A competitor analysis should help you decide how to win customers profitably. Its purpose is to understand which solutions your customers compare, what shapes their decisions and where your business can offer a better answer. Listing every business in your sector or copying its offer will not answer those questions.
An SME can produce a useful analysis without commissioning an expensive study. Define the right scope, gather comparable information, flag what remains unknown and turn observations into decisions.
This article provides a method, a comparison table to adapt and a fictional example involving businesses in French-speaking Switzerland. All prices and features in the example are illustrative and do not describe real companies.
At a glance
- Study the alternatives your customers actually compare, including doing the work internally or postponing it.
- Compare equivalent offers and distinguish facts, claims and unknowns.
- Use your table to choose a target market, shape your offer and identify the evidence you need.
Define the market from the customer’s perspective
Start with a specific buying situation. Who is buying, to solve which problem, in which area, with what budget and at what point? This definition determines which competitors matter.
A bicycle repair workshop in Lausanne does not compete with every bicycle manufacturer. For an urgent repair, a customer might compare another local workshop, the shop’s after-sales service and doing the repair themselves. Maintaining a company bicycle fleet involves different criteria and providers.
Competition therefore depends on the customer’s decision, as well as the business category or similarities between products.
Direct competitors, indirect competitors and the status quo
| Alternative | Definition | Example for a training business |
|---|---|---|
| Direct competitor | A comparable offer for a similar need and customer group | Another provider offering the same type of training |
| Indirect competitor | A different solution meeting part of the same need | Software that helps users complete tasks, or individual coaching |
| Internal solution | Work performed using the customer’s own resources | Training delivered by an employee |
| Status quo | A decision to change nothing or postpone action | Keeping existing practices despite their limitations |
The status quo is often a powerful alternative. A customer may recognise your value yet prefer an imperfect existing solution because change takes time, money or a willingness to accept risk.
If you cannot identify competitors, check how customers currently deal with the problem. The absence of an identical offer may indicate innovation, but it may also reflect limited urgency or willingness to pay.
Choose the businesses to compare
Select a representative group of alternatives that customers actually encounter. Five to eight providers can be enough for an SME’s initial analysis. This is a practical starting point, rather than a methodological requirement.
Include providers mentioned in lost sales, businesses appearing in your target customers’ searches and plausible indirect solutions. A national leader can be a useful reference, but should not dominate the analysis if customers mainly choose between local suppliers.
Explain why each provider belongs in the table. This avoids a flattering comparison built around businesses that perform less well on your favourite criteria.
Separate commercial competition from competition in Google
A highly ranked website may be a publication, directory or platform that does not sell your service. It competes for attention on a search query without necessarily being a commercial alternative.
Conversely, a business that wins contracts through referrals may be a significant competitor despite limited online visibility. Study both dimensions where useful, keeping them in separate columns.
A Google ranking observed at one moment is not a measure of market share. It varies with the query, location and other factors. Use it to identify providers and understand visible messages, without drawing conclusions about their revenue.
Choose criteria that influence purchasing
Base the comparison on your target customers’ expectations. A buyer seeking an urgent service may care more about response time than the size of the catalogue.
Talk to recent customers, lost prospects and the people delivering the service. Ask what actually shaped the decision, what ruled out options and what created confidence.
| Dimension | Information to collect | Decision it informs |
|---|---|---|
| Customer and use | Target customers, problem and buying occasion | Priority customer segment |
| Offer | Scope, options, exclusions and customisation | How to structure your service |
| Price | Charging basis, taxes, commitment and extras | Total cost comparison |
| Access | Area, channel, opening hours and response time | Sales organisation |
| Evidence | References, demonstrations and specific guarantees | How to reduce perceived risk |
| Service | Installation, support, returns and continuity | Service level to deliver |
| Claimed difference | Main promise and supporting arguments | Positioning and communication |
Only add a column if you know how you will use it. Follower numbers may matter little for a specialist B2B service, whereas the ability to work in a particular language may be essential.
Distinguish features from benefits
“Support until 8 pm” is a feature. “Getting help after your shop closes” is a benefit for a particular customer group. Connecting the two helps explain why a difference has value.
An extra feature is not automatically an advantage. It may complicate the offer, increase the price or go unused. Look for its effect on the customer’s work, risk, time or cost.
Collect reliable, traceable information
Start with official pages, catalogues, accessible terms, public demonstrations, published reports and genuine conversations with customers. Record a date and source for each observation.
Customer reviews can reveal recurring themes, but they do not represent all buyers. One review cannot establish that a competitor consistently delivers late. Record the signal and look for corroborating evidence.
Public registers can confirm a company’s existence and certain declared information. On their own, they do not establish its financial health, operational capacity or service quality.
Use four information categories
- Observed: information explicitly published or directly witnessed.
- Claimed: a supplier’s promise or reported testimonial.
- Estimated: a calculation based on explicit assumptions.
- Unknown: information that is unavailable or not comparable.
“Unknown” is better than an invented score. If the information is decisive, find a proportionate way to check it. Otherwise, keep the uncertainty visible in the decision.
Collect information fairly
Use public information and transparent commercial enquiries. Do not ask an employee to disclose a former employer’s confidential information or use a false identity to obtain restricted material.
You do not need to exchange future prices, margins or confidential commercial strategies with competitors. You can observe the market without coordinating business conduct.
Build a useful competitor comparison table
An effective table separates observed information, your interpretation and the decision you are considering. For complex offers, prepare one profile per competitor before creating an overall comparison.
| Criterion | Our business | Competitor A | Competitor B | Indirect alternative |
|---|---|---|---|---|
| Priority customers | Specify | Document | Document | Document |
| Comparable offer | Exact scope | Exact scope | Exact scope | Need covered |
| Comparable total cost | Basis and period | Basis and period | Basis and period | Cost and time required |
| Timing and availability | Actual commitment | Dated information | Dated information | Access limitations |
| Evidence | Verifiable material | Verifiable material | Verifiable material | Observable results |
| Important limitations | Known exclusions | Known exclusions | Known exclusions | Customer risks or effort |
| Source and date | Reference | Reference | Reference | Reference |
Apply the same criteria and evidence standards to your own business. An unfulfilled internal promise should not score better than an unverified external claim.
Put prices on a comparable basis
Compare the same duration, quantity and service level. Check setup fees, essential options, minimum charges, delivery and renewal. State whether figures include or exclude VAT.
For subscriptions, calculate the cost over a relevant period. An offer at CHF 90 a month with a CHF 600 setup fee costs CHF 1,680 in year one, before any other charges. An offer at CHF 130 a month with no setup fee costs CHF 1,560. Looking only at the monthly price would suggest a different result.
These calculations do not establish which offer is best. Scope, risk, timing and value still need to be compared.
Example: comparing office cleaning providers
Imagine a fictional business offering regular cleaning for small offices in French-speaking Switzerland. Its customers prioritise reliability, continuity and an understandable budget. It compares two fictional providers with an internal solution.
The common scenario covers the same premises and a defined cleaning scope. The prices below are entirely illustrative and exclude VAT.
| Criterion | Our proposed business | Provider A | Provider B | Internal provision |
|---|---|---|---|---|
| Positioning | Small offices with a consistent contact | Multi-service offer | Low starting price | Organised by the customer |
| Annual scenario cost | CHF 12,600 | CHF 13,800 | CHF 10,800, options to confirm | Calculate time, equipment and cover |
| Standard cleaning products | Included | Included | Usage-based supplement | Purchased by the customer |
| Cover for absences | Trained replacement planned | Commitment advertised | Undocumented | Must be arranged |
| Quality control | Monthly review proposed | Monitoring portal advertised | On request | Internal manager |
| Main limitation | Limited initial capacity | Wider offer than needed | Final cost and continuity unclear | Management time and availability |
A useful conclusion is a potential opportunity: a clearly defined service for small offices, with documented continuity and simple quality checks. This needs to be tested with buyers before claiming an advantage.
The table also exposes a weakness: initial capacity. The SME must not promise immediate availability across many sites unless it can assemble the necessary teams.
Turn the observation into a testable hypothesis
One hypothesis could be: “Small-office managers will accept a slightly higher cost than the entry-level offer if they understand exactly how absences and quality checks are handled.”
Test it by presenting comparable proposals to prospects who fit the target group. Record objections, reasons for decisions and whether you can deliver at the planned margin. A preference expressed in an interview does not by itself confirm a purchase.
Use a positioning map thoughtfully
A map can help visualise two important dimensions, such as total price and level of support, or standardisation and customisation. Choose independent axes that matter to customers.
Define the criteria before placing providers on the map. “Quality” is too vague without a measure. More observable criteria include the scope of support, contractual turnaround time or how many steps customers must complete themselves.
An empty space on the map does not prove a market exists. It may represent a combination customers do not want or that cannot be delivered profitably. The map raises a question to test.
Should you score competitors?
A weighted scoring system can support discussion when criteria and evidence are explicit. Weights should reflect importance to the target customer, rather than favouring areas in which your business is strong.
Avoid an overall score if too much information is missing or if some criteria are non-negotiable. A supplier that fails an essential requirement does not become suitable by scoring well on secondary features.
Turn the analysis into business decisions
Group findings by the decisions they inform: target customers, offer, price, distribution, evidence and service. For each decision, identify the supporting observation and the test still needed.
| Finding | Possible decision | Check to perform |
|---|---|---|
| Offers are difficult to compare | Clarify scope and exclusions | Ask prospects what they understand from the quote |
| Customers frequently mention poor continuity | Build a credible cover arrangement | Measure its capacity and cost |
| A segment receives an overly complex offer | Propose a simpler package | Test purchases and margins on a few jobs |
| Price competition reduces contribution | Strengthen a distinct benefit or change customers | Check perceived value and willingness to pay |
Use this work to inform your pricing strategy. A lasting difference often requires operational changes: better service needs the appropriate skills, processes and resources.
Connect your observations with customer segmentation and targeting, and with the key success factors in your sector. Competitor analysis helps explain alternatives; these other exercises help you choose the customers and capabilities worth investing in.
The comparison should help identify your market’s key success factors. Then use a SWOT analysis to assess your own position and choose an action.
Organise proportionate competitor monitoring
Assign responsibility for the table and set a realistic review schedule. An SME might review essential information each quarter while watching for major changes between reviews. Adapt the frequency to the pace of the market.
Salespeople can record which competitors appear in each opportunity and the reasons customers give for their decisions. After-sales staff can flag recurring expectations. This first-hand information often provides more value than constantly collecting social media posts.
Avoid changing your strategy with every competitor promotion. Look for repeated trends and changes likely to affect buying decisions or your economics.
Conclusion: choose a difference you can prove
Your analysis is useful when it lets you make a clear choice: which customers you want to serve, which benefit you will concentrate on and what evidence will support it.
Keep uncertainties visible and define the next test. An honest comparison that leads to three achievable decisions is worth more than an exhaustive report that always presents your business as superior without justification.
Frequently asked questions
How many competitors should you analyse?
Choose enough providers to represent your target customers’ alternatives. Five to eight can be a starting point for an SME, but the right number depends on the market. A detailed analysis of genuinely comparable providers is more useful than a long, irrelevant list.
How do you analyse a competitor that does not publish prices?
Record that the price is not public. Examine the charging model and available information without inventing a figure. If a transparent commercial comparison produces a relevant offer, document its scope and date.
Can a highly visible website reveal a company’s revenue?
No. Strong visibility or many followers do not establish sales or profitability. Any external estimates should be clearly labelled, with their limitations.
What is the difference between competitor analysis and SWOT?
Competitor analysis compares market providers and solutions. SWOT summarises your business’s strengths and weaknesses and external opportunities and threats for a specific decision. Findings from competitor analysis can inform a SWOT analysis.
What if every competitor appears cheaper?
First check that the offers and prices are comparable. Then examine your costs, value, target customers and included services. Cutting prices may be an option, but it must remain compatible with your contribution and ability to deliver your promise.
Romain Prieur is a Swiss certified public accountant and the founder of Entreprendre.ch. With more than ten years of experience in auditing and supporting businesses in Switzerland, he advises entrepreneurs on company formation, accounting and taxation.
