How to do Market Research on Competitors: A Step-by-Step Guide

Knowing who your competitors are is only the starting point. To understand how to compete effectively, businesses need to research what competing companies offer, which customers they serve, how they price their products, and why buyers choose them. To do market research on competitors, define your research objective, identify direct and indirect competitors, collect reliable market and customer data, compare competitors against consistent criteria, validate important findings, and turn the results into strategic recommendations. The process should combine secondary research, such as company websites and industry reports, with primary research, such as customer surveys and expert interviews, when direct evidence is needed.

This guide explains how to conduct competitor research step by step, which sources and methods to use, how to organize findings, and how to turn competitor data into decisions.

How to Do Market Research on Competitors: 7 Steps

A reliable competitor research process should move from a clearly defined business question to evidence collection, analysis, validation, and recommendations. The following seven steps provide a practical framework.

Step 1: Define Your Competitor Research Objectives

Start by identifying the decision your research needs to support. Without a clear objective, competitor research can become a collection of disconnected facts about other businesses.

For example, a company preparing to enter a new market may need to understand competitor positioning, customer demand, and pricing. A business reviewing its existing strategy may be more interested in customer satisfaction, product differentiation, or changes in competitor offerings.

Before collecting information, establish:

• Research objective: What decision will the findings support?
• Market scope: Which industry, product category, or service market will you examine?
• Geographic scope: Is the research focused on a local, national, regional, or global market?
• Customer segment: Which buyers, industries, or decision-makers matter?
• Timeframe: Are you studying the current competitive landscape or changes over several years?
• Evaluation criteria: Which factors will determine whether one competitor is stronger than another?

For example, a B2B software company evaluating a new market entry might set this objective:

Assess how established software providers serve mid-sized businesses in the target market, compare their pricing and product capabilities, and identify customer needs that remain underserved.

This gives the research a defined direction and prevents unrelated information from taking over the analysis.

Step 2: Identify Direct, Indirect, and Potential Competitors

The next step is to identify the businesses that influence your target customers’ purchasing decisions.

Competitors generally fall into three categories:

Direct competitors

These businesses offer similar products or services to the same customer segment. For example, two project management software providers targeting enterprise teams are direct competitors.

Indirect competitors

These businesses solve the same customer problem through a different product, service, or approach. A company selling project management software may indirectly compete with consulting firms that provide project coordination services.

Potential or emerging competitors

These include new entrants, businesses expanding into adjacent markets, and alternative solutions that could become more relevant to your target customers.

To build a competitor list, use:

• Search engines and industry-specific directories
• Trade association and industry publications
• Company websites and product catalogues
• Industry reports and public company disclosures
• Customer reviews and professional communities
• Industry events, conferences, and trade shows
• Interviews with customers, distributors, and industry specialists

Do not automatically treat every company appearing in search results as a meaningful competitor. Prioritize businesses based on customer overlap, product or service similarity, geographic relevance, and their influence on purchasing decisions.

For a focused project, a shortlist of five to seven relevant competitors can be a practical starting point. This is a working guideline, not a universal rule; the appropriate number depends on market complexity and the research objective.

Step 3: Collect Secondary Research Data

Secondary research involves analyzing information that already exists. It is usually a practical starting point because it helps researchers understand the market before investing in direct customer or expert research.

Useful secondary research sources include:

Use multiple sources rather than relying on a competitor’s marketing claims. A company website can explain how a business positions itself, but it does not independently prove that customers share that perception.

For every important finding, record the source, publication or access date, relevant evidence, and any limitations. This makes it easier to distinguish verified information from assumptions.

The U.S. Chamber of Commerce’s market research guide explains the role of primary and secondary research in understanding markets and competitors.

Step 4: Conduct Primary Research to Understand Customers and Competitors

Secondary data can reveal what competitors offer and how they present themselves. However, it may not explain why customers select one provider over another, what they dislike about existing solutions, or which unmet needs influence purchasing decisions.

That is where primary research becomes useful.

Primary research involves collecting new information directly from relevant participants through methods such as:

• In-depth interviews: Speak with customers, former customers, industry professionals, distributors, or other qualified participants.
• B2B surveys: Collect structured feedback from decision-makers and buyers across a defined target segment.
• Focus groups: Explore customer perceptions, product preferences, and reactions to competing offerings through moderated discussions.
• Customer interviews: Understand purchasing criteria, satisfaction, switching behavior, and reasons for choosing a particular provider.

For example, a business comparing three enterprise software providers could interview procurement managers and department heads to understand which factors influence their selection.

Useful interview questions include:

1. Which providers did you consider before selecting your current solution?
2. What were the most important factors in your final purchasing decision?
3. What did you find most valuable about the selected provider?
4. Which features or services did competing providers lack?
5. What problems have you experienced with your current provider?
6. What would make you consider switching to another supplier?
7. How do pricing, service quality, support, and reliability influence your decision?

The quality of primary research depends on recruiting participants who are relevant to the research question. A survey of general consumers, for example, may not provide reliable insights into a specialized B2B purchasing decision.

When designing surveys or interviews, define the target respondent, screening criteria, research questions, and data-handling approach in advance. The ICC/ESOMAR International Code provides professional principles for responsible research, including transparency, privacy, and the treatment of participants.

Step 5: Compare Competitors Using Consistent Evaluation Criteria

Once you have collected the information, organize it into a competitor comparison matrix. Every competitor should be evaluated against the same criteria so that differences are meaningful.

Depending on your research objective, the comparison may include:

A useful comparison should include evidence, not just labels such as “strong,” “weak,” or “expensive.”

For example:

This is an illustrative example, not research about actual companies.

If you need to rank competitors, you can use a weighted scoring model. Assign greater importance to the factors that matter most to the decision, score each competitor against those factors, and calculate the weighted result.

For instance, a business evaluating a new supplier might prioritize product quality and reliability over brand visibility. A company choosing a software provider might give more weight to functionality, integration, and customer support.

There is no universally correct weighting system. The criteria and weights should be defined before scoring and justified by the research objective.

Step 6: Analyze the Findings and Validate Important Conclusions

A comparison matrix shows where competitors differ. Analysis explains why those differences matter.

Look for patterns such as:

• Several competitors offering similar features but targeting different customer segments
• Repeated customer complaints about delivery, support, or product quality
• Pricing differences that are not explained by product features or service levels
• Customer requirements that existing providers do not adequately address
• New technologies or regulations changing competitive conditions

Use analytical frameworks only when they help answer the research question.

SWOT analysis can organize the strengths and weaknesses of a business alongside external opportunities and threats.

Porter’s Five Forces can help assess industry structure by examining competitive rivalry, supplier power, buyer power, the threat of substitutes, and the threat of new entrants.

Benchmarking helps compare specific performance or capability measures across competitors.

These frameworks serve different purposes. They should not be applied simply to make a report look more comprehensive.

Before treating a finding as a conclusion, validate it. Compare information from independent sources, check whether data refers to the same period and market, and investigate conflicting evidence.

For example, a competitor may advertise itself as the lowest-cost provider, but customer interviews may reveal that additional service fees increase the total cost. The research should distinguish the advertised price from the actual purchasing experience.

If evidence is incomplete, label the finding as an assumption or an area requiring further investigation rather than presenting it as an established fact.

Step 7: Turn Competitor Research Into Strategic Recommendations

The final step is to translate the findings into decisions. A competitor research report should explain what the evidence means for the business and what actions should follow.

Recommendations may include:

• Adjusting product or service positioning
• Reviewing pricing and packaging
• Improving customer support or service delivery
• Targeting an underserved customer segment
• Developing new features or capabilities
• Entering or avoiding a specific market
• Strengthening distribution or partnership channels
• Conducting further research where important evidence is missing

Each recommendation should connect three elements:

1. Finding: What did the research establish?
2. Implication: Why does this matter to the business?
3. Action: What should the organization do next?

For example:

• Finding: Interviews indicate that buyers in a particular segment value implementation support more than additional product features.
• Implication: Competitors emphasizing feature breadth may not be addressing this purchasing priority.
• Action: Test a service package that combines implementation support with the core product and assess buyer willingness to pay.

A useful report should also document its scope, methodology, sources, research dates, limitations, and confidence in key findings. This allows decision-makers to understand both the recommendations and the evidence behind them.

Why Is Competitor Market Research Important?

Businesses conduct competitor research to make decisions based on evidence rather than assumptions. A structured study can help organizations:

• Identify market gaps: Discover customer needs or service areas that existing competitors do not adequately address.
• Evaluate pricing: Understand how competitors structure prices and communicate value.
• Improve positioning: Identify meaningful differences in product quality, service, expertise, or customer experience.
• Understand customer preferences: Learn what influences buyers when they compare competing providers.
• Assess market-entry risks: Evaluate established competitors, substitutes, and barriers before entering a new market.
• Support strategic planning: Use evidence to prioritize product development, marketing, expansion, and investment decisions.

The value of competitor research depends on the quality of the evidence and how directly the findings relate to the business decision being considered.

What Are the Best Methods for Competitor Research?

The most suitable competitor research method depends on the information required, the target market, and the decision being made.

In practice, the strongest approach often combines several methods. Secondary research can establish what is already known, while primary research can investigate questions that public information cannot answer.

Is Competitor Analysis Primary or Secondary Research?

Competitor analysis can use both primary and secondary research. It is not limited to either method.

• Secondary research uses existing information, including competitor websites, annual reports, industry publications, public financial disclosures, and customer reviews.
• Primary research collects new information directly from participants through surveys, interviews, focus groups, or other research activities.

For example, reviewing competitors’ pricing pages is secondary research. Interviewing customers to understand why they selected one competitor over another is primary research.

The two approaches are complementary: secondary research helps establish the competitive landscape, while primary research can validate assumptions and reveal customer or industry insights that are not publicly available.

What Should a Competitor Research Report Include?

A competitor research report should make the findings easy to review and useful for decision-making. Its structure will vary by project, but a practical report usually includes:

1. Executive summary: The most important findings and recommendations.
2. Research objectives and scope: The business question, geography, customer segment, and timeframe.
3. Competitor profiles: Relevant information about each selected competitor.
4. Research methodology: Sources, interviews, surveys, and analytical methods used.
5. Competitor comparison matrix: Evidence-based comparison across selected criteria.
6. Market and customer insights: Important trends, buyer preferences, and unmet needs.
7. Competitive gaps and risks: Areas of opportunity, threats, and limitations.
8. Strategic recommendations: Prioritized actions supported by research evidence.
9. Sources and limitations: References, research dates, assumptions, and evidence gaps.

The report should distinguish observed facts, participant opinions, analytical interpretations, and recommendations. This prevents assumptions from being presented as verified market information.

Common Mistakes to Avoid When Researching Competitors

Even a detailed competitor study can produce misleading conclusions if the research process is poorly designed.

Avoid these common mistakes:

• Researching too many companies: Focus on competitors relevant to the target customer and business objective.
• Relying only on competitor websites: Public marketing material does not explain the complete customer experience or purchasing process.
• Treating assumptions as facts: Support important conclusions with evidence from reliable sources.
• Comparing inconsistent information: Make sure pricing, performance, and market data refer to comparable products, geographies, and time periods.
• Ignoring indirect competitors: Customers may solve the same problem through alternative products or services.
• Overlooking customer perspectives: Internal opinions about competitors may differ from actual buyer preferences.
• Collecting data without a decision in mind: Every research activity should contribute to the original objective.
• Failing to update findings: Competitor offerings, pricing, market conditions, and customer expectations can change.

Research quality also depends on responsible data collection. Use appropriate sources, respect privacy and confidentiality, and follow applicable laws and professional research standards.

When Should You Work With a Competitor Research Partner?

Internal teams can often handle an initial competitor review using public information and existing customer feedback. However, more complex projects may require specialist research capabilities.

External research support can be useful when a business needs to:

• Evaluate a new market or geographic expansion opportunity
• Understand a specialized or fragmented industry
• Compare competitors across several customer segments
• Recruit qualified B2B respondents for surveys
• Interview industry professionals or experienced decision-makers
• Validate market assumptions before a major investment
• Combine qualitative and quantitative evidence into a structured report

A research partner can help define the research scope, identify relevant participants, collect evidence, and synthesize findings. The appropriate level of support depends on the complexity of the decision and the information already available internally.

How Nexus Expert Research Supports Competitor Market Research

Nexus Expert Research supports businesses that need structured market intelligence to assess competition, understand buyers, and evaluate market opportunities.

Its market research capabilities include competitive intelligence, market landscape analysis, market sizing and segmentation, buyer and decision-maker research, and pricing and willingness-to-pay research.

Depending on the project requirements, research can combine:

• Expert interviews: To gather first-hand industry perspectives and specialist insights.
• B2B surveys: To collect structured feedback from relevant business respondents.
• Market analysis: To assess market dynamics, competitor activity, and emerging opportunities.
• Evidence validation: To compare findings across sources and distinguish reliable signals from assumptions.

The research process begins by defining the business question and target market, followed by sourcing relevant participants, conducting qualitative or quantitative research, validating findings, and delivering decision-ready insights.

Learn more about Nexus Expert Research’s B2B market research capabilities or explore its competitive analysis framework.

Conclusion

Knowing how to do market research on competitors helps businesses understand their position in the market, identify customer needs, and make better-informed strategic decisions.

A reliable process starts with a clear research objective, identifies relevant competitors, combines secondary and primary data, compares businesses using consistent criteria, validates important findings, and turns the evidence into practical recommendations.

The goal is not to collect the largest amount of competitor information. It is to identify the insights that matter most to the business decision and support them with credible evidence.

Need a Clearer View of Your Competitive Market?

Nexus Expert Research helps businesses assess competitors, understand industry dynamics, and gather buyer and expert insights through structured B2B market research.

Explore our market research capabilities to discuss a research project.

Frequently Asked Questions

1. What is competitor research?
Competitor research is the process of collecting and analyzing information about businesses competing for the same customers or market opportunities. It examines their products, pricing, positioning, customer experience, strengths, and weaknesses.

2. How do you identify competitors in a market?
Identify competitors by examining businesses that target similar customers, solve the same problem, or offer alternative solutions. Use industry directories, search engines, customer interviews, trade publications, and market reports to build a relevant shortlist.

3. How often should businesses conduct competitor research?
Businesses should review competitors regularly and conduct a more detailed analysis when entering a new market, launching a product, changing pricing, or responding to significant industry developments. The review frequency depends on how quickly the market changes.

4. What data should you collect when researching competitors?
Collect information about competitor products, pricing, target customers, positioning, distribution channels, customer feedback, market presence, and business developments. Record the source and date of each important finding.

5. What is the difference between market research and competitor analysis?
Market research examines the broader market, including customer needs, demand, industry trends, and market opportunities. Competitor analysis focuses specifically on competing businesses, their offerings, positioning, strengths, and weaknesses. Competitor analysis is one component of broader market research.