How do you develop a competitive analysis for a consulting client?

1 Define the scope

The first step is to define the scope of the competitive analysis, which means deciding which competitors, markets, segments, products, or services you want to focus on. You should consult with your client to understand their objectives, expectations, and priorities, as well as their existing knowledge and data on the competitive landscape. You should also consider the level of detail and granularity that is required for the analysis, as well as the time and resources available.

2 Gather information

The second step in developing your strategy is to gather both primary and secondary sources of information on competitors and the industry. Primary sources include interviews, surveys, observations, or experiments with customers, suppliers, distributors, employees, or experts. Secondary sources include reports, articles, websites, databases, or social media. You should aim to collect quantitative and qualitative data on various aspects of the competitors' profiles such as their history, vision, mission, values, culture, structure, leadership, and reputation. Additionally, you should explore their performance in terms of market share, revenue, profit growth, costs margins and return on investment. Furthermore you should research their offerings such as products services features benefits quality prices and distribution channels. Additionally you should investigate their strategies such as goals objectives value proposition positioning differentiation segmentation targeting and marketing mix. Lastly you should analyze their capabilities such as resources assets skills competencies processes systems innovation and technology. All these aspects will help you identify the competitors' strengths and weaknesses including competitive advantages and disadvantages core competencies and vulnerabilities opportunities and threats.

3 Analyze information

The third step in the process is to analyze the information you have gathered, using various frameworks, tools, and techniques. This step is designed to identify patterns, trends, gaps, and insights that can help you understand the competitive dynamics and implications for your client. To do this, you can use methods such as SWOT analysis, Porter's five forces analysis, value chain analysis, benchmarking analysis, and gap analysis. SWOT analysis is a matrix that summarizes the strengths, weaknesses, opportunities, and threats of each competitor. Porter's five forces model evaluates the attractiveness and profitability of an industry based on the intensity of rivalry, bargaining power of suppliers and buyers, threat of new entrants, and threat of substitutes. Value chain analysis is a diagram that depicts the activities and processes that add value to a product or service. Benchmarking analysis compares key performance indicators and best practices between competitors and the client. Lastly, gap analysis identifies the gaps between the current and desired state of the client and competitors.

4 Visualize information

The fourth step is to visualize the information you have analyzed, which can be done using charts, graphs, tables, or diagrams. The goal is to present the data in a way that highlights the main findings and messages, while also being appropriate for the type and purpose of the data, as well as for the audience and context. To this end, some of the common types of visualizations you can use are pie charts to show proportions or percentages of a whole; bar charts to compare or contrast different categories or groups; line charts to demonstrate trends or changes over time; scatter plots to display relationships or correlations between two variables; and maps to illustrate geographic or spatial distribution or variation of a variable.

5 Interpret information

Interpreting the visualized information is the fifth step, which involves using logic, reasoning, and judgment to draw conclusions and implications from the data. Evidence and facts should be used to support arguments, as well as assumptions and hypotheses to test scenarios. Additionally, it is important to consider the limitations and uncertainties of the data, as well as potential biases and errors. Questions such as what the main similarities and differences between the competitors and the client are, what are the main drivers and barriers of competitors' performance and strategies, what are the main opportunities and threats for the client in the competitive environment, what are the main strengths and weaknesses of the client compared to competitors, and what are the main gaps and areas of improvement for the client to achieve its goals should be asked.

7 Here’s what else to consider

This is a space to share examples, stories, or insights that don’t fit into any of the previous sections. What else would you like to add?