It’s not enough to respond to competitors’ moves. You have to anticipate them. To gain this foresight in your own market, companies must conduct an ongoing competitive landscape analysis.
A competitive landscape analysis is the ongoing process of identifying, researching, and evaluating competitors, in order to glean insight to inform your business strategy. It’s a way to evaluate competitor strengths and weaknesses today—and also observe how they’ve evolved. Your competitors’ evolution in the marketplace is just as important, if not more so, than taking a snapshot of their current standing. It’s what allows you to identify changes they’ve made along the way or moments where they pivoted, which monumentally influenced their upward trajectory.
Your competitive landscape analysis should include:
Businesses need to adopt a forward-thinking outlook. A competitive landscape analysis helps you determine the next steps for your brand and business. It’s no longer enough to rely on gut instincts. Data must be leveraged to inform decisions, surface opportunities, and identify and mitigate risks that might not even be on your company’s radar yet.
Let’s use Blockbuster, which was the most popular US video store in 2000, and Netflix as an example.
In 2000, Netflix co-founders Reed Hastings and Marc Randolph met with former Blockbuster CEO John Antioco, in hopes of selling their then DVD-by-mail rental company for $50 million. At the time, Netflix was growing in subscriber base, but still losing more than it was making, reported Newsweek. The offer was declined by Blockbuster.
How did this happen?
Netflix listened to customers and anticipated their needs before they became common knowledge—the desire to watch movies from the comfort and convenience of their own homes. This underscores the urgency of conducting and analyzing your competitive landscape on a regular basis.
In a study of 250 C-suite executives, 88% said feedback data is very or extremely valuable in helping them make business decisions at their organization. Executives who work for companies that value feedback most were also 20x more likely to feel extremely confident in their ability to change direction based on new information, compared to companies that found feedback somewhat or not valuable.
Here are 4 reasons why competitive landscape analysis is so important:
Competitive landscapes help you look beyond today and see what opportunities lie ahead. Just like Netflix, which started with DVD-by-mail rental, companies must regularly listen to customers in order to anticipate needs before they’re widely known. Through competitive landscape analysis, you’ll learn more about your competitors and your customers, too.
Your UVP is what your business does better than anyone else. It could be related to your company, products or services, or even operations. As an example, you can find many of the same products on Amazon that are also being sold at Walmart or large department stores. However, Amazon sets itself apart from competitors with its fast delivery speed and convenient returns. A competitive landscape analysis can help you identify your company’s UVP and how to best market it to customers.
We work in and on companies and brands daily, which makes it challenging to maintain an objective viewpoint. Competitive landscapes allow you to take a step back and see how customers view your brand as a stand-alone entity and in comparison to competitors. You can also discover why they are more (or less) likely to buy your product or service. Once you know where you land on their “list,” you can start to define strategic ways to move up in priority.
Before you can improve your standing against competitors, you have to know where you are now. This is called a “competitive benchmark” and it’s essentially your starting point. How do you fare against top competitors right now in key areas that are hard to quantify, such as customer satisfaction and loyalty, employee engagement, and brand awareness? Your competitive benchmark provides a snapshot of where you started so you can set goals and track progress toward them.
Learn more about SurveyMonkey Benchmarks, which are built right into the platform and can be applied to all your market research projects.
Your competitive landscape is always changing and evolving. Technology and customer behavior changes. As such, your competitive landscape analysis should be a living report that gets dynamically updated and analyzed at a scheduled cadence (annually, semiannually, or quarterly). So, how do you analyze a competitive landscape?
Choose up to 10 competitors and sort them into 4 categories: direct, indirect, perceived, and aspirational.
Direct competitors have a similar business premise and sell a similar product or service to the same audience. Your customers are directly choosing amongst these brands and yours when they make their purchasing decision. These are the brand names that your sales team likely hears time and again in the sales process. For example, consider sportswear brands Nike and Adidas.
Indirect competitors offer a higher or lower-end version of your product or service to a different audience. The price point is often a key differentiator between your brand and theirs. For example, Nike and Adidas are direct competitors, whereas UK sportswear Ashmei is an indirect competitor to both brands.
Perceived competitors offer products or services that are fundamentally different from yours and solve a different problem. Your company doesn’t view them as a competitor, but the public does. These brand names might not come up as often as direct or indirect competitors in the sales process, but your team is still having to explain why your product or solution isn’t the same as theirs on occasion.
Aspirational competitors are brands in a related field that you admire. Maybe you like their products or services, branding, or marketing. They don’t offer the same products or services as yours today, but they could in the future.
Once you have a solid list of competitors, start to consume their content. Begin with their website and then work your way to offsite channels (advertising, social media, and other sites that reference or link back to their site).
Consider doing an audit of the following types of onsite content:
As you review, ask yourself these questions:
How does this competitor position itself in the market (brand positioning)?
How is this competitor communicating that position to the target audience (content messaging)?
Reflect on those very same questions for your own brand and compare and contrast against competitors.
Your competitors’ social media channels are like an open playbook. By assessing them, you can get a strong sense of the brand’s persona, current marketing strategies, and how they interact with their audience.
These channels not only show you the plays they make but the outcome of those plays—in real-time. You can learn from both their hits and misses on social media and apply those same strategies to your own brand.
Certain aspects of this monitoring process can be automated by using tools to track your competitors’ social media performance.
Some social media tools you might consider leveraging include:
In addition to the above tools, consider doing some market research to determine which social media channels are important to your target market. Surveys can also help you understand why they use those channels and provide ideas to better serve them.
Momentive, the maker of SurveyMonkey, offers AI-powered solutions to support any type of market research—from Consumer Segmentation to Brand Name Testing.
Imagine you’re a prospective customer. Go through the same steps a customer might when deciding between your brand and theirs. This can help you start to see your competitors’ marketing strategies.
For example, you might begin with a Google search. What are some keywords that you would hope your own company might show up for in search results? If you work for Nike, the keyword might be “running shoes.”
Ask yourself the following questions:
You might also subscribe to their email list to see how their content is structured and sequenced.
Additionally, conduct an audit of where your direct competitors advertise and any noteworthy strategies. Use this insight to make a list of the top vehicles and strategies leveraged by your competitors and think through how they can be actionably applied to your own business.
Check your competitors’ website for any pricing details they share upfront. How does their pricing compare to yours? Overcharging could cause you to lose out on customers with restricted budgets. Conversely, if your products or services are priced aggressively low, customers may question the quality. Ideally, you want your products and services to be priced competitively with everyone else.
However, if there is a notable difference, create marketing messaging for it. Your marketing and sales teams can use this on the front end to address objections before they’re even shared.
To develop your company’s own position, you have to first know where your competitors stand. How does each of your competitors position themselves in the marketplace?
Let’s say there are three different grocery stores in close vicinity to one another. One is known for its prepared, ready-made meals that make planning easy for busy people. Another is known for its pleasant shopping experience, where they cook demos of recipes in-store, allow you to sample the food, and offer free cookies to children. The last grocery store is known for its wholesome products, made with organic, natural ingredients. Those are three very different positions, each of which could influence the customer’s buying decision.
Determine your competitors’ positions and where your brand could disrupt the market.
Different frameworks can help guide your research and hone in on the specific information you need to make a decision. In particular, competitive landscape analysis frameworks can be used for a variety of purposes, including decisions about new or existing products or services, positioning, and marketing strategies. There are a variety of frameworks to choose from, based on your intent.
Below, we’ve outlined 6 popular competitive landscape frameworks and provided competitive landscape examples.
A SWOT Analysis (Strengths, Weaknesses, Opportunities, and Threats) helps identify a potential competitive advantage. For example, maybe you’ve partnered with a fulfillment company that processes your orders and returns. This allows you to deliver products faster than competitors. After surfacing this from the SWOT analysis, you might create and test messaging around this strength and share the resulting content with your marketing and sales teams.
A PEST Analysis helps you assess how external factors (Political, Economic, Social, and Technological) might impact your business operations, in order to be more competitive in the market. As an example, a PEST analysis can be used to think through how external factors might influence a new business venture or product launch.
Porter’s Five Forces examines how the threat of substitute products or services, bargaining power of buyers, the threat of new entrants, and bargaining power of suppliers all feed into rivalry amongst existing competitors. It helps companies assess the industries they might want to compete in and determine their own unique positioning. This framework could also be leveraged when you want to expand your current offerings and enter a new market.
A Strategic Group Analysis (SGA) matches competitors together who have similar strategies that differ from the rest of the group in some way. This could reveal gaps in the industry that your company might fill. For example, maybe you map out restaurants based on the breadth of menu and perceived quality. As you group competitors and plot them onto the model, you might notice there’s only one competitor that offers both breadth of menu and quality. This presents an opportunity for you to stand out in the competitive landscape.
A Growth Share Matrix is a portfolio management framework that allows companies to sort their product portfolio into four different classifications, based on profitability. Each classification is based on a specific combination of relative market share and growth.
These are the 4 quadrants:
The goal is to focus on the products with the greatest likelihood of market success.
Perceptual Mapping is a visual depiction of where a brand, product, or service falls in comparison to its competitors, based on two key attributes. For example, let’s say you work for a pharmaceutical company. You might send out a survey to determine how the public views you and your competitors in terms of “efficacy” and “price.” After plotting out the results, you find that the public views your medication as more expensive, but also as more effective than the competition. In the eyes of customers, this may warrant the price difference if you position it effectively. Gather customer input to ensure objectivity during the mapping process.
Each of these competitive frameworks can help you make more informed business decisions about your products or services, identify opportunities for greater profitability, and gain a competitive advantage in the marketplace.
You have to anticipate the needs of your customers, employees, and market to get ahead. This requires ongoing listening to understand current needs and detect habit changes or preferences before your competitors are aware of them. Ultimately, it means learning how to analyze a competitive landscape.
Fortunately, brand and industry tracking can now be a timely, continuous initiative that isn’t tied to a one-time presentation with a short-shelf life. A global leader in survey software, SurveyMonkey launched trackers that monitor industry and brand performance to uncover business insights in less time and cost than traditional agencies.
Industry tracking helps you surface key market trends, make strategy and investment decisions, and measure shifts in consumer and buyer sentiment and preference, such as e-commerce vs. in-person shopping. It also puts your competitive landscape at your fingertips, accessible any time.
For those who need help reaching their target market, SurveyMonkey Audience can put together a survey panel that gets results in minutes. By sending a survey to members of your target market, you can ensure your initiatives are as successful as possible.
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