In the first part of our Business Strategy Series, we dive into market analysis — understanding the industry landscape, customer behaviour, and competitor activity to make decisions about your business. 

Competitor and market analysis is a core component of effective business advisory work. While it’s part of the process before starting a business, it’s also an ongoing task that ensures your company remains aligned with current market conditions even well into its lifespan. There are enough cautionary tales of industry leaders who vanished from the market altogether as a result of complacency.

This type of research is not theoretical; it directly influences factors like pricing, positioning, service delivery, forecasting, expansion, and long-term planning. Businesses that maintain a consistent approach to market analysis adapt faster to challenges and identify growth opportunities earlier than their competitors.

Welcome to our breakdown of some key components of competitor and market analysis.

1. Define the Market

The market is the landscape in which you operate. It’s shaped by the people who buy, the companies you compete with, and the broader forces that influence supply and demand.

To define your market, identify these four clear parameters:

• Industry and sub-sector: What’s the broader industry you’re part of, and narrow it down to a specific niche if relevant (e.g. building industry → paint supplies, or healthcare → physio).
• Target customer segments: Who do you serve? For now, just stick to basic demographics like gender, age, profession, and income.
• Geographic reach: Define whether your market is local, regional, national, or global.
• Current demand levels: What’s the level of demand in your market? Is it growing, stable, or declining? This helps you understand whether opportunities exist for expansion, whether the market is saturated, and where there are emerging gaps to leverage.

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These help you focus on the competitors, trends, and benchmarks that matter most.

2. Assess Competitor Presence

Within your market, you’ll have both:

• Direct Competitors: Businesses offering similar products or services to the same audience.
• Indirect Competitors: Alternative solutions customers might consider instead of yours.

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For each competitor, the key attributes to watch are:

• Service offering and pricing
• Customer experience and delivery model
• Marketing strategy and messaging
• Online presence and brand positioning
• Customer acquisition channels
• Strengths, weaknesses, and performance trends

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A standard business advisory tool for this step is the SWOT analysis, which creates a clear and comparable profile for each competitor based on Strengths, Weaknesses, Opportunities, and Threats.

This process helps you uncover insights on the inconsistencies or gaps in your competitors’ offerings, and find the areas where your business can differentiate, such as: service quality, pricing structure, marketing tactics, product design, niche specialisation, speed of delivery, etc.

3. Analyse Customer Needs and Behaviour

This is where you can focus on deeper analysis into your target customer, trying to understand things like:

• What your customers need and value the most
• Pain points that influence buying decisions
• Trends in preferences, expectations, or behaviour
• Emerging demands created by technology, lifestyle, or economic shifts

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These insights are especially valuable during business planning, product development, and pricing strategy decisions for startups. For established businesses, it can also highlight when restructuring or repositioning may be necessary.

4. Evaluate The Environment

Aside from target audience and competitors, another category that can influence your business involves macro-environmental factors.

If you’re struggling to define the external areas influencing your market, try a PESTLE analysis. PESTLE stands for Political, Economic, Social, Technological, Legal, and Environmental. Some examples of PESTLE factors include:

• Inflation increasing operating costs
• Currency fluctuations impacting import-heavy businesses
• New workplace regulations
• Emerging software and automation tools
• Changing consumer values
• Declining foot traffic in retail
• Reduced demand for outdated technologies
• Supplier shortages
• Global disruptions affecting delivery times

5. Identify Opportunities and Risks

A better understanding of your market, competitors, audience, and environment can highlight certain opportunities to explore and risks to consider. 

Some possible opportunities:

• Underserved segments
• New service lines
• Pricing adjustments
• Efficiency improvements
• Gaps competitors cannot meet

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Examples of threats to be aware of:

• New entrants gaining traction
• Margin pressure from price-focused competitors
• Declining demand
• Withdrawal of suppliers or partners
• Changes in customer expectations

The Next Step

Competitor and market analysis is a foundational tool that guides many business decisions. It can give you ideas on: how to construct your business model, pricing structure or service packaging, and resource allocation — as well as bigger picture insights for overall growth planning (short and long-term).

However, your research is never over. You should review your findings every 6–12 months, constantly track changes across your sector, and compare your own performance data alongside market trends.

Some tools to gather data include customer surveys, interviews, and industry reports. Or, you can work with a business advisor for more structured analysis and implementation. 

In the next instalments of this blog series, we focus on the other key areas that go hand-in-hand with your business strategy:

• Financial structures
• Operational priorities
• Team building
• Marketing strategy

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If you have any questions for The Co., we’re happy to help.