A competitive analysis is about finding out what the other guy is doing. I have experienced two reasons to perform a competitive analysis:

• To find different technology approaches for accomplishing the same or similar strategies needed to support the purpose of your site.
• To find out if someone is already doing what I want to do and how you can position your efforts so that you can share the market.

In the first case for example, if the purpose of your site is to post your resume, ask yourself "How are others doing this?" Other people who put their resume online aren't necessarily your competition for a specific job, they are fellow job seekers. Who has a great strategy that you can borrow? This type of analysis isn't just for non-competitive scenarios. You can use it as part of your analysis when determining how to compete with others offering what you are offering.

In the second scenario, assume you are trying to enter a business market where you need to compete with "the guy next door." You will want to identify how you are better, faster, cheaper, whatever. You will want to make sure your site is better than (if not just as good as) your competition. For example, you and your competition sell product A. Your competition uses PayPal and sends the customer off their site to Paypal to complete the purchase. If you could match the price but make the purchasing process easier, you might gain an advantage.

How does a competitive analysis help?

Performing a competitive analysis is one way to identify

• your target audience needs or wants
• benchmarks for performance and service you need to reach or exceed
• how you can differentiate yourself from others
• potential partners in your venture
• products and services that aren't being offered that you can offer
• opportunities to complete a product or service, not reinventing the entire wheel but simply offering something that improves on what is already there.

Conclusion

The competitive analysis can refine, expand, or change the purpose of your site. Bottom-line, you need to carve your niche by

• understanding what your audience needs
• determining if someone is meeting the needs
• assessing how the needs are being met
• creating a way to meet your audiences needs.