If the thought of doing a competitive analysis makes you want to go to lunch and never come back, we get it. It sounds tedious, overwhelming, and just straight-up boring. But if you want to build a strong, healthy brand—and own your portion of the market—it’s a mandatory exercise.

Whether you’re creating a brand strategy from scratch or somehow (conveniently) never did a proper competitive analysis, it’s time to buckle down and knock it out. Luckily, you don’t have to wade into the darkness alone—or drown in a ton of charts. We have a simple exercise that will help you find out what you need to know.

First, What Is a Competitive Analysis?

It’s basically identifying who your competition is, how they’ve positioned themselves, how they present themselves, and what their strengths and weaknesses are compared to you.

Why Do You Need to Do a Competitive Analysis?

To kick their ass—or, rather, to get an objective understanding of where they stand so that you can differentiate and position yourself for world domination. A strong competitive analysis helps you identify the similarities and differences between your competition to help you identify the unique ways you can outshine them.

The best time to do this is when you are launching or refreshing a brand, but if you’ve never done one, then now is the best time.

“The greater the insight into the competition, the greater the competitive gap.”

—Alina Wheeler, Designing Brand Identity

Who On Your Team Should Be Involved?

It depends on your brand maturity. If you’re totally new or a startup, you’ll want cofounders and, ideally, anyone in the company with any brand or design experience. If you’re refreshing or rebranding, you’ll want relevant stakeholders and a brand steward (someone who is in charge of overseeing the brand whether it’s their formal title or not).

How to Do a Competitive Analysis

Your competitive analysis can be broad or incredibly detailed. We’re guessing you’re a busy person with a few more meetings to get to (today alone), so we’re gonna go for the quick and easy route, but you can adapt as you see fit if you need a deeper dive.

Step 1) Assemble a List of Competitors

Do a brain dump of everyone you can think of in your space, including your archnemeses and people who could be perceived as competitors.

Step 2) Split Them Into Two Groups

Divide your list into two buckets: current and aspirational.

  • Current competitors: Brands that are your current competitors or in a similar space.
  • Aspirational competitors: Brands that you wish you could compete with (the Nikes, Apples, and BMWs of your industry).

Step 3) Document Brand Elements

Now it’s time to analyze how each individual competitor represents itself, from their tagline to their brand colors. You can be as detailed or as general as you like at this stage. Just remember your goal is to identify similarities and differences, so use whatever language helps you do this.

To save time, use this free spreadsheet template for your analysis. It includes a comprehensive list of every question to review about the competition, such as:

  • Vision, mission, values
  • Strength and weaknesses
  • Similarities
  • Differences
  • Threats
  • Value prop
  • Brand promise
  • Products/services
  • Etc.

Naturally, the more detailed you are, the better you can classify your competition. But even if you do a high-level analysis, you’ll notice particular trends in the way your competitors do things, such as similar visual identities (e.g, in the video-streaming sphere, Netflix and YouTube both use red) or messaging (e.g., a focus on features instead of price). These are the most valuable insights to help you better position yourself.

4) Articulate Your Own Identity

Document the same elements for your own brand. (If you don’t already have these elements articulated, you can follow our step-by-step guide to creating a brand strategy to guide you through the process.)

As you identify your position in the market, you’ll want to find a balance between:

  • Emulating things that brands you aspire to compete with do (e.g., compete on value)
  • Avoiding things that brands you don’t want to compete with do (e.g., compete on price)

The challenge is to do this while remaining original and authentic to who you are.

5) Find Your Niche

With a general idea of every brand’s attributes, grab a whiteboard and start visualizing your position with a Cartesian chart. (This exercise helps you truly “see” where you lie on the spectrum.)

Do several variations, plotting your competitors based on different polarities, such as:

  • Low cost vs. high cost
  • Low quality vs. high quality
  • Traditional vs. contemporary
  • People-focused vs. automated/scalable
  • Niche vs. comprehensive
  • Etc.

competitive analysis

Go Forth and Win

By the end of your competitive analysis, you should be able to answer this simple (and most significant) question: Why should a customer choose your products/services instead of the competition?

Read More: 3 Free Competitive Analysis Tools for Twitter