2 Tried-and-True Methods for Improving Your Competitive Position
A competitor analysis framework provides a structured way to go about researching and understanding the competitive landscape. For any brand, knowing who the competition is and what they are doing is important. It’s a general good practice to tease out opportunities and stay ahead. There are several scenarios that might trigger the need for a competitive analysis due-diligence project including:
- Understanding performance on key metrics relative to competitors, e.g., market share, growth, pricing, distribution, marketing spend, etc.
- Identifying portfolio gaps or new product/white space opportunities
- Identifying opportunities to drive greater differentiation and improve profitability
- General strategic planning best practice
A competitive analysis should always be structured around the question you are trying to answer or decision it will drive. After all, there is an infinite amount of information you can spend time gathering about competitors. You need to be focused on the target information that will be helpful in achieving your end objective.
Below are two competitor analysis frameworks I often use when starting a competitive analysis project.
Competitor Analysis Framework: Side-By-Side Basic Grounding
Before diving into any in-depth detail, I have found there are three basic grounding components that are generally appreciated and should be part of any competitor analysis project:
- Category overview and size of key competitors: Defining up-front the category you are assessing, total category size (if available) and relative size/growth of key competitors will help ground your audience on the scope and parameters of the analysis
- Positioning of key competitors in the marketplace: This can include how key competitors talk about the category, emotional/functional benefits highlighted and relative price points. This is helpful to level set on why the competitors are relevant and to define the space they play in versus your brand
- Consumer profile of key competitors: Who are they targeting or reaching? For this, you can leverage available data or look at their website/social to see who they are targeting. This is helpful in identifying close-in competitors – those targeting similar segments as your brand versus those targeting completely different groups of consumers
Category X – Key Competitors
After establishing this basic grounding, diving deeper into detailed analysis of specific key metrics, products offered, investment details, etc. is often easier because everyone has the same foundational knowledge of who are the key competitors, why they are relevant and space they play in within the category.
SWOT Competitor Analysis Framework
SWOT analysis is a framework commonly used to summarize brand/company strengths, weaknesses, opportunities, and threats versus competition. This is a great, classic framework that takes into account both internal and external factors impacting a business.
The SWOT analysis is often visualized in a 2×2 matrix as illustrated below:
Strengths: What does your brand/company do well? What unique resources or advantages do you have versus the competition?
- Examples: Strong brand loyalty, strong balance sheet, patented technology, etc.
Weaknesses: What does your brand/company not do well? What needs improvement?
- Examples: Low brand loyalty, high debt, supply chain issues, etc.
Opportunities: What trends/opportunities could you take advantage of?
- Examples: Growth in eCommerce, favorable government policies, etc.
Threats: What threats could harm you? What is your competition doing that could negatively impact you?
- Examples: Rising cost in materials, increased competition, etc.
This is a helpful competitive analysis framework that brings it all together – summarizing what are the opportunities and potential pitfalls, while taking into account competition and other external factors.
Both competitor analysis frameworks provide a structured way to approach and share competitive research findings.
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