The first step in a competitor analysis is to identify and prioritize the competitors that actually influence your market. If you need a quick primer, start with an overview of what competitive analysis is. Do this with a clear scope, then build a focused list of direct, indirect and substitute rivals. From there you can collect the right data, compare like-for-like, and turn insights into quick wins for traffic, revenue and market share.
Why the first step matters for real growth
If you misidentify who you compete with, every decision that follows becomes noisy. The right first step narrows your field of view to the few players who set customer expectations, capture your prospects and shape pricing. It saves time, cuts research waste and makes your strategy actionable instead of academic.
Step 0 before step 1: define objectives and scope
Before you start listing rivals, decide what you want to learn and where you will look. This pre-step keeps your competitor analysis targeted and comparable across markets and time.
- Objective - What decision will this analysis inform? Examples: refine pricing for EU market, choose a defensible positioning for a new feature, identify content gaps to grow organic traffic 30 percent.
- Scope boundaries - Specify product or service lines, customer segments, geography and channels. Examples: SMB SaaS in the UK, e-commerce in DACH, marketplace vs direct sites, organic search only.
- Time horizon - Set a look-back period and update cadence. Quarterly for fast-moving SaaS, biannual for local services.
- Comparison rules - Define what you will compare across all competitors. Keep the criteria consistent to avoid apples-to-oranges conclusions.
- Output - Decide deliverables in advance, such as a 1-page summary, a competitor matrix, and 3 prioritized recommendations.
Guiding questions help keep scope tight. Which products do customers compare to yours when they shop today? Which search terms bring high-intent traffic in your market? Which geos or languages matter for the next 12 months? Which channels truly move revenue for your category? Write these down and treat them as guardrails. With objectives and scope set, you can identify the right competitors with confidence.
Step 1: identify and prioritize your competitors
Start broad, then focus. Capture three layers of competition from the customer point of view, not your org chart.
- Direct competitors - Offer comparable products for the same job-to-be-done to the same audience. Example: two project management tools for SMBs.
- Indirect competitors - Solve the problem differently or target an adjacent segment. Example: spreadsheets or workflow tools that teams use instead of a dedicated platform.
- Substitutes - Non-obvious alternatives that still get the job done. Example: hiring a freelancer instead of buying software, DIY instead of buying a service.
Use multiple sources to build your initial list: SERPs for your primary keywords, app stores and marketplaces, review aggregators, industry directories, analyst reports, social and community discussions, customer interviews, and your sales or success teams. For B2B, industry codes and market reports can reveal overlooked players. For e-commerce, search results, category pages and marketplace bestseller lists are reliable signals. AI can accelerate this discovery—see how AI supports keyword research and search intent analysis.
Then prioritize. Cluster your list into tiers based on overlap and impact:
- Tier 1 - High overlap in audience and use case, similar price band, strong visibility. Monitor closely and benchmark.
- Tier 2 - Partial overlap or emerging threat. Track selectively.
- Tier 3 - Low overlap or niche. Keep on radar.
Criteria to rank tiers include share of search on your core queries, product feature parity, pricing proximity, channel presence, geographic relevance and brand visibility. Aim to take 3 to 5 Tier 1 competitors into your deeper analysis. This is where your time pays off.
What to collect about your Tier 1 competitors
With your first step complete, move into structured data collection. Focus on comparable signals that map to customer choice and channel performance. The classic 4 Ps help you cover the basics, with digital depth layered on top.
- Product - Core features, breadth of offering, quality signals, onboarding or fulfillment experience, integrations and service level agreements.
- Price - List prices, discount patterns, bundling, freemium limits or shipping thresholds, and how pricing is communicated.
- Place - Channels used to reach customers. Owned site, marketplaces, app stores, resellers, geographies and languages covered.
- Promotion - Messaging and positioning, unique value proposition, ad presence, social proof types used, key content themes.
Add digital competitive signals that reveal where you can win:
- Search visibility - Top ranking pages and keywords, featured snippets, and missed keyword opportunities.
- Content gaps - Topics your audience searches that competitors have not covered or covered poorly.
- Backlink profile - Authoritative referring domains, patterns of link acquisition and potential toxic links.
- Traffic drivers - Pages that bring most traffic, seasonal spikes and channel mix trends.
- Experience markers - Page speed, mobile UX, checkout or trial friction, navigational clarity.
To speed up this discovery and keep it consistent, use SEO AI to surface opportunities and gaps faster.
Collecting this data in a consistent structure makes insights obvious. If your objective is organic growth, double down on search visibility, content gaps and backlinks. If your objective is pricing alignment, go deeper on packages, thresholds and perceived value. Stay aligned to your scope to avoid scope creep. Then translate those insights into execution with a focused content strategy.
Build a simple competitor analysis matrix
A matrix helps you compare competitors side by side and spot patterns. Keep it lean and aligned to your objective. Here is a starter layout you can copy into a spreadsheet:
| Criteria | Your brand | Competitor A | Competitor B | Competitor C |
|---|---|---|---|---|
| Primary positioning | ||||
| Key features | ||||
| Price band | ||||
| Top 5 ranking keywords | ||||
| Traffic driver pages | ||||
| Backlink authority signals | ||||
| Notable strengths | ||||
| Notable weaknesses |
Turn insights into a competitive edge
Your matrix should reveal where you can win and where to avoid fighting on their strengths. Translate findings into clear moves.
- Exploit gaps - Own keywords competitors ignore, build content around high-intent questions and create the best page on the topic.
- Sharpen positioning - Emphasize the value competitors cannot match, such as speed to value, integrations or total cost of ownership.
- Right-price the offer - Anchor pricing to outcomes, not features, and test packages where competitors cluster.
- Reduce friction - Improve onboarding, trial or checkout where rivals create drop-off.
Keep a short list of 3 initiatives tied to your objective. Assign owners, deadlines and success metrics so your first step leads to impact, not just documentation.
Prefer a structured engagement to go beyond step one? Explore our competitive analysis services.
One-day checklist to complete the first step
If you need speed, this flow gets you from zero to a prioritized competitor list in one day.
- Define scope - Objective, market, channel and time horizon.
- List candidates - Use SERPs for core terms, marketplaces, app stores, directories and customer interviews.
- Classify - Tag as direct, indirect or substitute from the buyer perspective.
- Tier and select - Rank by overlap and visibility, then pick 3 to 5 Tier 1 competitors for deep analysis.
- Lock criteria - Set the fields you will compare next, aligned to your objective.
How InSpace accelerates your first step
InSpace helps you complete the first step in competitor analysis faster and with more signal. We combine AI and deep data to identify, cluster and monitor your competitors in real time, then surface the gaps that drive growth.
- Competitive keyword analysis - See which keywords competitors rank for and where they miss opportunities.
- Content gap mapping - Discover topics you can own to capture demand they leave on the table.
- Backlink forensics - Understand authority sources and risky links across your category.
- Traffic intelligence - Pinpoint the pages and channels sending your rivals the most visitors.
- Realtime tracking - Get alerts when competitors ship features, change pricing or shift messaging.
Whether you operate in e-commerce, SaaS, local services or media, we turn your first step into a repeatable advantage and feed it directly into strategy and execution.
FAQs
What is the first step in a competitor analysis?
The first step in competitor analysis is to identify and prioritize your competitors from the buyer’s perspective. Start with direct competitors that solve the same job for the same audience, then add indirect and substitute solutions. Rank them into tiers based on overlap and visibility, and select 3 to 5 Tier 1 competitors for deeper benchmarking.
What are the steps of competitor analysis?
A practical flow is: define objectives and scope, identify and prioritize competitors, gather structured data using the 4 Ps plus digital signals, build a competitor analysis matrix, synthesize strengths and weaknesses and translate insights into strategic moves. Update the analysis on a cadence that matches your market speed.
What are the 4 Ps of competitor analysis?
The 4 Ps are Product, Price, Place and Promotion. Use them to structure what you collect: features and experience, pricing and packaging, channels and geographies, and messaging plus acquisition tactics. For digital markets, layer in search visibility, content gaps, backlink authority and traffic drivers.
What is the first step in competitor analysis is to identify potential blank?
The missing word is competitors. The first step in competitor analysis is to identify potential competitors across direct, indirect and substitute categories, then prioritize them by relevance to your customers and your defined scope.
