7 Competitor Analysis Frameworks To Give You an Edge

A competitor analysis framework is a must for anyone looking to survive and conquer their industry.

Competitive analysis frameworks differ from other types of market analysis in that they focus on understanding a company’s competitors in order to gain a better understanding of the competitive landscape. With a deeper understanding of your top competitors across different metrics, you’ll be armed with the strategic insights needed to develop a much more impactful digital research strategy, whether it aims to grow your audience, launch into a new market, or increase market share.

So, without further ado, let’s dive into the seven types of competitor analysis frameworks for industry analysis. Including what they are, and how to use them to survive and thrive in your market.

What is a competitor analysis framework?

A competitor analysis framework, market analysis framework or competitor analysis model, as they’re sometimes known, is a structure that business professionals use to research and evaluate their competitors. In other words, the art of knowing your enemy. Competitive frameworks gather vital information, such as a competitor’s business strategies, products, offerings, marketing efforts, sales, etc., into an organized visual model. And though competitive analysis might seem daunting, with the right frameworks, you’ll know exactly what information you need to gather — with zero guesswork.

Benefits of using a competitor analysis framework

Plugging your competitive analysis into a good framework can strengthen your business’ research strategy. If you’ve had trouble achieving any of these, competitor analysis models could be the answer:

• Identify market shifts: Frameworks can make it easy to discover market shifts that you might’ve missed if your competitor analysis wasn’t previously visually organized well.
• Locate gaps you didn’t even know you had: Examining businesses within a specific industry can reveal gaps in your own strategy compared to your industry at large, which may spark inspiration for a new business idea, product, or offerings.
• Target the most effective marketing strategies: By pinpointing the marketing channels that worked well for your competitors, you can create a data-backed roadmap to march confidently forward with your own marketing plans.
• Avoid mistakes: In the same vein, you can avoid costly mistakes by looking at what didn’t work for your competitors.
• Create measurable (and achievable) goals: A good competitive analysis framework helps businesses build specific performance goals based on their competitors’ data.
• Make data more digestible: Frameworks help display dull or confusing information in a visually appealing and organized manner, making it much easier to share your findings with the rest of the team and investors or C-level executives.

Seven types of competitive analysis frameworks

1. SWOT Analysis

Talk about an old faithful. The SWOT analysis has been around for decades, and for good reason. It organizes a company’s information into the following categories:

• Strengths: internal factors that provide benefits, like a highly trained staff.
• Weaknesses: internal factors that cause disadvantages, like a small marketing budget.
• Opportunities: external factors that pose opportunities, like high demand for a product offering.
• Threats: external factors that pose challenges, like an increase in the cost of supplies.

We recommend using SWOT analysis best practices to hone in on the strengths or weaknesses of your competitors. This is especially helpful for identifying potential competitive advantages your business may have over others, as well as finding areas for improvement.

2. Porter’s Five Forces

Porter’s Five Forces is a formidable framework created by Michael Porter, a professor at Harvard Business School. This competitive framework examines the five key market forces in any given industry, including:

1. Intensity of competitive rivalry
2. Threat of new entrants
3. Bargaining power of new buyers
4. Bargaining power of suppliers
5. Threat of substitutes

Porter’s Five Forces is especially useful for analyzing the competitive structure of an entire industry. This information will be helpful when shaping business strategies and creating targeted goals amid the expansive competitive landscape. However, you can also apply this framework to niche industries or specific market segments.

3. Strategic group analysis

A strategic group analysis does exactly what it says—it organizes competitors into groups based on the similarity of strategy.

There’s a wide range of ways you can group companies. Perhaps you’d like to group competitors by their marketing tactics, pricing strategies, or range of offerings. Don’t forget to place your own company into the analysis to get a better sense of who you’re most closely competing with and better understand the impact different strategies provide. For instance, if you discover that the top three most successful companies in your niche are all grouped into the same pricing strategy, it may be time to see if doing the same will benefit your own business.

4. Growth-share matrix

The growth-share matrix classifies your company’s products against the competitive landscape. This is an example of a competitor analysis that’s especially useful for big organizations with a large portfolio of products or offerings. A growth-share matrix is a chart divided into four quadrants to classify products or business units into:

• Stars: products with high growth and high market share. Invest more in these.
• Question marks: products (usually new ones) with high growth, but low market share. Decide whether to invest more (if convinced it will become a star) or give up on it.
• Cash cows: products with low growth but high market share that are usually used to fund investment in stars.
• Pets: products with low growth and low market share. Decide whether to reposition or give up on it.

Using this market analysis framework can help determine what’s worth giving priority to, what to reposition, and what to ditch.

Read More – How To Make The Most Of A Competitive Matrix

5. Perceptual mapping

Perceptual mapping, also known as positioning mapping, visualizes the perception of a company and its competitors on a plot graph. To use this competitive analysis framework, choose two factors to use as the basis for comparison, like perceived quality and price. Then, plot where your business and competitors fall on those two factors’ spectrum.

It’s great for obtaining a bird’s eye view of how customers perceive your company in relation to your competitors. Armed with that knowledge, your company can identify market trends and gaps and make adjustments to improve its existing positioning strategy. Smart and strong.

6. Business model canvas

This framework strips a business model to its bare bones, improving clarity and focusing on the most important factors. A business model canvas is a single analysis that’s divided up into nine elements:

• Customer segments: Who are the customers?
• Value propositions: Why do customers buy/use the proposition?
• Channels: How are propositions promoted, sold, and delivered?
• Customer relationships: How is the customer treated throughout their buyer journey?
• Revenue streams: How is revenue earned?
• Activities: What unique strategies does the business use to deliver its propositions?
• Resources: What unique strategic assets are required to compete?
• Partnerships: What can the business outsource so it can focus on its key activities?
• Cost structure: What are the major cost drivers and how are they linked to revenue?

7. Customer journey map

A customer journey map, also known as a user journey map, is a visual story of customers’ interactions with a brand.

First, all customer channels are mapped out—i.e., a company’s website, social channels, paid media, newsletters, email support, phone services, and face-to-face services (if the brand has brick-and-mortar locations). Customer journeys can then be mapped across these channels for each buyer persona. The customer experience at each touchpoint should be tacked on to the map, including key engagement metrics the customer hits. Below that, add how the brand responds to address the customers’ concerns. Finally, jot down what opportunities exist to improve the experience at each channel.

Utilizing customer journey maps can help gain insights into common customer pain points and how to improve them—not only within your own company, but for your competitors’ customers as well.

Pro Tip:Use Similarweb Consumer Journey Analyticsto uncover competitor strategies and performance metrics through all stages of the conversion funnel.

How to use a competitive analysis framework?

Now let’s see this all in action. Below is a case study of a digital analysis using competitive insights to make faster and better business decisions. All of the data collected can be used to plug into any of the various competitive analysis framework templates we have covered so far.

Overview: Steve is a Category Analyst at a market-leading homeware and furniture retailer in the U.S. His company has several business lines across categories such as sofas, bedding, kitchenware, and outdoor furniture.

Steve’s company has one to two competitors that are particularly strong in the sofa category. An email from senior management says that sofa sales at the company have been on a downward trend, and now Steve has to pinpoint why this is the case and present a recovery plan. No pressure, right?

Analyze the competitor’s digital footprint

For Steve to truly understand his competitors, he needs to build a digital view of each company and break down assets such as subdomains to spotlight any trends that indicate a competitor’s digital performance. For example, he can identify the unique number of visitors the competitor generates over time to compare online reach relative to his own company’s performance.

Steve can then use this data to see where the company is growing or losing traction. In the example below, the percent change column indicates one of the domains has had a 42% downward growth in the last 12 months.

This information gives Steve a quick and easy snapshot of his competitor’s online performance and its strengths and weaknesses.

2: Map out your market landscape

Once Steve has built a company view of his direct competitors, he can also analyze their websites to benchmark traffic and engagement data against his company’s overall performance. This will enable him to instantly identify who the market leader is and where he needs to be to improve his digital strategy. Utilizing Similarweb’s DaaS tools, he can integrate vast datasets directly into analytical platforms like Google Cloud or AWS, allowing for real-time visualization and more dynamic market landscape mapping.

Try plotting out graph-specific metrics such as monthly visits vs. percent month-over-month change to know exactly how he’s performing.

3: Analyze search interest

Next, Steve can assess the market demand for the sofa category and use search interests as a way to identify any emerging competitors that are gaining traffic share for related search terms within the United States. In this example, he can measure the search volume of traffic, see the overall search trend over time, and analyze which competitor is winning digital market share.

With these insights, Steve understands the overall trend for the market and can spot any specific competitors that he may not have considered before during his competitive analysis.

4: Understand traffic and engagement metrics

To learn how your competitor’s traffic and engagement metrics have grown or declined over time, benchmark your growth to your competitors’ to reveal if they’re growing at a faster rate, and that’s why they’re potentially winning market share.

In this example, Steve can see the year-over-year traffic growth for his competitive set and can see that one of his competitors grew its traffic by 80%, which is 5% more than his company’s website. Aha! At this point, Steve can use Similarweb to deep dive into the digital marketing strategy of his competitors to understand what’s causing that spike. He could discover that his competitor has an optimized paid search strategy, a marketing channel he previously overlooked.

5: Continuously track the competitive landscape

The last step for Steve is to continuously track and monitor the competitive landscape to identify potential threats and emerging players. This way, he can quickly react to any changes in his competitive landscape and investigate the root cause using smart insights.

Start crafting your competitor analysis framework

Now that you know how to use all seven competitor analysis frameworks, it’s time to decide which ones work best for you and then get to it!

Try Similarweb for free and find out for yourself how our research tools can strengthen your competitive analysis.

FAQ

What is a competitor analysis framework?
A competitive analysis framework is a model or tool marketing professionals can use to compare their business plan or marketing strategy with their competitors.

How do competitive analysis frameworks differ from other types of market analysis?

Competitive analysis frameworks differ from other types of market analysis in that they focus on understanding a company’s competitors in order to gain a better understanding of the competitive landscape.

Which tools are used in competitor analysis?
Some of the tools used in competitor analysis include a customer journey map, growth-share matrix, SWOT analysis, and Data-as-a-Service (DaaS) to access expansive datasets that feed directly into competitor analysis tools, enhancing the granularity and scope of competitive insights.

What are the main components of a competitive analysis framework?
The main components of a competitive analysis framework include researching competitors’ product offerings, pricing models, marketing strategies, and customer service approaches.

What are the benefits of using a competitive analysis framework?

The benefits of using a competitive analysis framework include gaining insight into competitor strengths and weaknesses, understanding the potential impact of new entrants to the market, and developing an effective strategy to differentiate your own product or service. It can also provide a more holistic view of the market by uncovering emerging trends, changes in customer preferences, and opportunities to explore opportunities.