Measure performance and set targets

Competitor analysis or competitive intelligence helps you understand your competitors' strengths, weaknesses and strategies. It is a key tactic for finding out what your competitors are doing and the level of risk they pose to your business. Such analysis involves collecting publicly available information, such as market research, financial filings, online databases, press coverage, market reports or benchmarking data.

Benefits of competitor analysis

Analysing competitors can help you:

• understand your industry and market conditions
• refine your business strategy
• identify gaps in the market
• find ways to differentiate your products and services
• monitor competitor activity and product development 

Key questions to ask

Your competitor analysis should answer key questions, such as:

• who are your competitors
• what they offer
• how they price their products
• how the profile and numbers of their customers compare to yours
• what their competitive advantages and disadvantages are compared with yours
• how they may react to your market entry, product or price changes, etc

You will probably find it useful to benchmark your business performance and evaluate strengths, weaknesses, opportunities and threats to your business - this is known as SWOT analysis. This will show you how you are doing in relation to the market in general and specifically your closest competitors.

How to gather competitive intelligence

You can gather competitive intelligence in several ways, by monitoring:

• What competitors say about themselves - check sales literature, advertisements, press releases, shared suppliers, exhibitions, websites, competitor visits, company accounts.
• What other people say about them - your salespeople, customers, local directories, the internet, newspapers, analysts' reports, market research companies.
• Publicly available business information - trade bodies, industry reports and online databases.
• Commissioned market research - you can contract a commercial company or commission specific market research via an organisation such as the Market Research Society.

In Northern Ireland, businesses can get support from Invest Northern Ireland to research competitors and markets.