Competitive Analysis Template | How to Make a Competitive Analysis

We live in a fast-paced world where competitors pop up like daisies left and right.

 

In order for your product to survive this kind of environment, you need knowledge of what your competitors are doing and how you can improve on their methods, goals, and products. You need to do your UX research.

 

That’s where a competitive analysis, also known as a competitor analysis, comes in.

 

In this post, we will discuss what a competitive analysis is, why you should use it, the limitations of using it, the 5 exact steps to creating a competitive analysis, and how you can share your findings.

 

We’ll also show screenshots of a competitive analysis example we made as we go through the steps.


To use the free competitive analysis template we created for you, check below. You can find a PDF version and a Sketch version.

What Is a Competitive Analysis (aka Competitor Analysis)

Competitive Analysis Template

Competitive Analysis Definition: A competitive analysis is a comparison of features, methods, goals, and/or products or services of competitors in a matrix format.

 

The contents in your matrix will depend on what you need

 

If you’re doing user experience research, you might focus on comparing the main features your competitors are offering.

 

For example, if you are making a social media app, you might list news feed, create groups, and direct messaging as some features to compare.

 

If you’re an entrepreneur, you might list social media methods (for ads), user reviews, and the number of monthly users.

 

Ultimately, it’s up to your needs.

Why Use a Competitive Analysis

Some of the reasons to use a competitive analysis include:

 

  1. It’s a flexible tool that can be used according to your needs
  2. You can find value with this tool no matter your role, whether you’re a product manager, UX researcher, marketer, entrepreneur, etc.
  3. It’s a visual tool that you can easily share with team members, bosses, executives, investors, etc.
  4. You can be as nitty-gritty or high level as you require
  5. You can list both quantitative and qualitative data
  6. Your future decisions can be based on your competitive analysis findings
  7. You can find quick, valuable insights

 

Most major companies have done a competitive analysis at some point, from Google to Instagram to Airbnb.

 

Essentially, if you want clarity on where you stand compared to your competitors and how you can do better, a competitive analysis will come in handy.

Limits of a Competitive Analysis

We need to keep in mind that there is no perfect UX research method; this includes the competitive analysis tool.

 

The tradeoff of having a quick to see, visual tool is that you can’t go too much into the details of what your comparing.

 

It’s true that you can compare nitty-gritty details, like how many users visit the profile page of a website, but if you try to expand on your findings with a long description in each cell, your competitive analysis matrix will become convoluted and difficult to read.

 

The competitive analysis is not an in-depth research report; it’s an overview comparison tool that can quickly get everyone on the same page.

 

Another limitation is that a competitive analysis can be biased and based on personal opinion when you’re looking for qualitative information.

 

You may be scoring the design of websites on a scale of 1-5 in order to quickly assess them, but just because you give a website a 2.5 doesn’t mean that users also see the designs as a 2.5.

 

A third limitation is that you’ll be seeing what your competitors have but not what you can innovate.

 

If you’re looking to innovate new solutions, the competitive analysis won’t show you what new thing you need to create that hasn’t been done yet–it can only share what has been done. It won’t share specific, innovative, actionable insights.

Hearing from your users through a usability test might be better for that.

How to Make a Competitive Analysis

Now that you have a better understanding of what a competitive analysis is, you can make an educated decision whether to use it or not.


If you decide to move ahead with making one, here are the 5 steps to create a competitive analysis.

1. Know Your Goals

Before you start listing competitors, you need to know the reason you’re analyzing them in the first place.

 

There are a million and one things you can compare, so you need to narrow down what you want to be comparing.

 

Is your goal to advertise better than your competitors? Is your goal to have better features?

 

Having your goal defined beforehand will guide you on what to compare.

 

Not to mention, knowing your goals beforehand will inform you and your team on how to analyze once you’re analyzing your results.


Keep in mind, you’re not limited to one competitive analysis matrix. You can make as many as you want, but each one needs to have a focus as to not get convoluted in purpose.

2. List Your Competitors

At this step, you want to make a list of 5 – 10 competitors.

 

Having less than that probably means you haven’t searched hard enough, but having more probably means you’re listing too many indirect competitors.

 

Direct Competitor Definition:
A direct competitor is a competitor that is 1) targeting your same target audience/customers while 2) offering the same value proposition as you (in the form of a product or service).

 

Indirect Competitors Definition:
An indirect competitor is a competitor that might target your target audience/customers but doesn’t offer the same value proposition as you. It could be similar but not the same. Alternatively, they could be targeting a different audience/customer base but have the same value proposition as you.

 

If you’re an online meal kit subscription service, a direct competitor might be Blue Apron because you are both targeting customers searching for food online and offering a meal kit subscription service online.

 

An indirect competitor might be Amazon Prime Pantry because you are both targeting customers searching for food online but they are not offering meal-prepping packages (at the time of this writing that we’re aware of).

 

Here are a few ways to find who your competitors are:

  1. Search in Google, Yahoo!, or Youtube
  2. Ask on Reddit, Quora, or Yahoo! Answers
  3. Ask your users by conducting a usability test
  4. Ask your stakeholders or investors

3. List the Commonalities from Competitors

Some ideas of commonalities you can list during this step are:

 

  1. Features
  2. Methods
  3. Goals
  4. The good and bad features
  5. What’s working and not working
  6. Products offered
  7. Social media channels
  8. Number of online searches per month (Ubersuggest is a good tool for this)

 

What you list here depends on your goal, which you should have listed in step 1.

Some ideas of commonalities you can list during this step are:

 

  1. Features
  2. Methods
  3. Goals
  4. The good and bad features
  5. What’s working and not working
  6. Products offered
  7. Social media channels
  8. Number of online searches per month (Ubersuggest is a good tool for this)

 

What you list here depends on your goal, which you should have listed in step 1.

4. Design Your Competitive Analysis Matrix

Competitive Analysis Example

Now it’s time to put everything together and design the actual matrix.

 

To help you keep your purpose/goal in mind, we suggest writing your goal above the matrix.

 

Put the names of the competitors along the y-axis (i.e. vertically) to the left, and put the items your comparing along the x-axis (i.e. horizontally) at the top.

 

You can also put your own product/service in the matrix along the second row.

 

In the cells intersecting the x and y-axis points, you can put numbers, descriptions, screenshots, or whatever you really need to help you compare and analyze.

5. Analyze the Results

A great way to analyze the results of your competitive analysis is to write a short summary of your findings.

 

Some of the things you can write down include:

  1. What patterns do you see?
  2. Was there anything that was surprising?
  3. Are there any clear winners or losers?
  4. Are your competitors lacking, especially in one area?
  5. What are your biggest opportunities?
  6. Where do you recommend going from here?
  7. Do you need to do more in-depth research on one of the items?

How to Share Your Competitive Analysis

If you’ve done a competitive analysis, there’s bound to be information that your team or stakeholders can use.

 

And if you’ve written a short summary on the competitive analysis with the biggest takeaways and your recommendations, then you can easily and quickly share useful insights.

 

Sending your findings by email is always an option, but presenting in person is always better because your team and/or stakeholders are bound to have questions.

 

Some stakeholders like powerpoint presentations, so that’s another optional way for you to break down everything from your competitive analysis into smaller, slide-based pieces.


Once again, if you want the free competitive analysis template we created and used in this post, look below. You can find a PDF version and a Sketch version.

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[…] Analyzing other competitors on the market […]

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