It is essential to understand your competition. To remain competitive in today’s business world, you need to understand:
- What are their strengths and weaknesses?
- What are their mission and vision?
- What niche markets do they serve?
By understanding your competition, you can create a strategy that will help you stay ahead of the game. This post will discuss the basics of competitive landscape analysis and how you can use it to improve your business competitiveness.
What Is The Competitive Landscape?
A competitive landscape is a business analysis method that identifies direct or indirect competitors. It helps businesses comprehend their mission, vision, core values, niche market, strengths, and weaknesses.
The goal is to be preventive to competitive business moves instead of responsive. It is a differentiator mindset rather than a similarity that can see companies as another set of data points. The goal is to appreciate what they do and how this affects the industry and customers.
Why Do Competitive Landscape Analysis?
Again, the reason to do it is the proactive, differentiating mindset. It recognizes that there are other companies in the world. By understanding what competitors do, you can make informed decisions about your own company. The idea is to get a sense of what they do, how they think, and their values.
This analysis should also help you understand what niche markets your competitor is serving and how this affects you.
For example, if you are a company that sells software to businesses and your competitor starts selling software to schools, you may need to rethink your marketing strategy.
It does not just understand what they do but also how they think and their values. And also niche markets they are serving, which would impact you.
The analysis should help you understand the competitive moves your competitor is making. Then, help establish a new mindset facilitating the creation of strategic competitiveness.
How Should I Evaluate the Competitive Landscape?
There are many things to should look for in competitive landscape analysis.
The first is understanding of your competitor’s mission and vision. What do they hope to achieve? By understanding their mission and vision, you can understand how they operate and their values.
You need to look at your competitor’s core values. What are they passionate about? What drives them? By understanding their core values, you can get a sense of their thoughts and priorities.
Another thing to look at is your competitor’s niche market. What industry do they serve? How does this affect you? By understanding your competitor’s niche market, you can better understand their target audience and how to reach them.
Finally, it would be best to look at your competitor’s strengths and weaknesses. What are they good at? What is the scope of improvement? By understanding your competitor’s strengths and weaknesses, you can develop a strategy to stay ahead of the game.
What Are Some Steps To Conducting a Competitive Landscape Analysis?
There are several steps to conducting a competitive landscape analysis.
The first is to gather information about your competitor.
This information can include their mission, vision, core values, niche market, strengths, and weaknesses.
You can develop a strategy to stay ahead of them when you know this. How do you gather information?
One way is to look at their website and read their about us page, their mission statement, and their values. You can further look at social media sites like Twitter and Facebook to see what they discuss or debate.
Another way to gather information is to talk to people who know your competitor. This information can give you a more well-rounded view of your competitor.
Once you have gathered information, it’s time to analyze it.
What does this mean for your business? How would you use it to improve your competitiveness? By understanding how your competitor thinks and operates, you can develop a strategy to think of them? What priorities?
Another way to use the information is to look at how you can reach your competitor’s target audience. How do they get their customers? What type of marketing strategy do they use?
By understanding how your competitor communicates with their customers, you can find ways to reach them that you might not have considered before.
What does it mean? How does it affect you? By understanding the information, you can begin to strategize and develop a plan of action.
Finally, you need to put this plan into action.
The aim here is to implement the strategies you have come up with and see how they work. What works? What doesn’t? By continuously evaluating your competitive landscape, you can ensure that your business stays ahead of the curve. When conducting competitor analysis, it may be beneficial to use a competitive intelligence tool like Kompyte. It automatically tracks your competitors’ updates across hundreds of sources and millions of data points. This includes their website, social media, news articles, and even job postings.
Create a Worksheet
- Gather information about your top competitors.
- What is their mission? Vision? Core values? Niche market? Strengths? Weaknesses?
- How do they reach their customers? What type of marketing strategy do they use?
- What does this information mean for your business?
- How can you reach your competitor’s target audience?
Develop a Plan of Action
- Put the strategies you have come up with into action.
- Evaluate how they work.
- Make changes as needed.
Keep Track of Your Progress
It’s essential to continuously evaluate your competitive landscape to ensure your business stays ahead of the curve.
There are four steps to it:
1. Get organized:
You need to create a matrix that works for you and helps you track the information. The matrix could involve different variables such as company, product, target market, marketing strategy, and so on.
2. Identify your competition: The primary and secondary competitors.
The primary competitors are those that directly compete with you in the same market. The secondary competitors do not have the same product as you. Still, they may offer a similar service or target the same market.
For example, company A is in the business of selling shoes, and companies B and C are their direct competitors. Company D is a company that sells clothes, and they also target the same market as Company A. Thus, Company D would be a secondary competitor.
You can also use this analysis to identify indirect competitors. Indirect competitors are not in the same industry as you but may offer a similar product or service.
3. Evaluate their pricing and offers: This will help you understand your competitor’s strengths and weaknesses.
You can also look at the media they use advertising, public relations, social media, and so on. Keep in mind that it is essential to stay up-to-date with your competitor’s latest news. It could be anything from a new product line to a change in their marketing strategy.
After gathering all of these insights, it’s time to analyze it. What does this information mean for your business? How do you use it to boost your competitiveness? By understanding how your competitor thinks and operates, you can develop a unique strategy for your company. You can also learn how to reach your competitor’s target audience.
This analysis is an ongoing process. Hence, you must remember that the competitive landscape can change. Therefore, make sure you constantly evaluate your progress and make the necessary changes.
Creating strategic competitiveness begins with understanding your competition.
4. Use frameworks: SWOT and PEST:
SWOT: This is a framework that helps you identify the Strengths, Weaknesses, Opportunities, and Threats of your business.
PEST: This is a framework that helps you identify the political, economic, social, and technological environment of your business.
Both of these frameworks can help you to understand your competitive landscape better.
By using frameworks, you can organize the information in a way that is easy to understand and makes sense for your business. It is crucial to consider that these are just tools, and you should adapt them to fit your needs.
When you have captured all of the information about your competition, it’s time to analyze it. Now here, the framework can be helpful. There are various distinct frameworks that you can use, such as SWOT and PEST.
Each framework will help you to look at the information differently. SWOT will help you to identify your company’s strengths and weaknesses.
In contrast, PEST will help you understand the Political, Economic, Social, and Technological environment.
Using frameworks can better analyze the information and understand how it impacts your company.
What Are Some of the Characteristics of a Competitive Landscape?
There are a few key characteristics that you can look for when analyzing the competitive landscape:
- The first is the level of competition. How many companies are competing in this market? And how fierce is the competition?
- You should also take into account the size of the companies. Are they significant, medium, or small businesses?
- What is the nature of the competition? Are they direct or indirect competitors?
- What is the target market for these companies?
- How do these companies compete? What are their strengths and weaknesses?
- What is the current state of affairs in the corporate world? Is it stable or volatile?
By understanding these characteristics, you can better understand the competitive landscape.
Competitive Landscape Example
For example, let’s say you are a small business that sells clothes online. Your direct competitors would be other businesses that sell clothes online, such as Amazon and Etsy.
Your indirect competitors would be businesses that sell other products, such as electronics or home goods.
It is essential to understand the competition to reach your target market. You need to know who your direct competitors are and what strategies they are using. You also need to understand the indirect competition and how it may impact your business.
The competitive landscape can be a helpful tool for understanding your business. By employing frameworks such as SWOT and PEST, you can better analyze the information and make decisions that are best for your company. Remember to evaluate the competitive landscape, as it can change constantly.
Let us take a case study of a competitive landscape analysis of Starbucks and how it fares against the competition.
Starbucks is the world’s largest coffeehouse chain, far outpacing competitors like Dunkin’ Donuts and McCafé. Starbucks’ rapid growth can partly attribute to its unique techniques for attracting and retaining customers.
Starbucks coffee and drinks have long been high-end products, and consumers are willing to pay extra for excellent quality.
Starbucks only utilizes Arabica coffee beans of the finest grade. Additionally, the equipment used to make coffee is of the highest quality. Such as the Mastrena espresso machines made in Switzerland and the Clover single brew utilized in Starbucks locations.
Placement of Starbucks locations in high-traffic areas such as city centers, malls, and busy roadways is one of their key strategies.
Starbucks has deployed new internet technology to communicate directly with customers.
The Starbucks hybrid loyalty program, for instance, has over 11 million members who can join digitally or by downloading the Starbucks mobile app.
Rewards members can use their accounts to place orders ahead of time, reducing wait times in the store or drive-thru.
The Starbucks app and Rewards program is also incredibly effective at engaging with customers and promoting new deals and goods.
Starbucks’ worldwide supply chain is vertically integrated, which means it has complete control over transporting coffee beans from farm to shop.
In other words, no intermediaries or third parties are involved from the farms where the coffee gets harvested. Which then transits on ships to roasting facilities in the United States and Europe, finally to distribution in stores globally.
Starbucks’ competitive analysis comprises several aspects. The company can establish a market for premium offerings and the entire Starbucks experience by employing a product strategy of differentiation.
To sum up, the competitive landscape is a valuable tool for understanding your business and the competition. You can better assess the information and make the right decisions for your organization if you use frameworks like SWOT and PEST.