Competitive Analysis Business Plan

What’s the one thing you and your competitors have in common?

You’re all fighting for the same customers—and possibly Googling each other at 2 AM.

While the ambition is good, the approach isn’t.

You need to understand what your competitors are doing, why they’re doing it, and how you can do it better—and competitor analysis is your only way out.

So in this article, we’ll tell you how to conduct a complete competitive analysis for your business plan from scratch. Let’s get started.

Market analysis vs. competitive analysis

To understand the difference between market analysis and competitive analysis, we have prepared a table for you.

How to conduct a competitive analysis?

Follow these steps to understand how to conduct a competitive analysis for a business plan:

Identify your competitors

Create a list of direct (sell the same products/services) and indirect competitors (solve similar problems with different solutions). You can simply start with a Google search to see which businesses rank alongside yours or see on public forums what alternatives your ideal customers are going for.

Dan White is an SEO consultant who conducts competitor analysis for his clients. White says, “One of the big things I tend to focus on is who [my clients] share similar keywords with. It opens their eyes to understanding who they think their competitors are and who their competitors are, which are two very different things in Google.”

Study the target market

Understand the target market that you and your competitors share—you can look at demographics, purchasing behaviors, and needs and evaluate how your competitors meet customer expectations.

Establish common factors

Try to identify the common factors that you and your competitors share—such as distribution channels, products and services section, pricing models, marketing strategies, etc. as it helps you create benchmarks for comparison.

Assess strengths and weaknesses

Evaluate what your competitors are doing well and what they’re lacking to learn from their strategy and effectively position your company.

Identify opportunities and threats

Use the information you’ve gathered from market research to recognize the potential target market gaps your business can fill and the threats posed by your competitors.

How to write a competitive analysis in a business plan?

1. Determine who’ll read your plan

Depending on the audience who’ll read your plan, the information you offer in the competitive analysis report and its depth will vary. Generally, there are two types of audiences: internal teams and potential investors.

Internal purposes

If you’re doing a thorough competitor analysis for internal purposes—such as guiding your team or partners, the focus should be on providing actionable insights.

For example, if your team is working on a new fitness app, a detailed comparison of competitors’ features could help prioritize development efforts. The table might look something like this:

This table of the competitive analysis section can highlight where your app has a competitive edge such as gamification and better pricing, and where it might need improvement such as wearable integration.

If you’re a new business, you can also do a SWOT analysis here to assess your competitor’s strengths, weaknesses, opportunities, and threats for internal brainstorming.

External purposes

For external stakeholders like investors and banks, your approach should be persuasive—such as showcasing your market potential, growth trajectory, and competitive advantage in the particular market segment.

For instance, circling back to our fitness app example, here’s how you can highlight it:

This table provides potential investors with the information they need about your competitive landscape to understand your market dynamics and growth potential thoroughly.

You can also include a market growth chart alongside this table to highlight the increasing demand for fitness apps in general and the growing trend of gamification or rewards-based systems.

2. Showcase your competitive advantage

This section of competitive analysis involves highlighting your competitive advantage, i.e., what makes your own business stand out in your target market—such as innovation, pricing, or better customer service that will help you outperform your competitors.

For example, if you’re launching a fitness app, your competitive advantage might lie in personalized workout plans, seamless integration with wearables, and rewards-based gamification.

However, don’t limit your edge to your particular service and market segment. Instead, highlight every area you excel in—even tangible factors like brand reputation, operational efficiency, and more.

3. Lay out your strategies

Here, you can highlight opportunities or threats from market research—basically, show how your businesses respond to certain scenarios and overcome them.

Start by pointing out the opportunities and threats your business will have over your competitors and outline how your business will respond to them.

Let’s say your competitive framework of the fitness app shows scope for seniors as the younger target audience is already crowded—you can come up with features like larger fonts, simplified navigation, and exercises that focus on balance and joint health

Then move on to identify the potential threats that can come your way—and address how you plan to overcome them.

For example, if your competitors are lowering prices to get more customers, you can shift your focus to providing more value instead of getting into a price war.

Your goal here’s to communicate why your target customers should choose your business over others.

4. Know the pricing strategy

The pricing strategy of your competitors directly impacts your ability to position your business effectively.

That’s why, getting your pricing right starts with understanding what your competitors are charging and why. Look at their pricing models—are they using subscriptions, freemium plans, or one-time payments? Pay attention to what’s included at each price point and whether there are extra costs.

Comparing the features and value offered at different price levels helps you identify gaps in competitors’ offerings. Once you have a clear picture, compare it with your pricing to determine your competitive advantage.

Whether it’s offering more value at the same price or focusing on quality over cost, your pricing should highlight what makes your business the better choice.

For example, if competitors charge $30/month for a premium plan but lack gamified features, and your app offers them for $20/month, you’ve identified a pricing and value advantage. Let’s break it down in the table below:

This comparison chart highlights where your fitness app excels compared to competitors.

Should you hire professionals for competitive analysis?

Absolutely! You can research yourself by googling your competitors, but professionals bring industry knowledge, analytical skills, and experience with different business models. They know what metrics matter, where to find hidden insights, and how to analyze the collected data.

In fact, they elevate your ENTIRE business plan because they can refine your strategy, strengthen financials, and ensure your plan makes sense to investors and lenders.

Moreover, whether you need the whole business plan done, a second opinion, or just some expert tweaks, a professional provides the flexibility to get you the help YOU need.

Bottom line? Hiring a pro isn’t about doing things the “right” way. It’s about making the process easier, faster, and more effective so you can focus on growing your business and always be ahead of your competitors.

Business plan competitive analysis example

Here’s a competitive analysis example for business plans to give you a better understanding.

What if I have very few direct competitors?

Very little direct competition can be both an opportunity and a challenge for an entrepreneur. While it suggests less immediate or primary competitors, it also raises concerns about market viability and scalability.

Here are some questions you should ask yourself in that case:

• Is there a real demand for your product or service? A lack of competition could mean a lack of market interest.
• Are there indirect competitors? Even if no one offers exactly what you do, alternative solutions may exist.
• What barriers to entry exist? If others haven’t entered the space, is it due to high costs, regulations, or other obstacles?
• How will you educate your market? If your offering is new or unfamiliar, customer awareness and trust-building will be crucial.

Fewer competitors can be an opportunity to establish a strong first-mover advantage, but it’s important to validate the market before diving in.

The bottom line

Now, we hope you know how to conduct and write a competitive analysis for your business plan without feeling unfamiliar with your direct and indirect competitors, their marketing strategies, and their possible moves.

However, if the whole process of writing a competitor analysis seems daunting, consider working with experienced consultants at Plangrowlab. We help uncover direct and indirect competitors’ hidden strengths and weaknesses, find relevant opportunities, and deliver a competitive edge that’s hard to beat.

In fact, we create complete business plans that include a complete competitive analysis report, marketing efforts you’ll need, financial projections, primary and secondary research needed to understand your business, and more!

Instead of spending hours lost in research rabbit holes, take a smarter approach to competitive analysis.