Competitor Analysis

In my capacity as a business coach and consultant, I am often surprised that small to medium business owners neglect to analyse their competition.  An in depth analysis of your industry competitors can assist you, in your business, to identify opportunities for improvement.  It is so important to know what companies you will be competing with, including those who are not currently in the market.  Can you imagine that Microsoft doesn't know what Apple is doing in terms of its product development and market share, or vice versa?
 
A comprehensive analysis of your competitors will allow you to monitor how your business compares in terms of:
  • Staying power (financial resources)

  • Key personnel

  • Product availability

  • Service standards including after sales service, warranty policy

  • Ability to satisfy customer needs and requirements

  • What is the market share of each competitor in your target market and what market share can you expect to achieve in both the short term and the long term

  • Do you provide a product or service which is complimentary to any of your competitors?  Is it feasible for you approach them for a strategic partnership opportunity rather than competing with them in the marketplace?

  • What do they offer to their customers for the price they are charging?  Can you offer something more or something different to entice consumers to choose your business instead of that of your competitor?

  • What sort of Return on Investment (ROI) are your competitors attaining from their marketing campaigns and are there certain forms of marketing that yield a greater Return on Investment than others?

  • What do their customers think of them as a service / product provider overall?  Can you capitalise on any gaps in product or service provision?

When you have correctly and comprehensively undertaken a competitor analysis, you will then be able to effectively determine strategies for capitalising on opportunities in regards to your industry competitors and minimise potential threats (see Competitor Analysis - Implications to Your Business).  Again, the following example of a competitor analysis is taken directly from a business plan I developed in 1997 for a start up business I was involved with at the time.  It has no reference to any business currently in operation.

Get your FREE Competitor Analysis template by clicking here.

Business Name 1

Business Name 2

Business Name 3

Market Share

Very small percentage of a large industry – based on industry statistics and business turnover, market share is less than 0.00001%

Very small percentage of a large industry – based on industry statistics and business turnover, market share is less than 0.00001%

Wholesaler of imported giftware to a large number of retail outlets – statistics on market share unavailable

Major Customers

R.G. Madden (a line of giftware stores in Australia) nationally and Brazen (a boutique giftware store in Melbourne)

Small number of retail outlets and general public through market stall sales

Upmarket giftware retail outlets. Supply a small amount of stock to Myer (large dept. store in Australia)

What do their customers think of them

Generally reliable and very good quality product

Constantly late in delivery, generally friendly and reasonable prices

Very reliable and usually deliver stock in a timely manner

Pricing Policy

Usual mark-up is 75% but currently offering 15% discount on all stock to ‘get it moving’

Usual mark-up is 100%. Retail stores and customers purchasing in bulk receive 10% discount

Mark-up varies based on product. Averages between 60% - 85%

Financial Strength

Currently over $5000 in debt due to business start up costs

Family business with low overheads

Speculation – large factory warehouse. Assume business is on stable footing

Product / Service Range

A variety of picture and mirror frames custom made to suit requirements and décor

A variety of kitchen and bathroom containers

Vases, frames, candles and a variety of other trinkets targeted at the upmarket homeware and giftware market

Product / Service Quality

Exceptional quality – if a product isn’t perfect, it isn’t offered for sale

Very good quality, could find no fault with products

Mass produced stock, initial inspection indicates good quality

Customer Loyalty

Repeat business from photographers, artists and other businesses that require custom frames

Due to large number of matching products, customers try to buy entire range to ensure continuity in their kitchens

Regular orders from retail outlets to whom they supply stock

Brand Recognition

Very distinctive products but very little brand recognition as this is a start up business just establishing themselves in the marketplace

Original design but not very distinctive. A number of products like them in the marketplace

Common range of products, can be found in any upmarket homeware and giftware store

Length of Time in Business

18 months

3 years

7 years

Alliances

Fencing contractor supplies leftover wood for frames

No alliances

Share premises with another wholesaler and they sometimes share leads

Premises / Location

Address, phone number and website details go in here

Address, phone number and website details go in here

Address, phone number and website details go in here

Research & Development

Constant experimentation

Only changes product if asked to do so by customer – no research undertaken to ascertain market trends

Company Director tours overseas twice a year to source new products – mainly Asian and America

Plant and Technology

Latest equipment in good condition. Well organised home-based workshop

Well organised home-based workshop

Small but very classy showroom

Manufacturer, Wholesale, Service, Retail

Manufacturer and Wholesaler

Manufacturer and Wholesaler

Wholesaler

Advertising

Business cards

Tags on products

Informal networking

Business cards

Weekend market stall

Business Cards

Advertisement in Yellow Pages

Industry periodicals

Customer Service

Reliable and friendly, said to be good on follow-up

Generally friendly, no after sales service. Often late on delivery

Overly friendly, very pressured sales environment

Positioning

Tag line goes in here

Tag line goes in here

Tag line goes in here

Number of Employees

No employees, only self works in business

Family business, husband and wife team

Shares receptionist with adjoining business, two sales people and two delivery drivers

Distribution Methods

Delivers in person if in Melbourne or uses registered post for interstate orders

Deliver stock to retailers themselves. All Melbourne based customers

Delivery drivers deliver stock to retailers. Occasionally retailers will pick up orders to save on delivery charges

Patents

Has licence on back of frame but no patents

No licences or patents

Not applicable

Sales Tactics

Door-to-door sales and direct sales tactics

Market stall, informal networking

Customers come to warehouse after exposure to advertising

Growth

Currently expanding interstate and investigating opportunities for export

Not looking to expand any further

Always looking to capture new retailers to sell products but not pro-active in sourcing

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