Why We Love Competitive Landscape Analysis (and You Should, too!)
Competitive landscape analysis, SWOT, benchmarking are all related terms that are used to evaluate your influence in the market. Analysing the competitive landscape is a task that involves looking at multiple marketing fronts. Today, marketing communications works across many channels including print, video, social and others.
So why bother doing all this analysis across multiple fronts? The primary goal of analyzing one’s competitive landscape is to uncover the opportunities where your company can outperform your competitors and differentiate the brand. By understanding where competitors are getting a larger share of the market in each channel you will better understand why they are succeeding. This will allow you to determine if your brand awareness is increasing or decreasing across your audience and make necessary adjustments.
Where to start
In order for your analysis to help you make actionable decisions, it’s a good idea to invest your benchmarking energies on competitors, industry leaders and market influencers. From here, you will want to focus on activities that create competitive advantage. These can be classified broadly into upstream competitive advantage and downstream competitive advantage.
Upstream competitive advantage
Upstream competitive advantage focuses on a firm’s unique assets and capabilities. One way to gain competitive advantage upstream is to perform research on market trends, identify where the market is going, and create new products to satisfy the future needs. Two trends we see today that will seem to have massive impact on new product development in the years to come are automated driverless cars and IoT ( the Internet of things). Explore the trends in your industry for the best impact.
Downstream competitive advantage
Downstream competitive advantage is much more about how your company is perceived in the minds of consumers. It refers to branding and brand positioning. A brand can be worth much more than its physical assets. A company that faces a decrease in brand positioning could end up losing market share fast. Just think of Abercrombie & Fitch. In 2005 A&F rebranded with its highly sexualized no shirt male model campaign targeting millennials. The success was short lived. The 2008 financial crisis left their main audience with reduced buying power and a decreased interest in the identity the brand was promoting. The underlying message? A strong brand identity will result in customers refusing to switch brands, while a brand that does not adapt its messaging to the changing times will lose market to its competitors.
Tools to inform competitive landscape analysis
Can you predict where your competitors are going, do you have a solid understanding of how you are perceived relative to your competitors? If you want to deepen your knowledge there are several tools out there that can assist in your competitive landscape analysis.
Price-benefit positioning map
The price-benefit positioning map[if !supportFootnotes][endif] is a tool that allows you to identify the customer need that both you and your competitors satisfy and provides a visual way to understand how you are perceived. You can create it by drawing a vertical axis and horizontal axis in the middle of a piece of paper. Chose price as the variable for one axis and the primary benefit you want to evaluate for the other axis. Then plot where the competitors are perceived according to the price and benefit.The result will demonstrate how much customers are willing to pay to enjoy different levels of the primary benefit. Doing so will help you to locate in the map spaces that are less crowded, less competitive, and can be seen as opportunities.
Multiple Regression Analysis
The market is complicated and it usually takes more than two factors to even begin to predict why consumers will buy a certain product. It is not very reliable to just ask people how much they are willing to pay for each feature because consumers often can’t explain how they make their choices and they often don’t do what they say. That is where multiple regression analysis[if !supportFootnotes][endif] comes into play. With multiple regression analysis you try to determine the relationship between one factor, called the dependent variable, to several other factors, known as independent variables. If you’re wondering whether adding a feature or taking off a feature will affect the demand for your product, multiple regression analysis can help you predict the outcomes and answers the question which features have the most impact. Statistical software like SPSS and Marketing. Engineering for Excel are very useful in simplifying the seemingly daunting task of multiple regression analysis. If you do ask your analysts to perform multiple regression analysis, keep in mind to look at factors that you can take action upon, such as promotions rather than weather conditions.
We invite you to explore additional tools for competitive landscape analysis on your own. These include product ratings, reading public relations of competitors, blogs/subreddit/forums, and signing up for a competitor's demo.
With today’s technology competitive landscape analysis is faster and more cost effective. When you understand the playing field and what it is your target customers value, you can make better decisions across all your marketing fronts.
[if !supportFootnotes][endif]Setting value, not price/McKinsey & Company
[if !supportFootnotes][endif] A Refresher on Regression Analysis/ Harvard Business Review