How to Conduct a Competitive Analysis [Template Included]

Wondering if a competitive analysis is worth your while? Learn the benefits of conducting one before you build a new website or app as well as the six-step process for conducting one. A free competitive and SWOT analysis template is included.

Unless you’re developing a website or app for a product or market that’s never existed before, there’s going to be competition to contend with.

You or your client might be thinking, “I don’t care about them. Customers are going to want/need what we’re selling regardless.” That may be true. But your target users have to first discover your brand, then visit your website or app, and actively decide to go with you over the existing competition.

That means positioning your brand, website and overall digital presence so that it becomes the clear-cut choice. And you’ll need to understand what your competition is doing—both the good and bad—in order to do that.

In this post, we’re going to briefly look at the benefits of performing a competitive analysis when building digital products and experiences. Then we’ll go over the six steps to complete one.

The Benefits of Doing a Competitive Analysis

A competitive analysis is a process by which you compare a brand against its competition. During the analysis, you’ll learn more about what the competition does, their strengths, their weaknesses and how they’ve managed to connect with the target audience you’re after.

The point of a competitive analysis isn’t to copy all of the good things the competition has done. It’s to get clear on your own unique value proposition and to take advantage of missed opportunities in the market. It’s also to understand what works and what doesn’t with your target users.

When done right, a competitive analysis can be hugely beneficial to everyone working on a digital team. Here are some of the advantages that come from doing a competitive analysis:

• Lower the barrier to entry when you’re new to a market.
• Get to know your target user and their preferences better.
• Differentiate your brand with a unique value proposition.
• Learn what mistakes others have made so you can avoid them.
• Identify competitor weaknesses or shortcomings and turn them into your own strengths.
• Design digital experiences that really resonate with your target users.
• Craft more effective sales pitches and marketing campaigns.
• Spend less time reworking or rebranding your digital products.

A competitor analysis is the best way to gain a competitive advantage. Not only that, if you make competitive analysis an ongoing part of your process, it’ll help you overtake competitors whose innovation has stagnated.

How to Conduct a Competitive Analysis for Web Design

A competitive analysis done by a marketer or business owner vs. a web designer or developer is going to require a slightly different process. Or, rather, a different focus.

For example, a business owner would use a competitive analysis to evaluate the existing market and would pay a lot of attention to things like competitors’ products, pricing models and sales strategies.

As a web designer, that’s not really your concern. What you want to determine from this analysis is what’s going on with the competitions’ digital experiences so you can craft one that’s suitable for your shared audiences while making it stand out from the crowd (among other things).

Here’s how you’ll do it:

1. Identify Your Top Competition

In this first section, name your top three to five competitors. There are different types of competition you might want to compare yourself to:

• Direct competitors: They offer the same products or services and go after the same audience. They typically have a similarly sized business as yours as well.
• Legacy competitors: These are the big companies that have dominated your market for a long time.
• Indirect competitors: They target the same audience as yours, but offer a different kind of solution.
• Emerging competitors: These are new companies in the field. However, they are often seen as disruptors with innovative ways of solving existing problems.

It’s not a bad idea to compare your brand to competitors in each of these categories, if you can. That way, you’ll be able to see what sorts of expectations the legacy competitors have set, what you’re up against in terms of direct and indirect competitors, and how emerging competitors are shaking things up.

If you need help filling in the details above, start with a web search. Searches for “companies like” or keywords related to your specific niche should reveal who your primary competition is.

Next, go to Crunchbase. Existing companies with lots of public data will be there. This website will be particularly helpful for getting data about website visits and app downloads (under Technology).

Also, Moz has a free tool that can help you find website-related data. Use the Domain Authority Checker to gather the rest of the information.

2. Familiarize Yourself with Their Offering

The next thing to do is get to know your competitors’ offerings. You’ll need this information, in part, to be sure you’re comparing apples to apples.

For example, let’s say you’re looking at the website and messaging of Competitor #2. However, because they’re an indirect competitor, their unique selling proposition (USP) is different from yours.

Instead of selling a DIY product, they sell a done-for-you service. So while you can pay attention to their digital experience in terms of aesthetics and personality (since you target the same kinds of users), your content will need to be much different.

The table above will help you get clear on what each competitor’s offering looks like and how it differs from your own. It can also help you identify any gaps there are in the market. Users may be clamoring for better experiences or for more revolutionary solutions. So understanding what’s currently available and not working so well will be useful as you flesh out your digital experience and messaging.

3. Analyze Their Digital Experience

At this stage, you’re going to hone in on each competitor’s website or app. Ideally, if you’re building a website, then you should be comparing competitors with websites, not apps (and vice versa). While you can get inspiration from other kinds of digital products or experiences that your competition has built, this exercise is supposed to help you figure out what to do with what you’re specifically working on.

Take some time to move around each of the competitor’s digital products, experiencing them from your target user’s point of view. Get a feel for how it works, what’s effective, what’s not, anything that surprises you and so on.

Then use the table above to document what you saw and what you experienced.

It’ll be all too easy to make judgments or assumptions when looking at the competition’s products. So you need to turn those criticisms into hypotheses which you will test later on in the design process. Because, while you might believe that a lengthy homepage is ineffective, for example, your user interviews, A/B tests or heatmap analyses might prove otherwise.

So it’s important to keep the biases and professional criticisms out of it. It’s what your target users think that matters most.

4. Evaluate Their Tech Stack

You’re going to know what’s best in terms of a content management system (CMS) for your website or app. However, that doesn’t mean it’s not worthwhile to take a peek behind the scenes to see which technologies your competition has used to build their digital experiences.

The table above includes some of the technologies you might want to take a gander at. While you might be confident when it comes to picking a CMS, you might want some more help deciding on things like email marketing software or CDNs.

You can use BuiltWith to analyze the technology profile of your competitors’ websites.

5. Review Their Content Strategy

When you walk through your competitors’ websites, you’ll mostly be focused on the feel of the digital experience. In this step, you’re going to hone in on what they’ve written and how well it connects with the target audience.

Now, the goal isn’t to mimic what has worked for them, per se. Content and messaging are often what differentiate two lookalike brands from one another.

Think about other web designers, for instance. It can be difficult to make your offering look different from the competition, except for maybe with pricing or how much you include in your service. So you need a well-crafted brand and personality that attracts clients looking for someone specifically like you.

The point of this exercise is to find out how the competition is positioning themselves on an identity level. Then make sure your own identity and content are unique enough—yet still authentic—to win over your target users.

6. Perform a SWOT Analysis for Each Competitor

A SWOT analysis stands for:

• Strengths: In what ways does this company, its products and/or its digital presence succeed?
• Weaknesses: In what ways does this company, its products and/or its digital presence fall short?
• Opportunities: Is there a clear opportunity that this company has failed to capitalize on or make clear with their digital experience?
• Threats: In what ways can this company or their offering steal business away from you and why?

Create a SWOT table for each of your top competitors. This will give you a good summary of what you’re up against when developing a digital experience for your client or employer. Knowing what your own weaknesses are will allow you to lean more heavily into your strengths and to seize upon opportunities that others have missed.

Wrapping Up

Companies come and go. Some rise and some fall. Others shift into other markets, leaving room for new ones to emerge.

While your initial competitive analysis will be helpful when developing a new website or mobile app, it’s a good idea to conduct follow-up analyses once a year. That way, when things inevitably change in terms of who the competition is and what they’re offering, you’ll be able to stay on top of it and pivot your digital experience as needed. This is especially useful in fields like fintech, healthtech and AI that are rapidly evolving.

To help you perform your future competitive analyses, we’ve put together a reusable template for you to use. Download it now.