It is important that you know why your customers think your business is better than your competitors as this will help you to understand what is your competitive advantage, and this will improve your business’s chances of success.

You can determine your business’s competitive advantage by undertaking a competitive analysis.  A competitive analysis allows you to determine what your competitors’ strengths and weaknesses are so you can improve your business’s own competitive advantage based on these.

CC-BY Wikimedia Commons -
CC-BY Wikimedia Commons –

Researching your business’s competitive advantage

To undertake this competitive analysis, you can use both primary and secondary data sources, however, the most cost effective way is by accessing and analysing readily available online information.  

While this means that you are only doing a surface level comparison, that some data may be dated, and that some online data sources are not as reliable or fit for purpose as undertaking primary research methods, such as focus groups and surveys, you can undertake the competitive analysis quickly and cheaply.  It can also determine whether you need to do more targeted analysis.

In this post, a case study of TripAdvisor’s possible competitive advantage as an online travel accommodation booking site will be used to demonstrate the competitive analysis process.

Step 1: Determine who your competitors are

The first stage of the competitive analysis is to determine your direct and indirect competitors.  A direct competitor is a business that provides a similar product in your region, while an indirect competitor is a business that provides a substitute product.  For example: TripAdvisor’s direct and indirect competitors:

Direct competitors Indirect Competitors

·        Wotif

·        Expedia


·        Trivago

·        Travel store or agent

·        Google Maps and Wotif will be considered as TripAdvisor’s top two competitors to do the competitive analysis.

Step 2: Conduct the research

There are 7 key areas of competitive advantage which should be used to compare your business against your top competitors.  

Here is how TripAdvisor compares to their competitors (together with the data source in italics and brackets):

TripAdvisor Wotif
Services they provide (Own websites) Online travel accommodation booking Online travel accommodation booking Online booking site for flights, accommodation, car hire, package deals and holiday activities
Target market (Own websites) Leisure travellers Leisure travellers Families
Profitability (Various news reports) Yes Yes Yes
Expanding or scaling down (Various news reports) Expanding Expanding Expanding
Length of time in business (Wikipedia) 2000 1991 2000
Positive reputation (Own websites) Independent ‘reviewers’ Find the lowest price Whole travel experience booked on one site
Negative reputation (Various review websites) Poor customer service,

Potential conflict of interest between reviewers and those hotels being promoted on the site,

Fake reviews

Poor customer service,

False claims of ‘best rates’ or using reward points

Poor customer service,

Bookings not being correct when people arrive at their destination

Step 3: Compare features and benefits

You can either use what you know are the key criteria to evaluate the features and benefits of your products and services against those of your competitors, or you can use the key criteria used by ‘Review Sites’ for your industry to do this.

In the online accommodation booking industry, review sites such as TopTenReviews, use a number of key criteria when evaluating accommodation booking services eg pricing, sorting of information, the amount of detail about the accommodation sites, the reservation process and booking help.  

TripAdvisor and Wotif did not make the 2017 Top 10 Hotel Booking Services, whereas was ranked no 8 in the world.  This gives a huge competitive advantage, and provides information to TripAdvisor about what they could be doing to improve their services.

Step 4: Undertake an operational (internal) analysis

The effective operations of a business can provide competitive advantage.  

This is how these 3 companies compared against one another (together with the data source in italics and brackets):

TripAdvisor Wotif
Financial resources (Wikipedia) Independent Owned by Expedia Owned by Expedia
Operational effectiveness (McCarter, 2017) Did not make the 2017 top 10 Hotel Booking Services Website ranked no 8 in 2017 TopTenReview for Hotel Booking Services Did not make the 2017 top 10 Hotel Booking Services
Product range (Own websites) Hotel bookings, reviewing and ranking Hotel bookings, reviewing Offers widest range of online travel booking products
Strategic partnerships (Wikipedia) Independent Owned by Expedia Owned by Expedia
Employees / Culture (Various review sites) Many employee incentives eg paid PD, dogs allowed at work, extra time off in summer, travel discounts, gym, free food Some employee incentives eg reimbursed/discounted travel, gym credits, health schemes Innovative entrepreneurial culture but poor people culture eg gossiping, highly competitive

Step 5: Determine market share

Business statistics websites like IBIS World and business review websites offer easily accessible online market share information.  These can be found (and sometimes purchased) by doing web searches such as:

  • Online travel accommodation website market share in Australia
  • Who leads the market in Australian online travel accommodation bookings?

According to IBIS World, in 2017 in Australia TripAdvisor was not even in the top four market share leaders in online travel accommodation websites, as these were:, Expedia, Luxury Escapes and Webjet. TripAdvisor needs to understand what these four businesses are doing to give them more market share in Australia.

Step 6: Determine competitive objectives and strategies

The competitive objectives and strategies of your business can provide a competitive advantage so comparing your competitive objective, and the strategies you will use to achieve this objective, against your competitors is very important.  

This is how these 3 companies compared against one another (together with the data source in italics and brackets):

TripAdvisor Wotif
Competitive objective (Various media reports) Grow market share in Australia Grow market share in Australia Protect/Maintain share in Australia
Strategy to achieve objective (Various media reports) Advertising Advertising and price Was bought out by Expedia

Step 7: Identify competitors’ strengths and weaknesses

By examining your competitors’ strengths and weaknesses you can put strategies in place to overcome or counteract their strengths as well as work out ways you can take advantage of their weaknesses.

Here are the strengths and weaknesses of and Wotif: strengths weaknesses
·        Ranked in Top 10 online hotel accommodation booking sites

·        Backed by Expedia, one of the largest online booking sites in the world

·        False claims on offers

·        Poor customer service

Wotif strengths Wotif weaknesses
·        Broad range of services which allows them to offer discounts

·        Strong Australian brand

·        Backed by Expedia, one of the largest online booking sites in the world

·        Poor customer service

·        Poor culture

Step 8: Determine your business’s competitive position and strategies to exploit

After reviewing these your competitors’ competitive objectives and strategies, as well as their strengths and weaknesses, it is now time to determine where your business’s competitive position should be, and how you business will achieve this.

Here are some suggestions that TripAdvisor could focus on so they have a clear point of difference to their competitors:

  • Competitive position: TripAdvisor is an independent online travel accommodation website which has a reputation for independent reviewing and ranking of travel locations and services
  • Competitive strategies: TripAdvisor could improve their competitive position by improving their website functionality and their customer service.

Final considerations

While doing a competitive analysis using a ‘desktop’ analysis via secondary sources of data only provides a surface level understanding of your competitors, it can help you better understand not only your competitors’ strengths and weaknesses, it can also help you discover possible competitive strengths and weaknesses for your own business.  This insight will help you better plan and deliver your business’s competitive advantage.

It is also important to understand that undertaking a competitive analysis is not a one-off event, and it should be done regularly, either quarterly, half yearly or annually.  This is because your competitors, the economy as well as political and social attitudes change frequently, thereby impacting your business’s competitive advantage.  Regularly undertaking a competitive analysis will provide your business with strategies to counter any changes which may impact its competitive advantage in the marketplace.


Note: This post was based on the work of the Edward Lowe Foundation – How to Conduct and Prepare a Competitive Analysis.


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