Which of the following is a common approach in competitor analysis?

Evaluating market position against rivals is a fundamental approach in competitor analysis. This method allows businesses to understand their strengths and weaknesses in relation to competitors, enabling them to identify opportunities for improvement and to capitalize on market gaps. By analyzing factors such as market share, pricing strategies, product offerings, and customer perceptions, organizations can better position themselves to compete effectively. This comprehensive view helps in formulating strategic plans, addressing competitive threats, and enhancing overall market effectiveness.

The other approaches mentioned lack the breadth necessary for a thorough competitor analysis. Focusing exclusively on internal performance does not provide insights into how a business stands in the market or what the competition is doing. Similarly, reviewing customers' preferences without considering competitors ignores how those preferences might shift based on rival offerings. Finally, a singular focus on digital marketing neglects other important aspects of the competitive landscape, such as traditional marketing efforts, customer service, or product quality. Thus, a holistic evaluation of market position against rivals encompasses all relevant factors critical to strategic planning.