How to Write a Competitive Analysis (With Framework)

Investors roll their eyes at one thing more than almost anything else in a business plan: the claim that there are "no real competitors." Every business has competitors. Every problem being solved has alternative solutions. Pretending otherwise doesn't make your business look unique — it makes you look naive.

A competitive analysis does the opposite. Done well, it demonstrates that you understand the market, you know who you're competing with, and you have a specific, credible reason why customers will choose you. That's what gives investors confidence.

This guide walks through how to write a competitive analysis — identifying competitors, structuring the analysis, and communicating your differentiation.

What Is a Competitive Analysis?

A competitive analysis is a structured examination of the competitive landscape your business operates in. It identifies:

• Who your direct and indirect competitors are
• How they're positioned (price, features, audience)
• What they do well and where they fall short
• How your business is differentiated from them
• What advantages you have (or need to build)

A competitive analysis is typically a section of a larger business plan's market analysis, but it can also stand alone as a strategic document for internal use or investor materials.

Types of Competitors

Most founders think only about direct competitors. That's a mistake. There are three types to account for:

Direct Competitors

Direct competitors offer the same or very similar product to the same customer segment. If you're building project management software for architects, direct competitors are other project management tools targeting architects.

Indirect Competitors

Indirect competitors solve the same problem but with a different approach. Going back to the architecture example, indirect competitors might include general-purpose tools like Excel or custom-built internal systems that architects use for project management. Customers may choose these instead of your product, even though they're not purpose-built alternatives.

Substitutes

Substitutes are what customers do when neither you nor your competitors exist. A substitute for a business plan tool might be hiring a consultant to write the plan. A substitute for a fitness app might be hiring a personal trainer. Understanding substitutes tells you what you're ultimately competing against in the customer's mind.

Step 1: Identify Your Competitors

How to Find Competitors

Search the way your customers search. Go to Google and search for the problem your product solves, not your product category. "How to write a business plan" will find content competitors you'd miss by searching "business plan software."

Browse product aggregators. G2, Capterra, Product Hunt, and Crunchbase are good sources for software competitors. Amazon and Google Shopping for physical products.

Ask your target customers. Talk to people in your target segment and ask what they currently use to solve the problem. "What did you try before finding us?" is one of the most valuable competitive research questions.

Monitor job postings. Job postings reveal what competitors are building next and how they're positioning themselves.

Investor portfolios. Look at the portfolios of VCs in your category. If a firm has invested in a competitor, you'll find them there.

How Many Competitors to Include

Include:

• 3–5 direct competitors (the most relevant)
• 2–3 indirect competitors or substitutes (to show you understand the full landscape)

Don't try to include every competitor. A comprehensive list of 20 competitors makes the analysis unreadable and signals insecurity rather than thoroughness.

Step 2: Research Each Competitor

For each competitor you include, gather:

Basic information:

• Company name, website, founding year
• Funding raised (for startups) or size/revenue (for established players)
• Geographic focus
• Target customer segment

Product information:

• Core features and use cases
• Pricing model and price points
• Technology or platform
• Integration ecosystem

Market position:

• Customer reviews (G2, Capterra, App Store, Trustpilot)
• NPS if available
• Most common praise
• Most common complaints

Marketing and sales approach:

• How do they acquire customers?
• What's their positioning and messaging?
• Content marketing / SEO strategy
• Paid channels they run

Financial signals:

• Growth rate (from press releases, job posting volume, traffic data)
• Recent funding or M&A activity
• Rumored challenges

Where to find this:

• Competitor websites and pricing pages
• LinkedIn (team size, recent hires, job postings)
• Crunchbase or PitchBook (funding)
• G2/Capterra (product reviews)
• SimilarWeb or Ahrefs (traffic and SEO)
• Press coverage and blog content

Step 3: Build the Competitive Matrix

A competitive matrix summarizes your research in a visual format that makes positioning immediately clear. Two common formats:

Feature Comparison Matrix

A table comparing your product and each competitor across relevant features or dimensions.

Keep the comparison dimensions focused on what matters to your target customer. If your customers care about integrations and support but not about the number of templates, include integrations and support — not templates.

Positioning Map

A 2×2 chart positioning competitors on two axes that matter to your customers. Common axes: price vs. quality, ease of use vs. power, specialization vs. breadth.

Example: For a project management tool, the axes might be "ease of use" (x-axis) and "construction-specific features" (y-axis). Your positioning might be high ease of use + high construction specificity, filling a gap no competitor occupies.

Choose axes that show your differentiation, not arbitrary dimensions. The positioning map should tell a clear story: "No one else is here, and our customers need someone to be here."

Step 4: Identify Competitive Advantages and Gaps

After mapping the landscape, analyze:

Where are you stronger?

• Which dimensions matter most to your target customer?
• On those dimensions, do you outperform competitors?
• Is your advantage sustainable (hard to copy)?

Where are you weaker?

• What do competitors offer that you don't?
• Are those gaps relevant to your target customer?
• What's your plan to address the most important gaps?

What's the strategic white space?

• Are there customer needs that no competitor serves well?
• Are there customer segments that competitors have ignored?
• Is there a pricing tier that's currently unserved?

Examples of durable competitive advantages:

• Proprietary technology — An algorithm, model, or technical capability that's hard to replicate
• Network effects — Value increases as more users join (marketplace, social, communication)
• Data moat — Proprietary data that improves your product in ways competitors can't match
• Switching costs — Once customers integrate your product, it's costly to leave
• Brand — Trust and recognition that takes years to build
• Distribution — Exclusive channel access or partnership lock-in

Step 5: Write the Competitive Analysis Section

In a business plan, the competitive analysis is typically 1–3 pages within the market analysis section. Structure:

Opening paragraph

State the competitive landscape clearly. Who are the main players? What's the overall market structure? (Fragmented with many small players? Concentrated with 2–3 dominants? Emerging with new entrants disrupting a legacy category?)

"The business planning software market includes a mix of legacy document tools (Microsoft Word, Google Docs), specialized business plan tools (LivePlan, Enloop, Bizplan), and AI writing tools (various). The market is fragmented, with no dominant player owning more than 15% share."

Competitor profiles

For each major competitor, 3–5 sentences on who they are, what they do well, and where they fall short.

"LivePlan is the most established business plan software, with 1 million+ users. It offers structured templates, financial modeling, and pitch decks. It's strong on financial features for more experienced founders, but the interface is dense and intimidating for first-timers. It doesn't use AI or conversation-driven guidance."

Competitive matrix

Include your matrix or positioning map visually.

Your differentiation

Explain clearly where you're differentiated and why it matters.

"Unlike template-based tools that still leave users staring at blank sections, Calanio's guided conversation approach removes the 'where do I start' paralysis by asking specific questions and building the document from your answers. This makes it uniquely suited for first-time founders with domain expertise but no business planning experience — a segment that existing tools serve poorly."

Competitive advantages

Summarize the advantages you're building:

"Calanio's competitive advantages are: (1) conversation-guided workflow that removes the blank page, (2) output quality that results from structured inputs rather than free-form prompts, and (3) deep domain knowledge embedded in our AI flows — trained on business planning best practices rather than general-purpose instruction following."

Common Competitive Analysis Mistakes

"We have no competitors." If no one else is trying to solve this problem, either the problem doesn't exist or the opportunity is too small to attract investment. Both are bad news.

Only listing direct competitors. Indirect competitors and substitutes often capture more market share than direct competitors. Ignoring them shows a narrow view of the landscape.

Feature-by-feature comparisons on irrelevant dimensions. If your target customer doesn't care about a feature, including it in the matrix is noise. Focus comparisons on decision-relevant attributes.

Ignoring customer reviews. G2 and Capterra reviews are gold. They show you exactly what customers love and hate about competitors — the specific language, the specific frustrations. Use them.

Not updating the analysis. Competitive landscapes shift. A competitor that seemed weak 18 months ago may have shipped a feature that changes the dynamic. Revisit your competitive analysis quarterly.

Connecting to the SWOT Analysis

The competitive analysis feeds directly into your SWOT analysis — specifically the Threats and Opportunities quadrants. Competitive strengths inform the Strengths quadrant; gaps inform Weaknesses.

For a detailed walkthrough of SWOT analysis, see: SWOT Analysis: What It Is, How to Write One, and Why It Matters.

Using Competitive Research for Strategy

A competitive analysis is only useful if it generates strategic implications:

• If a competitor is strong where you're weak but your target customer doesn't care about that dimension, you may not need to close the gap.
• If a competitor is about to enter your most profitable segment, you may need to accelerate customer acquisition there.
• If a major competitor has a well-known weakness that your target customers complain about, that's your messaging opportunity.

The output of competitive analysis is strategic clarity, not just a completed table.

Building a business plan and need help mapping your competitive landscape? Calanio guides you through competitive analysis step by step with AI conversations that surface the right questions.