Competitor Analysis – SKCI Business Strategy Tool
Competitor Analysis is an integral part of understanding where your organisation sits in the market. Depending on the size of your industry, it may seem daunting trying to track the trends of all of your competitors. For that reason, the SKCI team has created an easy to use table to help focus your analysis on the actions of your key competitors.
When To Use
Competitor Analysis is an iterative process and should be done regularly so that you can follow the strategic trends of your competition. When you are planning strategy, it is particularly useful to evaluate your competition early on. Competitor Analysis can be seen as a building block as it gives you a firm understanding of where you sit in the market and how you relate to other organisations. It, also, highlights potential advantages that you may not have noticed previously. By seeing the effective actions of others within your industry you can ensure that your strategy matches, or better yet surpasses, theirs.
How To Use
Firstly, identify your competition! While every company is unique, it is incredibly likely that there is an organisation out there which poses some form of threat to yours. Identify the top three organisations which compete with you and find out or estimate their revenue. It is also helpful to note down organisations that do not directly compete with you but also pose a threat. This could be smaller/niche organisations, companies outside your market, organisation with a substitute product or new entrants who plan to disrupt the market with new technology.
Then, analyse the competitors’ products and services and how they are perceived by customers. You will want to look out for any key wins, product launches or other large-scale media coverage. It is also helpful to compare their products and services with your own, so that you have a deeper awareness of the benefits/pitfalls of your competitors. Similarly, you may want to look at their management structure to see how their organisation may be working differently.
Here are some questions you may want to consider:
- What market share do they currently have?
- What is their USP?
- Who is their target market? Is it the same as ours?
- How does their performance compare with the overall market?
Let’s look at the example of NewTechNow, an imaginary B2B software and hardware company that we have seen in previous example. For this analysis, let’s say that NewTechNow’s revenue for last year was £20 million.
NewTechNow is a midsized organisation within a growing industry. All of its competitors have strengths and weaknesses which can be used to the organisations advantage. For example, it is clear that the first two competitors have not established good reputations with their consumers so NewTechNow may choose to focus more energy on ensuring that it is has excellent customer service (whilst not losing sight of the fact that NewTechNow’s USP is its focus on innovative technology, i.e. product leadership).
How Does This Fit Into The 5KQ Strategy Framework?
SKCI’s unique 5 Key Question (5KQ) strategy framework gives our clients an effective way of managing strategy development. Competitor Analysis can be used at any point in the process but is most often applied to question one, ‘Where are we now?’ and question two, ‘Where do we want to go?’.
Our framework allows you to ask the right questions at the right time and provides a clear structure for the development of your strategy. This tool enables you to establish your position within the market and analyse the trends of your competition. Once you have established how they are gaining success you can start to question how their strategy could work with or against your own.
Additional Strategy resources, including blank worksheets in PowerPoint and Word format, are available from the SKCI Strategy Hub