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What is competitive analysis, and how to write it?

What is competitive analysis, and how to write it?

There are plenty of tools that everyone who had something to do with business consulting must have heard of. However, acquaintance with many of those is minimal, and so is knowledge, what goes into competitive analysis, and how it should look like. This could help people who want to expand their business, need to plan operations of the company they work for, or want to get a new, potentially useful skill. Here is a brief instruction on what competitive analysis is and how you create one.


The content of the competitive analysis should be focused on helping you make the right decision

A good analysis of market competition is identifying and concluding the features of the entity’s actual or potential competitors. The way you write a competitive analysis should be placed there on purpose to help you make optimal business decisions. Therefore what is crucial is following the right templates of what goes into a competitive analysis.

American economist Philip Cotler has created the most popular concept of what a competitive analysis should contain. What should be included in a competitor analysis? What goes into a competitive analysis in Kotler’s idea is:

  • Competition within the brand (entities offering similar products/services for a comparable price for the same group of customers)
  • Competition within the branch (companies offering similar products, no matter the price and target group)
  • Competition within the product group (entities providing products/services serving the same purpose)
  • Game in general (enterprises targeting the same consumer group)


In this part of writing a competitive analysis, you should focus on how the structure of competition and competitors themselves could influence the current and future situation on the market and how the market bounds will change the market situation under specific stimuli. To help you figure out how to write a competitive analysis that would be informative in all these dimensions, Kotler’s research is divided into thematic sections. Having defined the competitors, you should analyze their activity in four ways:

  • Their strategy
  • Their objective targets
  • Their strengths and weaknesses
  • Patterns of their actions and how they react to stimuli

In every stage of creating a competitive analysis, you should remember its purpose – what goes into competitive analysis should be processed into conclusions that would help you create a business strategy. For example, your competitors’ strengths and weaknesses should be perceived as opportunities and threats for your entity.


How you make a competitive analysis influences numerous future business processes?

It is worth noticing that in this pattern, the competitors and competitive mechanism are being analyzed multidimensionally; you get detailed information about every entity that would be competing for the same group of consumers and how the competitors of various sectors interfere with your business. The complex approach to the topic is a clear advantage of writing a competitive analysis.

If you manage to describe the market a company is operating on or is about to enter using the formula above. Remember that how you write a competitive analysis, how deeply you try to understand how your competitors function, what are their advantages and disadvantages in comparison to other market players, and how they could react to new situations. Since this tool is a crucial part of creating a business strategy, writing a competitive analysis should be focused on the quality of the material.

I would risk saying that no reasonable business strategy can be created without having made a detailed competitive analysis. How you write a competitive analysis is just a base for your business decisions, but the results of false identification of market factors could be catastrophic. However, if you follow Kotler’s idea and get the gist of what a competitive analysis is, you should get some beneficial information that would allow you to make optimal decisions.

Check out also how to create a marketing strategy.


Jerzy Ziarno

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