Competitor research refers to the process by which an enterprise evaluates its competitive position and formulates an effective market strategy and competitive strategy by collecting, collating, analyzing and using relevant information about competitors to understand the basic situation, competitive strategy, core competitiveness, market performance, strengths and weaknesses of competitors. Competitor research is an important part of market research and an important tool for strategic management, which is of great significance to the survival and development of enterprises.

However, in practice, many companies have some misunderstandings and traps when conducting competitor research, which leads to distorted, invalid or harmful research results, affects the company's strategy and decision-making, and even causes the company's competitive disadvantage. This paper summarizes five common misunderstandings and precautions from the aspects of the definition of competitors, the purpose, content, method, analysis and application of research, and puts forward suggestions on how to avoid blind imitation and falling into price war with the actual case of Shangpu Consulting Company, in order to help enterprises improve the quality and effect of competitor research and realize the competitive advantage of differentiation and superiority.

Myth 1: Competitors are defined too narrowly or too broadly

The definition of competitors is the first and most critical step in competitor research, because only by identifying competitors can we effectively collect and analyze competitor information and develop targeted competitive strategies. However, many companies have problems that are too narrow or too broad when defining their competitors, leading to deviations in the scope and direction of research, missed opportunities or wasted resources.

An overly narrow definition of competitors means that an enterprise focuses only on direct competitors that are similar to its own products or services, of comparable price or quality, and of similar market share or position, ignoring potential, indirect or alternative competitors, such as new entrants, crossovers, substitute providers, etc. This approach can easily lead to an incomplete understanding of the competitive environment, an untimely warning of competitive threats, and an inaccurate grasp of competitive opportunities, thus losing their competitive advantage.

An overly broad definition of competitors means that an enterprise regards all market entities that have a relationship or influence with it, such as suppliers, channel providers, customers, government, society, etc., as competitors, or all enterprises that have similarities with itself, such as the same industry, the same scale, the same region, etc., as competitors. This approach can easily lead to unclear understanding of the competitive environment, inadequate information collection and analysis of competitors, and unspecific formulation of competitive strategies, thereby reducing competitive efficiency.

Therefore, enterprises should follow the following principles when defining competitors:

Take the customer's needs and mind as the guide, identify those competitors who can meet or influence the customer's needs, instead of focusing on their own products or services and identifying those competitors who are similar to their own products or services.

Based on the structure and dynamics of the market, identify those competitors that threaten or challenge their market share or profits, rather than using their own industry or size as a criterion to identify those competitors that are the same as their own industry or size.

Take your own strategy and goals as a reference to identify those competitors who have an impact or help on your own strategy or goals, rather than using your own region or channel as a boundary to identify those competitors who are similar to your own region or channel.

Myth 2: The purpose of competitor research is not clear or specific.

The purpose of competitor research refers to the reason and significance of competitor research, the starting point and destination of competitor research, and the basis and guidance of the content, method, analysis and application of competitor research. However, when many companies conduct research on competitors, there are problems with unclear or unspecific purposes, which leads to unclear direction and focus of the research, unclear results and value of the research, and unsatisfactory results and efficiency of the research.

Competitor research with unclear purpose means that the company does not clarify the root cause of its competitor research, just to cope with the form, go through the scene, follow the trend, or just to obtain some superficial, irrelevant information that cannot guide decision-making, rather than to solve the actual problems it faces, improve its competitiveness, and achieve its strategic goals. This approach can easily lead to a lack of awareness of the importance and necessity of competitor research, a lack of investment and support for competitor research, a lack of attention to the process and results of competitor research, and a lack of attention to the quality and effectiveness of competitor research.

This approach can easily lead to unclear understanding of the value and significance of competitor research, unclear objectives and direction of competitor research, unreasonable content and methods of competitor research, and ineffective analysis and application of competitor research.

Non-specific competitor research means that the company does not specify its specific objectives for conducting competitor research, but only to obtain some general, undifferentiated, and hierarchical information, rather than to obtain some specific, differentiated, In-depth information. This approach can easily lead to unclear scope and focus of competitor research, inadequate information and knowledge of competitor research, and unwise strategies and actions on competitor research.

Therefore, enterprises should follow the following principles when determining the purpose of competitor research:

Take your own problems and needs as the guide, find out the competitor information that can help you solve the problem or meet the needs, instead of being driven by your own interest or curiosity, find out the competitor information that is irrelevant or useless to you.

Based on your own abilities and resources, find out the information of competitors that can meet your own abilities and resources, rather than using your own wishes or ideals as the standard to find out the information of competitors that exceed your own abilities and resources.

Using one's own strategies and actions as a reference, identify information about competitors that can support or guide one's strategies and actions, rather than relying on one's own feelings or guesses to identify information about competitors that cannot support or guide one's strategies and actions.

Myth 3: Competitor research is not comprehensive or important

The content of competitor research refers to the relevant information of competitors that enterprises need to collect and analyze when conducting competitor research, which is the core and basis of competitor research, and also the source of the results and value of competitor research. However, when many enterprises conduct competitor research, there are problems that the content is not comprehensive or important, which leads to incomplete or useless information and knowledge, inaccurate or ineffective research strategies and actions, and the competitive advantage of research is not obvious or lasting.

The incomplete content of competitor research means that the company only collects and analyzes part of the competitor's information, such as the competitor's basic information, product or service characteristics, price or cost structure, market share or position, etc., and ignores other competitors Information, such as competitors' strategic intentions, core competitiveness, innovation capabilities, customer satisfaction, financial status, organizational structure, human resources, cultural atmosphere, etc. This approach can easily lead to a lack of in-depth understanding of competitors, a lack of clarity about competitors' strengths and weaknesses, and an insensitivity to competitors' movements and changes, thus losing competitive opportunities or suffering competitive threats.

The content is not important competitor research, refers to the enterprise only collects and analyzes the general information of competitors, such as the history of competitors, product or service introduction, price or cost level, market share or position changes, etc., ignoring the key information of competitors, such as the strategic objectives of competitors, core competitiveness, innovation ability, customer needs, financial situation, organizational structure, human resources, cultural atmosphere, etc. This approach can easily lead to an inaccurate understanding of competitors, a lack of attention to competitors' strengths and weaknesses, and a lack of attention to competitors' movements and changes, thereby reducing competitive effectiveness or increasing competitive risk.

Therefore, enterprises should follow the following principles when determining the content of competitor research:

Take the whole picture and essence of the competitor as the goal, find out the comprehensive and in-depth information that can reflect the competitor, rather than the appearance and phenomenon of the competitor as the basis, find out the information that can only reflect the part and surface of the competitor.

Focus on the differences and advantages of competitors, and find out the information that can reflect the differentiation and superiority of competitors, rather than the similarity and peace of competitors as a reference, and find out the information that can only reflect the homogenization and mediocrity of competitors.

Focus on the dynamics and changes of competitors and identify information that reflects the dynamics and changes of competitors, rather than on the premise of the static and stability of competitors and identify information that only reflects the static and stability of competitors.

Myth 4: Competitor research methods are unreasonable or unscientific

The method of competitor research refers to the technology and means that enterprises need to use to collect and analyze competitor information when conducting competitor research, which is the tool and way of competitor research, and also the guarantee of the quality and effect of competitor research. However, many companies have unreasonable or unscientific methods when conducting competitor research, resulting in inaccurate or unreliable information and knowledge, unreasonable or unfeasible research strategies and actions, and unstable or unsustainable research competitive advantages.

Methods Unreasonable competitor research means that enterprises only use one or a few competitor information collection and analysis methods, such as relying only on open, second-hand, outdated information sources, such as networks, newspapers, reports, etc., or relying only on subjective, first-hand, instant information sources, such as their own observations, surveys, interviews, etc. This practice can easily lead to incomplete, objective, unsystematic and ineffective collection and analysis of competitor information, thus affecting the accuracy and reliability of competitor information.

Unscientific competitor research means that the enterprise does not adopt appropriate methods for collecting and analyzing competitor information, such as not selecting appropriate data types, data sources, data tools, data technologies, etc. according to the characteristics and purposes of competitor information, or not carrying out effective data cleaning, data integration, data analysis, data presentation, etc. according to the quality and effect of competitor information. This practice can easily lead to unreasonable, unscientific, unstandardized and unprofessional collection and analysis of competitor information, thus affecting the usefulness and value of competitor information.

Therefore, enterprises should follow the following principles when determining the method of competitor research:

Based on the diversity and complexity of competitor information, identify those methods that can adapt to the diversity and complexity of competitor information, rather than assuming the singularity and simplicity of competitor information, identify those methods that can only adapt to the singularity and simplicity of competitor information.

Conditional on the availability and operability of competitor information, identify those methods that can be consistent with the availability and operability of competitor information, rather than ideally, those methods that can only be consistent with the infinity and accessibility of competitor information.

Using the credibility and availability of competitor information as a criterion, identify those methods that can ensure the credibility and availability of competitor information, rather than targeting the absoluteness and perfection of competitor information and identifying those methods that can only ensure the absoluteness and perfection of competitor information.

Myth 5: The analysis of competitor research is not objective or in-depth.

The analysis of competitor research refers to the interpretation and evaluation of the collected and collated competitor information after conducting competitor research, which is the key and difficult point of competitor research, and also the embodiment of the results and value of competitor research. However, many enterprises in the analysis of competitor research, there are problems that the analysis is not objective or in-depth, resulting in the information and knowledge of the research is not true or meaningful, the research strategy and action is unreasonable or ineffective, the competitive advantage of the research is not obvious or not lasting.

Competitor research with non-objective analysis refers to that when an enterprise analyzes competitor information, it is affected by its own subjective bias, emotional tendency, cognitive framework, etc., which leads to unfair, non-neutral and irrational evaluation of competitors, such as over-exaggerating or belittling the advantages or disadvantages of competitors, and over-neglecting or paying attention to the threats or opportunities of competitors, overly optimistic or pessimistic about the movements or changes of competitors, etc. This approach can easily lead to an untrue understanding of competitors, inappropriate strategies and actions against competitors, and an unstable competitive advantage over competitors.

Competitor research without in-depth analysis refers to that when an enterprise analyzes competitor information, it fails to use appropriate analysis framework, analysis model, analysis method, etc., resulting in incomplete, in-depth and unsystematic evaluation of competitors, such as only paying attention to the current situation or performance of competitors, not paying attention to the reasons or background of competitors, and only paying attention to individual or isolated information of competitors, instead of focusing on the overall or associated information of the competitor, focusing only on the static or stable information of the competitor, and not on the dynamic or changing information of the competitor, etc. This approach can easily lead to an enterprise's perception of competitors that is not meaningful, its strategies and actions against competitors that are not effective, and its competitive advantage over competitors that is not sustainable.

Therefore, companies should follow the following principles when conducting competitor research and analysis:

Based on the facts and data of competitors, find out those analyses that can reflect the true and objective of competitors, rather than relying on their own feelings and guesses, and find out those analyses that can only reflect their own subjectivity and bias.

Guided by the logic and laws of competitors, find out those that can reflect the comprehensive and in-depth analysis of competitors, rather than guided by their own experience and habits, and find out those that can only reflect their own one-sided and shallow analysis.

Focus on the trends and changes of competitors and identify those analyses that reflect the dynamics and changes of competitors, rather than those that reflect only their own static and stable analyses based on their own current situation and stability.

How to avoid blind imitation and falling into price war

The ultimate goal of competitor research is to develop effective competitive strategies and actions to achieve your competitive advantage. However, many enterprises in the development of competitive strategy and action, often make two mistakes: blind imitation and into the price war. Blind imitation means that an enterprise does not blindly follow or copy competitors' products or services, prices or costs, channels or promotions according to its own characteristics and advantages, resulting in the lack of differentiation and characteristics of its own products or services. lose their core competitiveness and market positioning. Falling into a price war means that an enterprise does not blindly lower or raise its own price according to its own value and profit, and engages in fierce price competition with competitors, resulting in the lack of quality and credibility of its own products or services, and damaging its own financial situation and brand image. These two kinds of mistakes will lead to the decline of the competitiveness of enterprises, the reduction of market share, the reduction of profit margin, and even the survival crisis.

Therefore, enterprises should follow the following principles when formulating competitive strategies and actions:

Based on their own characteristics and advantages, find out those competitive strategies and actions that can highlight their own differentiation and characteristics, rather than taking the characteristics and advantages of competitors as a reference, and find out those competitive strategies and actions that can only imitate or copy competitors.

Take your own value and profit as the goal, identify those competitive strategies and actions that can improve your own quality and reputation, rather than taking the value and profit of your competitors as a challenge, and identify those competitive strategies and actions that can only lower or raise your own price.

Take one's own innovation and change as the driving force, find out those competitive strategies and actions that can enhance one's core competitiveness and market positioning, rather than taking the innovation and change of competitors as a threat, and find out those competitive strategies and actions that can only maintain or give up one's competitive advantage.

Shangpu consulting company is a professional competitor research and competitive strategy consulting company, with many years of industry experience and professional knowledge, for many customers to provide high-quality competitor research and competitive strategy consulting services. The following are some specific cases of Champ Consulting:

Case 1: A home appliance company is facing fierce competition from domestic and foreign competitors, especially in the mid-to-high-end market. Competitors have strong advantages in product quality, technical level, brand image, etc., resulting in the company's market share and Profit margins decline. Shangpu Consulting Company conducted a comprehensive competitor survey for the enterprise, analyzed the competitor's strategic objectives, core competitiveness, innovation ability, customer needs, financial situation, organizational structure, human resources, cultural atmosphere and other aspects of information, to find out the strengths and weaknesses of competitors, threats and opportunities, trends and changes. According to the characteristics and advantages of the enterprise, the company has formulated targeted competitive strategies and actions, including:

In terms of products, we should highlight the differentiation and characteristics of the enterprise, develop product series that meet the needs and preferences of different consumers, improve the functionality, personalization and intelligence of products, and increase the added value and experience of products.

In terms of price, improve the quality and reputation of the enterprise, adopt the strategy of value pricing, according to the cost, value and market conditions of different products, formulate a reasonable price range, avoid vicious price competition with competitors, improve the profit margin and rate of return of products.

In terms of channels, enhance the core competitiveness and market positioning of the company, adopt a multi-channel strategy, use its own, cooperative, network and other channels to expand product coverage and influence, and increase product sales and market share.

In terms of promotion, enhance the power of innovation and change of the enterprise, adopt diversified strategies, use advertising, public relations, activities, gifts and other means to improve the popularity and reputation of products, and increase the attractiveness and loyalty of products.

Through the competitor research and competitive strategy consulting services of Shangpu Consulting Company, the company has successfully enhanced its competitive advantage and achieved breakthrough and growth in the middle and high-end market.

Case 2: A clothing company is facing challenges from many competitors, especially in the low-end market. Competitors have strong advantages in product prices, promotional activities, channel coverage, etc., resulting in the company's market share and profit margin Decline. Shangpu Consulting Company conducted a comprehensive competitor survey for the company, and analyzed the competitor's strategic intent, core competitiveness, innovation ability, customer satisfaction, financial status, organizational structure, human resources, cultural atmosphere and other aspects of information. Find out the strengths and weaknesses, threats and opportunities, trends and changes of competitors. According to the characteristics and advantages of the enterprise, the company has formulated targeted competitive strategies and actions, including:

In terms of products, highlight the differentiation and characteristics of the company, develop product lines that meet different consumer needs and preferences, improve product design, fashion and comfort, and increase product added value and experience.

In terms of price, to improve the quality and reputation of the enterprise, the use of cost-plus strategy, according to the cost of different products, value and market conditions, to develop a reasonable price range, to avoid vicious price competition with competitors, improve product profitability and return.

In terms of channels, enhance the core competitiveness and market positioning of the enterprise, adopt professional strategies, use their own, cooperative, network and other channels to expand product coverage and influence, and increase product sales and market share.

In terms of promotion, enhance the enterprise's innovation and change momentum, the use of personalized strategies, the use of advertising, public relations, events, gifts and other means to improve product visibility and reputation, increase product attractiveness and loyalty.

Through the competitor research and competitive strategy consulting services of Shangpu Consulting Company, the company has successfully enhanced its competitive advantage and achieved breakthrough and growth in the low-end market.