Use competitive analysis tools to help synthesize research results

Competitive analysis tools help you analyze research collected and anticipate competitor moves so you can stay a step ahead of your opponents. Competitors can be grouped in a couple of different ways. You can look at products and services that compete for the same customer dollars, which means evaluating competitors who offer the same type of product or service and those offering substitute products or services.  You can also group competitors according to the competitive strategies they use to extend their reach.

There are a variety of tools to help you evaluate competitors.  Some popular tools or methods are mentioned below, but are not detailed due to the wealth of information already available elsewhere on the Internet. Be sure to visit the “Discover more” section below for more information.

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Determine your competitor’s strengths, weaknesses, opportunities, and threats (SWOT) relative to your product or service offering. Strength and weaknesses are internal factors while opportunity and threats are external issues. See NetMBA.com, Emerald Works’ Mind Tools or Alan Chapman’s website, www.businessballs.com, for an overview.

The Boston Consulting Group’s (BCG) growth share matrix enables companies to determine how best to allocate scare resources or cash flow among the markets or industries they compete in. Each quadrant – dogs, cash cows, stars, and question marks – has a recommended marketing strategy to pursue. Bubbles can be drawn around each product/service offering to show sales volume of the entire market or show the sales contribution of that market to the firm’s profits. You can go further and show where your solution’s portfolio or products are positioned on the matrix relative to the competition to help anticipate competitor moves and/or more easily determine whether to invest or divest and to what degree.

The matrix does have limitations, however.  For instance, market growth and market share are not the only success factors, and ‘dogs’ (low market growth and low market share) may make more money than ‘cash cows’ (low market growth, but high market share).1, 2  Also, blank rules of what percent to invest or divest do not apply equally across the board of products and solutions.3   See the Internet Center for Management and Business Administration, Inc.article, “The BCG Growth-Share Matrix,” on NetMBA.com, Mind Tools “The Boston Matrix“, and the Management Study Guide “BCG Matrix” for more information.

Perform a Win-Loss Analysis of your company sales by tracking who your competitors are in each situation in order to uncover who your company won business away from and why, and conversely, who you lost business to and why. Performing this analysis, not only helps sharpen your messaging and refines your target customer profile, but it can help improve your sales processes while learning about your competition’s strength and weaknesses.

Be sure to supplement your analysis with updates shared in the press and other secondary resources on competitors. Keep an ear out at industry networking events where big wins and capabilities are mentioned. Above all else, however, maintain a close relationship with customers to gain their trust and insights in to those they do business with and why. Several online sources offer key insights. You can start with Bob Apollo’s Customer Think (blog) Go Beyond Win/Loss Reports and Find Out Why Others Chose ‘None of the Above’,” Shabnam Kakar’s article on “How to Conduct Win-Loss Analysis: A Step-by-Step Guide” found on Copper CRM, Inc. and David Brock’s blog article on “Performance Management Friday — Win/Loss Analysis” found on Partners In Excellence Blog.com to learn more.

Remember:  Each feature has a positive and negative benefit.  Use the features and benefits that resonate with your target audience.  By creating a chart, it’s easy to see a comparison between a listing of your product or service’s features and benefits versus your competition.  Remember:  Features describe what a product or service is, how it is purchased, or what it can do, while benefits describe what the product or service enables a user or buyer to achieve or satisfy in the end result.  For more insights, visit  Ivana S.Taylor’s article How to Use a Feature Benefit Table to Create an Irresistible Offer” on DIY Marketers (blog).

This framework has five forces of competition – supplier power, threat of substitutes, threat of new entrants, power of buyers, and the degree of rivalry or competition that comes from them  Michael E. Porter’s Competitive Strategy:  Techniques for Analyzing Industries and Competitors.Other sources where you can learn more about Porter’s 5 Forces include Investopedia US’s “Industry Handbook:  Porter’s 5 Features Analysis,” QuickMBA’s “Porter’s Five Forces: A Model for Industry Analysis,” and Business News Daily’s article by Marci Martin, “How Porter’s Five Forces Can Help Small Businesses Analyze the Competition.”

Some would add a sixth to Michael Porter’s 5 forces –  the power of complementary products that serve the market.  See Investopedia.com’s “Six Forces Model” for more information.

This tool by J.B. Barney provides a framework for analyzing how a firm’s internal resources compare to competitors.  Firms with resources that are valuable, rare, costly to imitate, and have an organization ready to capitalize on those resources will have a sustained competitive advantage. See Strategic Management Insight “VRIO Framework” for more information.

Discover more…

  1. Burstein, Daniel. “How to Write a Competitive Analysis (with 3 free templates).” MarketingSherpa Blog. Last modified May 18, 2012. http://sherpablog.marketingsherpa.com/research-and-measurement/competitive-analysis-tools/
  2. “BCG Matrix.” ManagementStudyGuide.com. Accessed June 27, 2020. http://www.managementstudyguide.com/bcg-matrix.htm.
  3. “How to Conduct and Prepare a Competitive Analysis.” Edward Lowe Foundation. Accessed June 27, 2020. http://edwardlowe.org/digital-library/how-to-conduct-and-prepare-a-competitive-analysis/.
  4. Jurevicius, Ovidijus. “VRIO Framework.” Strategic Management Insight. Last modified October 21, 2013. http://www.strategicmanagementinsight.com/tools/vrio.html.
  5. Mirman, Ellie. “Competitive Matrix Examples: 5 Ways to Compare Competitors.” Crayon (blog).  Last modified April 24, 2018. https://www.crayon.co/blog/competitive-matrix-examples..
  6. “Porter’s Five Forces Model of Competition.” ManagementStudyGuide.com. Accessed June 27, 2020. http://www.managementstudyguide.com/porters-model-of-competetion.htm.
  7. Porter, Michael E., “The Five Competitive Forces That Shape Strategy. ” Harvard Business ReviewLast modified February 14, 2017. http://hbr.org/2008/01/the-five-competitive-forces-that-shape-strategy/ar/1.
  8. “Reviews Organized by Markets.” Gartner, Inc. and/or its Affiliates. Accessed June 27, 2020. https://www.gartner.com/reviews/markets.
  9. Stroud, J. DeLayne. “Understanding the Purpose and Use of Benchmarking.” iSixSigma. Accessed June 27, 2020. http://www.isixsigma.com/methodology/benchmarking/understanding-purpose-and-use-benchmarking/.
  10. “The 8 Best Free Competitive Intelligence Tools in 2020.”  Consensus Point (blog). Last modified June 5, 2020. https://www.cipher-sys.com/blog/8-free-competitive-intelligence-tools-you-can-and-should-start-using-today.
  11. Whitler, Kimberly A. “How The Best Marketers Are Using Analytics to Create Competitive Advantage.” Forbes. Last modified July, 19, 2015.  http://www.forbes.com/sites/kimberlywhitler/2015/07/19/how-some-of-the-best-marketers-are-using-analytics-to-create-a-competitive-advantage/.
  12. Zucchi, Kristina, CFA. “Value Chain Analysis.” Investopedia, LLC. Last modified February 13, 2018. http://www.investopedia.com/articles/investing/111014/basics-value-chain-analysis.asp.
Sources:
1“The BCG Growth-Share Matrix,”Internet Center for Management and Business Administration, Inc., accessed June 27, 2020, http://www.netmba.com/strategy/matrix/bcg/.
2“BCG Matrix,” ManagementStudyGuide.com, accessed June 27, 2020, http://www.managementstudyguide.com/bcg-matrix.htm.
3Ibid.

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