You may have wondered at some point why companies spend thousands of dollars just to understand their competitors. Why not put this money towards marketing instead?  Many modern businesses, however, fail to recognize that to successfully market their product, they must first understand the market and the key business players who work tirelessly to expand their reach. It's no surprise that competitive analysis is regarded as an essential component of any company's marketing strategy.

Modern businesses invest heavily in competitive research (or competitive intelligence) to identify their top competitors, track their actions, understand how they woo customers and assess the threat they pose to other similar businesses. Competitive research is a step in the process of gathering and analyzing information about competitors' content, data, and impact. But how important is competitor research? Every existing business has competitors. Even if you have the most unique idea in the world, there will inevitably be a business in operation that will become your first, or next, competitor. This is where competitor research comes in and helps your company stay afloat in a crowded marketplace.

How to Conduct an Analysis

a) Find out who your competitors are: Most businesses assume they already know their competitors and can almost count them on their fingers. Google can be your best friend when it comes to identifying your top competitors. Assume you have a furniture company in California. Simply searching "furniture store in California" will help you identify your competitors and show you which brands are running paid advertisements to get their websites to the top of the search results.

b) Investigate the type of content that your competitors are producing: Marketing is no longer about displaying your company's logo on large billboards. Every modern business is on content creation and publication binge for their existing and target audiences. You can analyze your competitors' existing content, the keywords they are targeting, and different ways to differentiate your brand's content with the help of content research.

c) Determine what other businesses are missing: Keep a close eye on every flaw in their business process, track every error they make, and look for their weak points. Don't be concerned! It is sometimes acceptable to spy on your competitors. The goal here is not to criticize your competitors, but to learn and look for those small opportunities where your company can shine.

d) Examine your competitors’ websites: Everything you need to know about them is just a click away. Companies are investing more heavily in their business websites than ever before and for obvious reasons. Seventy-five per cent of consumers admit to making credibility judgments based on a company's website design.

e) Examine what you need to do to outperform the competition: After you've gained a better understanding of what your competitors are doing correctly and incorrectly, you can finally reflect on your own process. For example, if they have a strong social media presence, you can get ideas from the type of content they post. Look for ways to reach out to more people and engage your customers more effectively than any other business.