How do you use competitor analysis to your advantage?
Competitor analysis helps you find strategies to outperform rivals by understanding where each competitor sits on their journey, what you can learn from their product, price and customer experience, and where you are genuinely different. Differentiation is the goal, because differentiation is what drives margin.
How much time should you spend analysing competitors?
Enough to genuinely understand where each competitor sits on their journey, because that tells you where the clear space is. We map competitors across five stages. First, why the business started, usually backed by an early customer. Second, making it easier for those first customers, like a tea producer moving into tea bags and new flavours. Third, “making it happen”: scaling up and building the state-of-the-art tea factory, which is as far as many companies get. Fourth, being seen as the expert, where the CEO of Dilmah talks about tea the way a winemaker talks about wine, and customers happily pay more for that expertise. Fifth, setting the standard, often through a higher-order purpose, like Dilmah’s mission to employ as many people with disabilities as possible. Knowing your stage and your competitors’ stages shows whether you’re heading into clear space or straight into a fight.
What can you learn from your competitors?
Three things are worth studying closely: product, price and customer experience. On product, is their offering seen as the best in the market, or is there a gap you could fill? On price, some competitors choose to be the cheapest, some the most expensive, some in the middle, and you need to know where they sit and where you sit. On customer experience, the benchmark is the Apple Store: a seamless balance of human and digital, where they know who you are, someone appears with the product, you tap to pay and walk out. Others deliberately go the opposite way, low-touch pure e-commerce. Both are valid, because strategy is about choice. Above all, watch which competitors are growing fastest and work out why: is it their product, their price, their experience, or simply that they’re trusted to deliver on time every time?
How do you know if you’re actually different?
You have to take a hard, honest look in the mirror, because most claimed differences don’t survive scrutiny. It’s easy to say “we’re different because of our customer service”, then look around and realise everyone else says the same thing and delivers much the same. It’s just as easy to claim the best product or service in the market, then check carefully and find you don’t. Real differentiation matters because differentiation drives margin: if you’re genuinely more different than your competitors and hold an advantage, people will usually pay a little more for it. So unpack why you’re actually different, test each claim against what competitors really offer, and be willing to “zig when they zag”. Genuine, defensible differentiation is one of the most important outputs of competitor analysis.
How 24HRBP approaches this
In a 24 Hour Business Plan session we map where you and your competitors sit on that five-stage journey, then pressure-test your points of difference. The aim is to find the space where you can compete on a real advantage rather than going head to head on everything.
Watch the full episode on The 24HR Business Plan Podcast: Episode 3 - Competitor Analysis in Business Planning: Why It Matters
