Competitor analysis · Strategy · Market research
How to do a competitor analysis, with a worked example
By T. Krause
A competitor analysis full of unchecked prices and opinions can mislead you. Here is how to do one on a single grid, followed through a made-up meal-kit business, from choosing the rivals to the one decision the grid supports.
To do a competitor analysis, start with the decision it should help you make. List the rivals a buyer would really consider, including what they'd do if they bought nothing. Choose the four or five criteria buyers use to decide, fill the grid with facts you've checked and dated, then read across each row and down each column for a gap you could use.
The US Small Business Administration's guide to competitive analysis says it "should identify your competition by product line or service and market segment". It also lists what to assess, including market share, strengths and weaknesses, barriers to entry and "indirect or secondary competitors". A grid can hold some of that, and we come back to the rest near the end.
We make Prompt Board, and our competitor analysis template opens on the grid below. A spreadsheet works too, as long as it stays short enough to read in one go.
Start with the decision
"Understand the market" has no finish line, so you can't tell when you've done enough. Write one sentence at the top that says what the grid is for.
| Decision | What the grid needs |
|---|---|
| What should we charge? | Like-for-like prices |
| What should the sales page say? | The reasons buyers give, and where we differ |
| Should we enter this market? | Who's already strong, and on what |
The decision also tells you what to leave out. If you're setting a price, a rival's logo and social media following can stay off the board.
One grid for a meal-kit business
Everything in this section is invented: the business, its three rivals, the prices, the buyer calls, the dates and the decision. Rival A, B and C aren't based on any real company, and the figures don't describe the real meal-kit market.
A small meal-kit company wants to rewrite its sales page, and the question at the top of the board is "What should the sales page lead with?"
Who goes down the side
The team starts with three direct rivals. Then it adds an option the template doesn't have, because the SBA says to look at indirect competitors too. A person who cancels a meal kit doesn't always move to another meal kit. They may go back to the supermarket.
The template's advice is four to six competitors, counting what customers do instead, so three rivals and one alternative is enough.
What goes across the top
The team doesn't choose the criteria in a meeting. It calls eight people who recently cancelled or switched, and asks what they compared. Price, recipe choice and delivery speed all come up, so those become the columns. A last column, Weak spot, records what buyers complain about.
The grid
| Option | Price per meal | Choice | Delivery |
|---|---|---|---|
| Us | €6.50 | 24 recipes | Next day |
| Rival A | €8.90 | 40 recipes | 2 days |
| Rival B | €5.90 | 12 recipes | Same day, cities |
| Rival C | €7.40 | Vegan only | Weekly |
The Weak spot column reads Unknown brand for Us, Pricey for Rival A, Little choice for Rival B and Niche for Rival C. These four rows are on our sample board. Supermarket shopping doesn't fit the columns, so the team writes it as a note below the grid. It has no fixed price per meal, as much choice as the shop has and no delivery, and its weak spot is the time it takes to plan.
Checking the cells
The first draft came from memory, so each cell now gets a check. On a board, a small note beside the cell is enough, with the source and the date. Here are four of them, all checked on 2 March.
| Cell | Source | Result |
|---|---|---|
| Rival A, €8.90 | Order page | Correct |
| Rival B, €5.90 | Order page | First box only, with a discount |
| Rival C, Weekly | Help page | Correct |
| Rival A, Pricey | Six of eight calls | Correct |
The Rival B row matters most. A price only compares if it's the same box under the same conditions, so the team writes down its rule: two people, three meals, delivery included, no first-order discount. Under that rule, Rival B's price needs recording again, and the number on the board stays marked as discounted until someone does it. The Us row gets the same rule, which is easy to forget, and €6.50 holds.
If you can't check a cell, leave it empty. An empty cell tells you what you don't know, and a guess looks exactly like a fact a month later.
Reading the grid
Read down each column first. On price, the company is second-cheapest for now, and Rival B's lead may shrink once its discount comes off. On choice, it sits between Rival A and Rival B. On delivery, only Rival B is faster, and only in cities.
Then look for what nobody offers. Among the rivals with a general menu, nobody has more than 30 recipes for under €8. The company isn't there either, at 24 recipes, but it's the nearest. So "next-day delivery and 24 recipes for €6.50" is an accurate line for the sales page, and the team can defend each part of it. Whether buyers want a wider range badly enough to pay for it is a new question, so it goes to the next round of calls, and nothing gets built on it yet.
The company's own weak spot, "Unknown brand", doesn't change that line. It does tell the team the page needs to show who runs the company and how a refund works.
What the grid leaves out
The SBA's list is wider than any one grid. Before you decide anything large, answer the rest in a few sentences under the board.
| SBA's item | Question to answer |
|---|---|
| Market share | Who has most of the buyers? Is there any figure you can trust? |
| Your window of opportunity | Why would this work now, and how long could that last? |
| Barriers | What would slow you down, such as contracts, supply or regulation? |
Check the sources behind each answer in the same way as the cells, and say when you couldn't find a reliable one. A private company may publish no market share at all.
If the grid will appear on a public page with rivals named, ask a lawyer first. Rules on comparative advertising vary by country. A grid inside your team doesn't raise that question.
Competitor analysis, SWOT or PESTLE
| What you need to know | Board |
|---|---|
| How do we compare with each named option? | Competitor analysis |
| What are our strengths and weaknesses, and what's coming from outside? | SWOT analysis |
| What outside forces could change the plan, whoever the rivals are? | PESTLE analysis |
The results can feed each other. A strong rival might become one Threats note on a SWOT, and the grid holds the details behind it.
Frequently asked questions
What should a competitor analysis include?
The options a buyer would consider, the criteria they'd use, checked facts with dates, and what you've decided as a result. The SBA also lists market share, barriers to entry and indirect competitors.
How many competitors should you analyse?
Our template suggests four to six, counting what customers do instead. Each extra row is more cells to check and keep current.
Where do you find information on competitors?
Start with their own pricing pages, help pages and terms, then customer reviews and calls with people who bought or left. The SBA also points to public data on industries. Note the source and date beside each fact.
What is the difference between a competitor analysis and a competitive analysis?
People use the two terms for the same work, and we treat them as the same. The SBA says competitive analysis.
How often should you update it?
Whenever a decision depends on it. Prices and plans change, so re-check every cell you plan to rely on.
Make your own grid
Write your decision at the top, then list your rivals and the alternative a buyer would fall back on. Open the competitor analysis template, replace the meal-kit rows with yours, and leave a cell empty until someone has checked it. If the same rival keeps worrying you, carry it into a SWOT analysis.