COMPETITOR ANALYSIS

Before moving into the ‘Analysis’ stage, let us first define who our Competitors are.

In broad terms, Competitors (Competitive Rivals) are organizations with similar products or services targeting similar Customer Groups.

We need to create a scope and framework for our definition of Competitors, otherwise we would compare ourselves with millions of other Companies. Shall we as an automotive Company, compare ourselves with Hyundai and Porsche, for example?

Strategic Groups help us define ‘within which context’ shall we define our Competitors. Strategic Groups are organizations within an Industry or Sector, with similar strategic characteristics, following similar strategies or competing on similar basis. For example, in food trade segment, distributors, retailers, online marketplaces, corner stores each form different strategic groups.

In case there are Companies, who would create a future potential competitor threat based on theire strategic intent (new business line, new products or services, substitutes, new business models, new investment to scale-up etc.) should as well be taken into consideration.

The next step then would be to create a Competitive Matrix, by listing:

• Competitive Companies in rows
• Comparison Criteria in columns.

We can compare any dimension, which we believe is key for our analysis and building competitive strategies. For example:

• Product and Services: eg. product features, service components, product and service quality, number of SKUs,…
• Prices: of products and services…
• Business Results: revenue, profit, market share, growth, number of customers…
• Resources: Financial, people, assets, etc…
• Capabilities: eg. Financial, People, R&D, Innovation, Manufacturing, Sales and Marketing….
• Organization: number of managers, number of employees, people in different roles, qualification of people, key people, span of control, layers, etc.
• Compensation and Benefits: offered to their employees…
• Stakeholders: Key Clients, Shareholders, Partners, Suppliers, Channels…
• Strategies and Business Models…
• Strengths and Weaknesses…

To gather competitor insight, there are variety of resources and channels, which needs to be monitored periodically and over a time. CRM type of technologies need to be fed with such insight

1. Desk-based research may involve: competitor websites, digital and social media, search, Industry reports, advertisements, hiring ads, newsletters, surveys, …
2. Ongoing interviews: with clients, partners, suppliers, channels during sales calls, meetings and visits; candidates for hiring,… besides, organizing Focus Groups within the organization with people in different Touch Points (eg. Call Center, HR, Marketing, Sales,…) who has interaction with people in different occasions and might have accumulated some insight based on Customer or Employee feedback, complaint, suggestions…

Following a qualified ‘competitor intelligence gathering’ a robust Analysis need to be performed:

• Comparing and finding the Best, Worst, Emergent, Potential…
• Deriving Opportunities and Threats for our Company..
• The Five Competitive Forces by Porter, would provide a useful starting point for strategic analysis. The Five Competitive Forces are: the threat of entry, the threat of substitutes, the power of buyers, the power of suppliers, and the extent of rivalry between competitors. Together they constitute an industry’s structure, which further would lead into consideration of our Strategic Choices.

Novida Global

I??k Deliorman