How to Analyze Competitors: A Competitor Analysis Guide With an Example

A competitor analysis tells you who you're really up against, what each of them does well, and where each one is exposed. Done right, it ends with one sentence you can act on: they can't defend X, so we'll own it. This guide walks through how to analyze competitors step by step, where to find the information, which tools help, and a filled-in example from a service business.

I've run this work from both sides of the table, as SVP of Sales and Marketing at a billion-dollar company with market position to defend, and as the founder of a company built from nothing. The method is the same in both seats. So is the usual mistake: a team spends a week describing its competitors in a spreadsheet and never names the one place it can win.

Key takeaways

• Competitor analysis means identifying the companies your customers could choose instead of you and evaluating their positioning, services, pricing, marketing, and reputation to find where you can win.
• Pick three to five competitors from evidence: who shows up when your buyers search, who you lose bids to, and who your customers say they considered.
• Almost everything you need is public: their website, reviews, ads libraries, job postings, and your own lost-deal notes.
• Organize what you find in a grid, score it, and read it for the weakness that doesn't overlap your own. That's your opening.
• Finish with a decision you can act on and repeat the analysis every quarter, because competitors' weak spots move.

What competitor analysis is

Competitor analysis, also called competitive analysis, is the process of identifying the companies you compete with and evaluating their products or services, pricing, positioning, marketing, and strengths and weaknesses, so you can decide where and how to compete. It covers three kinds of competitor:

• Direct competitors sell the same thing to the same customers. For a plumber, that's the other plumbers in town.
• Indirect competitors solve the same problem a different way. A home warranty company that sends its own contractors takes jobs a plumber never gets to quote.
• Substitutes include the customer doing it themselves or putting it off. They're easy to forget and often the biggest competitor of all.

A complete analysis looks at all three, because the competitor taking your customers is often one you weren't watching.

How to analyze competitors in five steps

Every useful competitor analysis follows the same five steps. Identify the right competitors. Gather the same information on each of them. Organize it into a grid you can compare. Read the grid for the weakness that doesn't overlap your own. Then turn that finding into a decision and keep the read current. The sections below walk through each step.

Step 1: Identify your real competitors

The companies you think of as your competitors and the ones actually taking your customers are often different lists. Build yours from evidence:

• Search like a customer. Use a private browser window and search your main services the way a buyer in your area would. Note who appears in the ads, the map results, and the first page of organic results. Repeat for each service and each part of your service area.
• Check your lost deals. Your sales notes, estimates that didn't close, and the bids you lost tell you who you actually lose to, and why.
• Ask your customers. When someone hires you, ask who else they called. Customers who left you for a competitor are worth a phone call of their own.
• Look at the review sites and directories. Google, Yelp, Angi, the BBB, and the directories in your trade show who your buyers compare you with.
• Use your ad data. If you run Google Ads, the auction insights report shows which advertisers compete in the same auctions you do.

Then narrow the list to three to five. A good set is the company you lose the most jobs to, the biggest name in your market, and one smaller business that does something well. More than five turns the analysis into a catalog and makes the weak spots harder to see. If you want a ranking, sort the rest into tiers by how often they come up and how directly they compete, and save the lower tiers for a lighter check.

Step 2: Gather the same information on each competitor

Collect the same facts for every competitor, so you can compare them side by side. Read each one for where it's weak, not just what it says. Here's what to look at and where to find it:

Stick to public information and your own records. You don't need anything a competitor hasn't put in front of customers, and the weak spots usually show up in the most ordinary places: a stack of reviews complaining about no-shows, an ad budget aimed entirely at homeowners, or six open technician positions that never get filled.

A shortcut for the first pass is the four P's of the marketing mix: product, price, place, and promotion. Run each competitor through the four, and you've covered most of what decides a purchase.

Step 3: Organize it into a grid and score it

Put what you found into a grid: one row for each thing that decides a purchase in your market, one column for each competitor, and a column for your own business. Then score every cell, say from 1 to 5, so you can see the pattern at a glance. Score yourself as honestly as the others. A grid where you win every row hasn't been filled in honestly.

A framework helps give the grid structure. A SWOT analysis sorts each competitor's strengths and weaknesses against your own. Porter's Five Forces puts one competitor in the context of the whole market: rivalry, buyer and supplier power, new entrants, and substitutes. Which framework you use matters less than using one. Structure is what keeps a competitor analysis from turning into a long list of facts.

Step 4: Find the opening

This is the step most templates skip. A filled-in grid describes your market. To find your opening, read it with three questions at once: where is each competitor weak, where are you weak, and where do those two not overlap? The answer you're looking for is something a competitor is bad at, that you're good at, in a part of the market that matters to buyers.

Pay most attention to weaknesses built into how a competitor operates. A rival that answers commercial calls through a residential call center can't fix that by next month. A rival with a slow website can. The first kind is an opening you can hold. The second closes as soon as they notice.

Search data is a good place to look. People who type "[competitor] alternative," "[competitor] vs," or "[competitor] reviews" are often unhappy customers looking for someone else. Those searches show you what bothers them, and a page that answers those questions puts you in front of them.

It's the oldest rule in strategy, Sun Tzu's "avoid what is strong, strike at what is weak," and our guide to the Art of War for business shows how it played out for two of our clients.

Step 5: Turn the analysis into a decision

Write one sentence under the grid: they can't defend X, so we'll own it. Then put your budget, your messaging, and your service area behind that sentence. If the sentence doesn't come out, the grid isn't finished.

For eight years we were the marketing arm of Response Team 1, later Venturi Restoration, a private-equity-backed restoration network. Restoration is won one local market at a time, so we ran competitor analysis market by market, reading each office's competitive set to decide the messaging, channel, and pricing that would make it the first call in that town. Each office ended up with its own message and its own spend. A single grid for the whole network would never have produced that.

A competitor analysis example, and a format you can copy

Here's the format filled in, using an illustrative example: a commercial HVAC contractor with eight trucks in one metro, sizing up three rivals. The grid is the working document. The sentence under it is what you act on.

The read: none of the three is built for property managers who need a commercial tech on site the same day. The franchise and the rollup are organized around homeowners, and the local shop isn't looking for new accounts. So the move is to own same-day commercial service for property managers in the four ZIP codes where our trucks already run, and to put the budget there instead of into the residential keywords the rollup is bidding up.

That's the format: one row for each thing that decides the purchase, one column for each rival plus one for yourself, a weak-spot row that forces a judgment on every column, and one sentence at the bottom that says what you'll own. Download the blank grid as a spreadsheet from our free competitor analysis template.

Tools for competitor analysis

You can do a solid competitor analysis with free tools and a spreadsheet. Paid tools save time once you're tracking competitors regularly.

Free

• Google Search, in a private window. The fastest way to see who shows up for your services in your area, in the ads, the map, and the organic results.
• Google Ads Transparency Center and Meta Ad Library. Both show the ads a business is running on Google and on Facebook and Instagram, so you can see a competitor's offers and messages without guessing.
• Google Business Profiles and review sites. Ratings, review counts, photos, categories, and the complaints customers leave.
• The Internet Archive's Wayback Machine. Old versions of a competitor's website, which show how their pricing and messaging have changed.
• Google Alerts. Email notices when a competitor's name shows up in the news or online.
• Job boards. A competitor's open positions show where they're growing and where they can't find people.

Paid

• Ahrefs, Semrush, and SpyFu. Estimates of the keywords a competitor ranks for, the ads they run, and the sites that link to them.
• Similarweb. Estimates of a competitor's website traffic and where it comes from.

AI assistants can speed up the gathering, such as summarizing a few hundred reviews into the complaints that repeat. Check what they produce against the source, because they state guesses as confidently as facts. Treat every traffic and spend figure from any tool as an estimate.

Competitive benchmarking: putting numbers on the comparison

Competitive benchmarking is the measurement side of competitor analysis. The analysis finds where a rival is exposed; benchmarking tracks how you compare, using figures you can check again next quarter. For a local service business, a handful of measures cover most of it:

• Reviews: average rating, review count, and what customers complain about.
• Search visibility: who shows up in the map and organic results for your buyers' searches.
• Paid presence: who appears in Local Services Ads and paid search for your core services, and how often.
• Price and offer: published prices, financing, guarantees, and maintenance plans.
• Hiring: open job postings, which show where a competitor is adding capacity or struggling to staff.

Benchmark against companies with a similar cost structure and customer base. Comparing yourself with a national brand produces a number that looks precise and means little. Repeat the same measures on a fixed schedule, because the trend tells you more than any single reading.

Common competitor analysis mistakes

• Too many competitors. Fifteen columns turn into a catalog nobody reads. Three to five is enough.
• Only direct competitors. The home warranty company, the national lead platform, and the customer who decides to wait are all competing for the same job.
• Comparing what customers don't care about. Score the things that decide a purchase in your market, such as response time, price, and trust, rather than every feature you can list.
• Grading yourself on a curve. If your own column is the best in every row, ask a customer to fill it in.
• Doing it once. Competitors change prices, get bought, and hire new managers. Last year's analysis can point you at an opening that has already closed.
• Stopping at the grid. The one sentence at the bottom is what turns the analysis into a plan you can act on.

How often to update your competitor analysis

Review it every quarter, and sooner when something changes: a new competitor opens, a rival is bought by a larger group, or your cost per lead jumps. The continuous version of this work is competitive intelligence, which keeps track of competitors' weak spots as the market moves instead of once a year. And before you commit to a major move the analysis surfaces, it's worth testing it in a business wargame against the competitors who would respond.

Turn your analysis into a 90-day plan