BDC Publishes Guide to Competitive Analysis for Businesses

The Business Development Bank of Canada (BDC) has published a guide for businesses on how to conduct a competitive analysis. The guidance was developed by BDC Senior Business Advisor Mallika Kazim.

The purpose of a competitive analysis is to help businesses assess their competitors' products, services, and sales tactics, evaluating their strengths and weaknesses relative to their own. BDC recommends performing a full competitive analysis at least once a year, given the constantly changing market data.

Kazim stresses the importance of a proactive strategy. "Don’t wait until a competitor launches a new product before changing your strategy," she advises. "Otherwise, you might end up in a reactive position to market changes. You want to be proactive—and it’s easier if you do this exercise regularly."

The analysis involves five steps, beginning with identifying competitors, including direct, indirect, and substitute competitors. Businesses are encouraged to use the North American Industry Classification System (NAICS) to identify competitors and gather benchmarking data on factors such as product, pricing, distribution, and marketing.

BDC states that the analysis helps businesses identify their unique advantages and potential barriers to growth, enabling them to strengthen their marketing and business strategies. Regular competitive analysis is presented as a key element of business discipline.