What Are the Different Competitor Analysis Tools?

A competitor analysis is an analysis conducted by one business firm in an effort to judge one or more of its business competitors. There are many competitor analysis tools available to companies, most of which deal with gathering the necessary information to conduct the analysis. Once all the pertinent information is collected, there are competitor analysis tools available that allow companies to process this information into a coherent set of useful information. From this, firms can tell the strengths and weaknesses of their business rivals and what actions should be taken to combat the influence of these competitors.

It is often necessary for businesses to perform a competitor analysis, especially in the modern business world where competition can come from practically anywhere. Performing a competitor analysis may be necessary as a strategic tool for the decision-making process of a company. Sometimes it can also be necessary to provide such an analysis to investors who want to know how an individual company can stand out in a crowded field. Luckily, there are many competitor analysis tools which can help a firm do an analysis that is both in-depth and insightful.

The first steps for any competitor analysis is the gathering of information on all competitors to be included. Computer search engines are excellent competitor analysis tools to first discover who the competition might be. Once this is done, websites can provide useful information on what a competitor is all about and what kind of business they conduct. If the company in question is publicly owned, financial information can also be obtained. Focus groups may also be used to get a feel for how the public feels about certain companies.

All of this research must lead to coherent results for the company conducting the analysis. One of the most useful competitor analysis tools is a comparison grid. This grid is a table listing certain aspects of the competition in comparison to the firm doing the analysis. The information included here should range from basic directory information to more detailed tidbits about products sold, customer service, and where each company's competitive advantage lies.

SWOT analysis, which analyzes strengths, weaknesses, opportunities, and threats, is one of the most proven competitor analysis tools and is another way in which information about a competitor can be processed. This analysis first breaks down the strength and weakness of a competitor. In conjunction with that, the firm conducting the competitor analysis must analyze what threats the competitor poses to their business as well as what opportunities exist for the firm to gain their own advantage.