Competitor analysis

Competitor analysis in marketing is an assessment of the strengths and weaknesses of current and potential competitors. One common and useful technique is constructing a competitor array. The steps include:

• define your industry - scope and nature of the industry
• determine who your competitors are
• determine who your customers are and what benefits they expect
• determine what the key success factors are in your industry
• rank the key success factors by giving each one a weighting - The sum of all the weightings must add up to one.
• rate each competitor on each of the key success factors - this can best be displayed on a two dimensional matrix - competitors along the top and key success factors down the side.
• multiply each cell in the matrix by the factor weighting.
• sum columns for a weighted assessment of the overall strength of each competitor relative to each other.

Two additional columns can be added. In one column you can rate your own company on each of the key success factors (try to be objective and honest). In another column you can list benchmarks. They are the ideal standards of comparisons on each of the factors. They reflect the workings of a company using all the industry's best practices.

We can learn a lot about the competitive environment by scanning our competitors ads. Changes in a competitor's advertising message can reveal new product offerings, new production processes, a new branding strategy, a new positioning strategy, a new segmentation strategy, line extensions and contractions, problems with previous positions, insights from recent marketing or product research, a new strategic direction, a new source of sustainable competitive advantage, or value migrations within the industry. It might also indicate a new pricing strategy such as penetration, price discrimination, price skimming, product bundling, joint product pricing, discounts, or loss leaders. It may also indicate a new promotion strategy such as push, pull, balanced, short term sales generation, long term image creation, informational, comparative, affective, reminder, new creative objectives, new unique selling proposition, new creative concepts, appeals, tone, and themes, or a new advertising agency. It might also indicate a new distribution strategy, new distribution partners, more extensive distribution, more intensive distribution, a change in geographical focus, or exclusive distribution. Little of this intelligence is definitive : additional information is needed before conclusions should be drawn.

A competitor's media strategy reveals budget allocation, segmentation and targeting strategy, and selectivity and focus[?]. From a tactical perspective, it can also be used to help a manager implement his/her own media plan. By knowing the competitor's media buy, media selection, frequency, reach, continuity, schedules, and flights, the manager can arrange his/her own media plan so that they do not coincide.

Other sources of corporate intelligence include trade shows, patent filings, mutual customers, annual reports, and trade associations.

Some firms hire competitor intellegence professionals to obtain this information.

see also: marketing, marketing management, marketing plan, industry or market research

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