Previous articles have looked at the tools and frameworks used to analyse the competitive landscape within which organisations compete. This article is going to review competitor/company profiling and how this relates to analysing the competitive position of a company.
Some of the tools and frameworks which can be used have been discussed elsewhere (Strategic Group Analysis and Critical Success Factors), and so will not be discussed here further. This post reviews company/competitor profiling, with a future post looking at the market attractiveness/business strength matrix and financial ratio analysis.
Competitor profiling gives us an assessment of a company’s performance compared to its competitors. There are a number of key components that will be useful and insightful in developing such a profile.
There are four steps to creating competitor profiles:
- Acquire a basic understanding off the company or industry
- Read general information about the company on its web site;
- Read introduction to analysts’ company reports;
- Read the CEO’s statement in the Report and Accounts;
- Establish where it fits in the value chain.
- Determine data needed
- Ensure all necessary background information is included;
- Include information related to the strategic issue being examined by the project.
- Gather and analyse data
- There are a wide variety of sources available;
- Analyse data where appropriate:
- use financial analysis techniques;
- Product/channel analysis
- Understand key tradeoffs that competitors in an industry have:
- eg niche vs scale
- Evaluate company
- Plot competitor field maps;
- Understand relative competitive positions and rationale
- Product/service offerings
- Channel usage
- Depending on what we need to know, use SWOT model to help evaluate competitor;
- Ensure analysis relates to, or answers the questions, we are trying to answer.
Two easy ways to illustrate company profiles are as a Company Profile Template, which is a series of headed boxes detailing the summarised information which is required, and the preparation of a Competitive Field Map, which is a two axis, sized and coloured bubble diagram graphically detailing the competitor information.
Both of these are appropriate, and, I believe should be used together as a useful way to present the data. Obviously, each would need to be tailored to the data , industry and situation requiring the analysis.
Good analysis can result in a number of useful insights:
- Directs further analysis by highlighting key strengths and capabilities;
- Enables a comparison between players through use of a common template;
- Helps us to understand strategic positions of competitors (product/service offering, channel usage);
- Helps identify strengths and weaknesses of different players in an industry;
- Identify gaps in portfolios and capabilities of the client company;
- Identify relative strength of the client company; and
- Understand key competitor moves.
However, as with all models, there are identified strengths and weaknesses of the model:
- Gives a clear overview of basic facts about a company;
- Provides direction to further analysis; and
- Gives an overview of competitors’ attributes along multiple axes.
- May provide few insights in itself:
- Requires benchmarking over time or against competitors
- Often complex and difficult to use effectively in presentations:
- Requires effort to extract key messages
- Often focuses on the present rather than the future; and
- Can be considered a static tool.
- May provide few insights in itself:
If company or competitor analysis is something you want to do, here are some useful tips.
Alternatively, Innovation for Growth offers a desk top research service, including competitive position and company position analysis. Please contact us if you would like more details, or visit our website.