competitive position analysis: How to Do a Competitive Analysis Template Included

It can help you group your competitors as rivals, contenders, ankle-biters, and emergents, depending on the threat they pose to you. As its name suggests, this graph uses the win/loss rate of players in the competitive landscape to classify them. This will help you seek out ways to increase your overall competitive success. Then you’ll have to determine certain categories or areas to compare yourself with your competition.

You can find these topic clouds in a social listening dashboard. From there, you can click on any topic to explore the mentions in-depth. You’ll usually find bits of this information on competitors’ websites. Which brings us to why competitor analysis is worth doing in the first place. It’s particularly hard (and confusing and incredibly time-consuming) if you’re relatively new in business. Even if you manage to dig something up, you always seem to be left with more questions than answers.

Porter gives the example of how the automobile competitive position analysis decided to vertically integrate, greatly increasing the barriers via newfound economies of scale. The things which stop new companies entering a market are referred to as barriers to entry. That’s the fundamentals of what we can learn from Porter’s Five Forces. Let’s take a closer look into each to understand how you could apply them to your company or situation while relating back to our source material. While we worry about direct jostling with close competitors, an investor might be looking at the raw economics of the market and formulating different questions.

Step 2: Compare key features

Confirmation bias means interpreting information based on the beliefs you already hold. This is bad because it can cause you to hold on to false beliefs. To avoid bias, you should rely on all the data available to back up your decisions. In the example above, the business owner may believe they’re the best in the SEO dental market at social media. Because of this belief, when they do market research for social media, they may only collect enough information to confirm their own bias—even if their competitors are statistically better at social media. However, if they were to rely on all the data available, they could eliminate this bias.

This approach uses another brand, category or audience as a reference point of their difference. Examples of their most important decision-making factors could include. If you don’t give your audience a compelling reason, they’ll find a brand that will. Requirement to provide the audience with that compelling reason. Notice the gaps your competitors are trying to fill when they bring new roles to their firms. If your product is worth more, your sales representative must be able to handle things and questions at the sales front.

If competitors have exclusive agreements with the key buying locations of your consumers, then you’ll find it very difficult to reach your consumers. Economies of scale – In many manufacturing industries products can only be offered cheaply because the cost of production per unit decreases as you produce larger volumes. Producing large volumes of a product requires refined knowledge of the materials you need, tightly honed production processes, and large investment in infrastructure and staff to deliver.

That’s why including different kinds of competitors into the analysis is critical if you want the results to be comprehensive. I know plenty of marketers who’ve worked on campaigns for brand new companies and would agree that the Wright Brothers had an easier time getting off the ground than most startups do. This is because running a business — especially for the first time with no guidance — can be, in general, a quagmire. Before you accurately compare your competition, you need to establish a baseline. Threats – These might include new taxes or regulations on existing products or an increasing number of similar products in the same market space that could negatively affect your overall share.

Learning can be a great way to gain skills in analyzing competitors as a part of developing a business. To build your competitive advantage and stay on top of your industry’s evolution, take the Business Strategy Specialization from the University of Virginia. You can also list the strengths and weaknesses of your business as it currently stands and compare them side-by-side with those of competitors. A SWOT analysis is a classic exercise for identifying the Strengths, Weaknesses, Opportunities, and Threats that exist within the competitive landscape.

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That statistic shows the extent to which each benefit contributes to the differences in the prices of competing offerings while controlling for the impact of all other benefits. The benefit with the highest incremental r-square accounts for more of the variation in prices than the other benefits, so it’s the most important driver of price. If several benefits correlate with one another, that suggests they jointly influence price differences. In such cases, you can combine them into a single benefit by creating an index or a scale—a common practice in marketing research. Once you’ve gathered data on products’ benefits and prices, employ regression analysis to find out which benefit explains most of the variance in products’ prices. Once you’ve defined the market, you need to specify the scope of your analysis of prices.

Strategic analysts often use Porter’s Five Forces to understand whether new products or services are potentially profitable. Ideally, you’d want to measure the market share for each of your competitors. One substitute metric you could use is Share of Voice – the volume of mentions your competitors get on social media and the web compared to each other.

To use this framework, you may alhttps://1investing.in/y have a fully functional product, an MVP, or even just a product idea. I’ll be using certain tools to facilitate and automate certain bits of the process. Most of them are either freemium or have a free trial available, so all that you’ll need to invest into the analysis is your own time. The strategic advantage behind compiling a competitive analysis is that it helps you get a better picture of the competition so you can try to emulate their success but also recognize and avoid their failure.

1. Company overview

Whether you’re running a business or playing in a football game, understanding your competition is crucial for success. While you may not be scoring touchdowns in the office, your goal is to score business deals with clients or win customers with your products. The method of preparation for athletes and business owners is similar—once you understand your strengths and weaknesses versus your competitors’, you can level up.

Competitive positioning is essential to succeed, reach great sales volumes, and brand awareness. The well-known clothing brand always stands for environmental protection, supports initiatives and movements that try to save it, and prevents people from harming nature. Their marketing campaigns are stunning, they help boost brand awareness and increase sales. To keep track of your progress, you need to set deadlines for every task, marketing campaign, and goal. This way, you’ll know whether you succeeded in reaching goals within the time you expected.

When you’re conducting research for your competitive analysis, it’s going to be messy. You’ll have a lot of data and it’ll be hard for an outsider to understand. The feature comparison is arguably the most important part of the competitive analysis. Breaking down your product and your competitors’ products feature-by-feature will allow you to see what really sets everyone apart. Talk with prospects and customers, or conduct market research if you have the time, budget and opportunity.

There are different types of competitive matrices, but most of them are simple charts wherein you list the main features and benefits of your product or service. On the top row, you list your company and the names of your competitors and fill in the chart with the appropriate information for each company. However, they can also be complex graphs with x and y axes representing unique positioning within a market segment. Competitive matrices can be used for any form of competitive analysis, including SWOT analysis, features and benefits analysis, content marketing strategies, review tracking, and much more.

The newcomers’ highly customized products were trumping Harleys because riding a motorcycle had changed from being an act of rebellion to one of self-expression. Many companies, especially in industrial markets, seek to retain customers by offering intangible benefits. To that end, they spend a great deal of money to offer supplementary services without knowing if customers want them enough to pay for them.

In the spreadsheet, I like to divide the factors into collapsable sections . I also tend to add comments under each aspect with details or links that provide more info. Depending on the stage you’re at with your business, you can also add in a column for your own product to quickly see how it compares to competitors.

Competitive Position

Industry growth is slow, precipitating fights for market share that involve expansion-minded members. Finally, we come back to the jockeying for position of the key competitors in the market space. Any strategy you develop for your own products would have to be aware of what substitutes could exist for your end customers. Access to distribution channels – Distribution channels have changed dramatically since Porter wrote his original paper, but the fundamentals are the same.

The term “Competitive positioning” sounds like an intimidating business term to describe a complex topic. Your competitors will bring a new role onboard when they sense that the market changes and need someone to handle things smoothly. You also look at their history, the competitors they believe in having, and their success and failure stories.

• To get an idea of your competitors’ ad strategy, SimilarWeb is a great starting point.
• Many large and small enterprises have ventured into consumer-packaged goods because it has a high demand, and can be sold out quickly.
• With the same critical eye you used to gauge your competition’s content marketing strategy, take a fine-toothed comb to analyze their social media strategy.

Motorola would do well, in that case, to push those of the Razr2’s advanced functions that consumers value most, rather than add more secondary features. For instance, having a haptic touch screen on the Razr2 is a novel benefit. Perhaps—but it comes second to the advanced functionality they are more willing to pay for.

In response, over the next two years, Primo moved both up and down the expected-price line, giving customers a range of options with even better performance for the price. Companies can use past trends to map projected future market moves. That’s what a company we’ll call Primo did to anticipate rivals in the price-sensitive market for advanced materials for electronic components. The analysis highlighted many issues affecting competition in emerging economies and compared them to those that are more prevalent in more developed markets. Profitable markets attract new entrants, which erodes profitability.