It is possible to navigate crowded market conditions by either spotting a niche that established businesses have missed or by spotting errors or flaws in their business models. Although there are frequently opportunities to take advantage of, whether in a crowded market or not, research must be done before launching a startup to ensure that any opportunity is not only viable but also scalable.
Competitor analysis is a crucial step that all startups must take. In addition to identifying competitors, take into account opportunities and risks as well. Competitor analysis entails assessing a competitor’s offer (as well as their advantages and disadvantages) and doing so while keeping in mind how they conduct business. Meaningful comparisons can be made by studying competitors in this manner. A new startup has the advantage of being able to pick and choose the qualities and actions of more established (and experienced) peers thanks to competitor analysis, which also aids in identifying the macro trends and activities that influence businesses in any specific industry or sector.
Each step is elaborated on and broken down further below. As a guide, this framework can (and should) be customized to best serve the objectives of the startup using it. Each step can be modified, altered, or eliminated as necessary, so long as the process integrity isn’t compromised to the point where finishing it is pointless. As markets evolve and businesses grow, the framework we have outlined can be reviewed. Competitor analysis is a dynamic process that should be viewed as an ongoing concern.
Competitor Analysis Framework: The 5-Step Guide You MUST Follow
Benefits of using a competitive analysis framework
The use of a competitive analysis framework has a variety of potential advantages. A marketing or financial professional can benefit from conducting a competitive analysis and compiling the research into a framework in the following ways:
What is a competitive analysis framework?
To compare their business plan or marketing strategy with their rivals, marketing professionals can use a competitive analysis framework as a model or tool. This model can provide a visual framework for a competitive marketing analysis. An in-depth description of a company’s competitors’ sales, business plans, and marketing initiatives can be found in a competitive analysis. An organized framework compiles the information from the analysis.
Types of competitive analysis frameworks
There are several frameworks to pick from when conducting a competitive analysis. Some businesses may decide to combine a few of these frameworks to monitor different market trends. Here are five prevalent frameworks that can assist you in organizing and presenting data from a competitor analysis:
SWOT analysis
A SWOT analysis examines a company’s strengths and potential areas for expansion. The SWOT chart organizes information into the following four categories.
As part of a larger competitor analysis, many marketing teams also perform a SWOT analysis. How many competitors there are in the threat category can be revealed by a SWOT analysis. A marketing team can also perform a SWOT analysis of the market and examine the advantages and disadvantages of various rivals to spot trends and gaps.
Strategic group analysis
A map, graph, or chart used in a strategic group analysis displays the competitors. This framework involves creating strategic groups. Companies can categorize their rivals based on traits, market shares, services, or products. A graphic display is then created by the marketing team or business owner using these groups as a plot. An owner of a coffee shop might, for instance, make a graph depicting the average price of coffee and the volume of overall sales. They can then add other coffee shops to this graph. This can help show market trends and gaps.
Growth share matrix
Products are ranked according to their market shares, or the portion of the market that the company owns, in a growth share matrix. Market trends can also be reflected in this matrix, which was initially created for investors making portfolio decisions. This graph can be used by a business or marketing team to determine which marketing tactics result in larger market shares. They can also keep an eye on a few rivals over time to determine which ones are gaining market share. This can help them refine and adjust their marketing strategies.
Porters five forces
Using this framework, the competition will be examined while concentrating on five categories. This framework can be used by a marketing team or company to examine a sector or a particular market. It includes the following factors of competition:
A company can use this framework to analyze an entire market or industry, which will enable them to develop strategic goals and targeted objectives. A marketing team can come up with ways to differentiate their product from competitors, for instance, if there are many alternatives in the market.
Perceptual mapping
Position mapping, another name for perceptual mapping, displays a business and its rivals on a plot graph. A marketing team can select two factors they want to concentrate on when using this framework. Tracking quantity and quality is common here, though businesses may decide to develop particular metrics for their services instead. A company can plot both its own position and the positions of its competitors after selecting two factors. This can help identify market trends and gaps.
FAQ
What is a competitor analysis framework?
Marketing professionals can use a framework or model called a “competitive analysis framework” to compare their business plan or marketing strategy to those of their rivals. This model can provide a visual framework for a competitive marketing analysis.
What are the 5 steps parts of a competitive analysis?
- Write down your competitors.
- Write what you know about them already.
- Discover who their target customers are.
- Discover their pricing methods.
- Investigate their marketing strategy.
- Figure out their competitive advantage.
What model is used for competitor analysis?
- Identify your top ten competitors. This seems obvious, but it’s an essential first step.
- Analyze and compare competitor content. …
- Analyze their SEO. …
- Look at their social media engagement. …
- Identify areas for improvement.
