Guidelines for Doing a Competitive Analysis

The competitive analysis section can follow a format that is shown below. This report would be made for each of the major competitors. While most of this report focuses on the overall analysis of the competitor, it should be recognized that the researcher is primarily interested in how this information may impact their company and, specifically, a product or product line. Thus, one should make sure, where possible, to focus  information on how it impacts the markets in which the company’s product competes.

  • General Company Information – includes name, location (headquarters, other locations of importance), website address
  • Summary of Business – includes sections that summarize the company, business units, and nature of business
  • Business Overview – includes sections on history, ownership structure, types of businesses, mission, strategy/objectives, key executives
  • Recent News/Developments – important company developments within last 6-12 months (e.g., reports from news sources, press releases, financial statements, social media, etc.)
  • Financial and Market Share Analysis – includes sections on corporate performance, trends, market share for product
  • Marketing – includes sections on products and services offered, target markets, positioning, customers/users, pricing model, promotional efforts, sales force, and distribution
  • Other Issues – includes sections on technology capability, partnership arrangements, legal concerns, intangible issues
  • Competitors – list key competitors facing this company
  • SWOT – summarize strengths, weaknesses, opportunities and threats

Competitors

For many marketers, the competitive external force is the one most relevant to immediate day-to-day decision making. While the other external forces we’ve discussed tend to be examined periodically (or in some cases rarely), monitoring competitor activity is often a daily undertaking.

Monitoring competitors can serve several goals:

Competitors as Threats

The most obvious reason to monitor the competition is to see how they are responding in the same markets in which the marketer operates. Many larger companies recognize the importance of keeping tabs on their competition and create specific positions or even departments that focus on gathering and analyzing competitor data. These competitive intelligence programs mainly employ high-tech methods to locate information about competitors, such as news reports, government filings (e.g., patents, stock reports), social media postings, and changes to competitors’ websites. Even small-sized marketers can track competitors’ actions. For instance,  several news and information services that will alert a marketer (usually via email) when a competitor is mentioned in the news.

Competitors as Partners

While many may consider competitors as representing the enemy, there are situations where competitors can present opportunities. This happens often to large companies that offer a broad product line serving many target markets. In some markets, a company may compete aggressively with another firm but in other markets both firms may be lagging and it may make more sense for both to work together. This can be seen in the computer industry where Apple, which at one time would not consider building computers with Intel processors since these were used by competitors that run the Microsoft operating system, has now adopted these processors for much of its computer line.

Competitors of Tomorrow

In many industries and, in particular, those in technology-focused industries, the most dangerous competitors are the ones that have yet to emerge. Because technology-dependent industries, such as high-tech, consumer electronic and pharmaceuticals, rely heavily on innovative new products, serious competitors can emerge quickly from what seems to be out of nowhere. For instance, news organizations have been quickly and significantly impacted by social media, especially by the continuing growth and influence of Twitter and YouTube. The ease by which information can be posted and made available for mass viewing essentially allows nearly anyone to become a broadcaster and, consequently, a threat to traditional news outlets.