and so is choosing a good way to compete.

  5. The risks of diminishing long-term profits are increasing.

  6. The market is rapidly developing and saturated with goods.

The task for the first stage of competitor strategy analysis is to determine the number of participants in the market, to understand how rapidly it grows, and how quickly new products and their groups appear. As a basis for drawing conclusions, here is the activity of competitors, forecasts on the toughening of their activity, and possible changes in the market.

It is better to collect information for the last three to five years, but if there is no data, a year or two will suffice. The main goal is to understand the current state of affairs and predict changes for the future.

Step 2: Make a map of your competitors.

The competitor map shows who is the market leader, who dictates the rules of the game, and whose strategies can be taken as an example and applied to your own business. The map shows the market share occupied by the company and the growth of sales.

At this stage of the analysis, each competitor's strategy can be described based on the data collected:

  1. Competitors with high market share and rapid sales growth set the rules of the game.

  2. Competitors whose businesses aren't growing (or are even shrinking) can easily get ahead of them and promote themselves.

  3. As examples, competitors with high growth rates can use their strategies and techniques.

Step 3: Comparative Portfolio Analysis.

Examine your competitor's portfolio and compare it to your own. Note which lines of business each competitor identifies as "key" (categories of goods that sell best and generate the most revenue).

Portfolio Analysis

Evaluate the properties on a scale of 0 to 5 points: 0 points: no valuable properties; 5 points: it is the best on the market.

The most accurate assessment of goods (both your own and competitors') will come from a survey of consumers and their participation in blind tests (when the product is presented without packaging and it is impossible to understand who its manufacturer is).

Step 4: Comparative price analysis.

Correlate existing competitors with existing price segments:

  1. Low-price segment.

  2. Medium-price segment.

  3. High-price segment.

  4. Premium price segment.

Determine competitors' lowest, highest, and average prices, and identify the price range in which the majority of sales take place.

Step 5: Comparative analysis of product distribution.

Identify the major channels through which the products are sold (supermarkets, convenience stores, markets, pharmacies, direct channels, or online). Compare the quality of the display (at yourself and at your competitors) and the share of the shelf for different products.

Step 6: Determining the positioning of all market players.

Competitor strategy analysis involves studying the positioning of all market players; it's not even about the products, but about how you (and competitors) are perceived by consumers in general. And he looks at this:

  1. Brand: popular or unfamiliar?

  2. Price: high or low

  3. Quality: good or not so good

  4. The product: common or specialized?

  5. The product is valuable because of its direct purpose or because it has other benefits.


Step 7: Evaluate promotional methods and advertising budgets.

Without data, it is difficult to outline your own reasonable competitive and promotional strategy. Data can be collected in the following ways:

  1. detailed, prescribing exact amounts of spending, coverage, and support measures;

  2. briefly, specifying only the format and options for advertising.

Examine the ad layouts; you'll find the main stigmas in them, plus you can analyze competitive strategies to persuade the consumer.

Step 8: Prepare a description of your competitors' key customers.

By studying demographic, behavioral, and psychographic segmentation criteria, you will get a portrait of your competitors' target customers.

competitors' key

Step 9: Assessment of the technological level of competitors.

In order to work out your own effective development strategy, it is necessary to find out what technological capabilities your competitors have (access to resources, highly qualified personnel, a reliable material base, low costs, etc.).

Step 10. SWOT analysis to assess the competitive advantages.

A brief SWOT analysis of each market participant is the final stage of competitive strategy analysis. You don't need an in-depth analysis, just take 1-2 themes for each of the SWOT positions.

After that, you can clearly identify your own competitive advantages and the strengths of your main competitors in the market.

Competitor Strategy Analysis Example.

Here's an example of how the SWOT method could be used to evaluate how competitive an online store is.

  1. The purpose of the analysis is to find the main competitors in the market and define the media strategy.

  2. Existing problems: few visitors, few sales.

  3. Situation in the sphere: the competition is fierce, and there are many large chain stores.

  4. Influence from outside: other stores are actively expanding their product lines, and the state strictly controls both the content and the assortment.

So, at the initial stage of analyzing your competitors' strategies, determine who your main competitor is that offers the same product as you (or a similar product). Examine it using all criteria, including attendance, customer reviews, product features, the type of advertising provided by the store, and the promotions it offers. Display the data visually, in the form of tables or graphs.

Competitive Analysis

Competitive advantages of the company are valuable qualities that allow you to present yourself favorably in the market and stand out from all the others. The task here is to work out a plan of action that will allow you to make a big profit and continue to develop successfully in the long term without losing your uniqueness.

A competitive analysis allows you to identify, improve, and maintain your own valuable advantages, which in the future will make you the leader of the industry. And to feel confident, you need to develop a business plan that will allow you to "pull" your competitive advantage from within your business or from external circumstances.