A significant part of strategic marketing is understanding how you fit into the marketplace, understanding how your market evaluates your product or service against their other options, and amplifying your strengths, differentiation and true value to entice them to choose you.

The more you understand about your competition, the better, and a competitor analysis template can help!

A thorough competitive analysis will help you better understand the competitive landscape, allowing you to clarify your strengths as well as the challenges you’ll need to overcome to beat your competition in the marketplace.

It’s always a good idea to have already completed your quantitative market research and qualitative market research before completing your competitor analysis, but you can complete one at any time and gain value from it. A competitor analysis might also shed light on new opportunities, or identify mindshare already owned by a competitor that you might not be able to win.

At the minimum, it’ll give you an objective view of where you stand in the marketplace, and where you can win with your customer acquisition activities.

Use this as your competitor analysis template.

Competitor Analysis Template Step 1 – Evaluate Competition

Start by determining your direct, indirect and future competitors. Think about your market and ALL of the options they have when considering your product or service. Is your market local? Regional? National? International?

If you have multiple products or services, you should complete this for each. List your product or service (we’ll just shorten it to “product” for the rest of this article, but it will reference both) and the market you sell into.

Start by considering your direct competitors. These should be obvious, as they are the other products that are similar to yours that are readily available. List your top five direct competitors (or more if you’re in a crowded market) and include the relevant details. This could include the following:

• Company
• Product description
• Annual sales
• Year founded (or number of years in the market if you’re B2C)
• Market share
• Product positions
• Product trends
• Brand analysis

After you complete this, consider the other types of competitors

• Indirect – Their products are different from yours, but can potentially provide relief for the market.
• Future – They could easily expand their offerings to compete with yours.

The importance of indirect or future competitors varies by market and product. For example, over the past few decades, some early-stage technology companies failed to properly plan for indirect or future competitors like Microsoft, which commonly enters markets after a startup has proven viability for a product.

Because of its distribution and pricing power (i.e., the ability to bundle products and give them away for free), Microsoft can completely reshape technology markets in a short period of time.

Google, Facebook and other technology companies with massive user bases can be indirect competitors or future threats to many of today’s consumer technology companies.

List the top 5 for each and add the relevant details.

Competitor Analysis Template Step 2 – Create Your Final List of Competition

Next, it’s time to evaluate all of your direct, indirect and future competitors. You may wish to include other key executives in this exercise, as they may bring new insights and perspective. Talk through each and trim your list down to your final competitors.

You list size doesn’t matter, but make sure you have the time to rate each one in the next steps. It’s likely that most on your list will be direct competitors, but this exercise is valuable in helping you begin to think about indirect and future competitors as you shape your competitive strategy.

Competitor Analysis Template Step 3 – Select Competitor Rating Criteria

Next, you’ll need to determine the criteria you’ll use to rate your competitors and yourself to gain an objective view of the marketplace.

Different products in different industries or markets require different criteria, so choose the most effective criteria for you and your market.

Here are some suggested criteria that might be relevant:

• Product/Service Quality
• Product/Service Uniqueness
• Product/Service Features
• Product/Service Effectiveness
• Customer Service
• Price
• Innovation
• Market Share
• Distribution Channels/Power
• Brand Awareness/Name Recognition
• Reputation
• Corporate Citizenship
• Financial Strength
• Sales Ability
• “Cool” Factor
• Environmental Responsibility

You’re not required to select criteria from this list; pick the most important criteria for your market. Remember, don’t rate each solely on the criteria in this list. Your task here is to determine WHICH criteria you should be using.

If you’re unsure, try surveying your market to see what’s most important to them. (Here are instructions to audit a brand.)

Competitor Analysis Template Step 4 – Evaluate Competitors and Rate Each

Now, rate your competitors and yourself based on the criteria you’ve selected, with 5 being the best and 1 being the worst. Be as neutral as possible – pretend you’re a prospect who doesn’t know a lot about you or your competitors.

Here’s how your inputs should look:

Competitor Analysis Template Step 5 – Ratings Analysis

This is the final step where you’ll evaluate your ratings. Try to be as neutral as possible, especially when considering your own product.

Here are some points to consider:

• In which categories did you score higher than average?
• In which categories did you score lower than average?
• Are there any categories with consistently low scores across the board? Can you focus on those categories to differentiate your offering?
• Are your scores significantly different from those of many of your competitors? If not, the market may not see how you are different.
• Can you improve your scores to stand out?
• In what areas are you weak?
• Can you improve on these weak areas? If so, what do you need to improve them? And, should you improve on them?

Competitor Analysis Template Step 6 – Conclusions and Action Plan

Strategy without an implementation plan is wasted time and effort, so work with your executive team to create your implementation plan and calendar. This could be a simple as a one-month project, or as long as a 24-month plan. It all depends on your results!

You can also access 400 step-by-step plans for this task and almost any other marketing-related project by creating a free Qlutch account here.