Competitor analysis refers to the process of systematically collecting, organizing, analyzing and evaluating the characteristics, behaviors, capabilities, objectives and strategies of existing or potential competitors faced by an enterprise in order to provide useful information and guidance for the formulation of an enterprise's strategy. The main purposes of competitor analysis are as follows:

Understand the competitive environment. Through competitor analysis, companies can understand the development trends, competitive landscape, market opportunities and threats of their industry, so as to make reasonable market positioning and target setting.

Identify competitive strengths and weaknesses. Through competitor analysis, enterprises can understand their own and competitors' strengths and weaknesses, as well as their respective core competitiveness and differentiation factors, so as to find their own competitive advantages and room for improvement.

Develop effective competitive strategies. Through competitor analysis, enterprises can predict the behavior and reaction of competitors, as well as their impact and threat, so as to formulate their own competitive strategies, such as attack, defense, cooperation, avoidance and so on.

The effectiveness and quality of competitor analysis depends on two important factors: the source of the data and the choice of tools. Data sources refer to the sources of information on which competitor analysis relies, and tool selection refers to the analytical methods and techniques used in competitor analysis. The following will be discussed from these two aspects.

Data source

The data source is the basis of competitor analysis, which determines the reliability and validity of competitor analysis. Data sources can be divided into three categories: internal data, external data and first-hand data.

Internal data. Internal data refers to the information about competitors that the enterprise has or can obtain, such as sales data, cost data, financial data, customer data, employee data, etc. The advantages of internal data are easy access, low cost, and high credibility; the disadvantages are limited, incomplete, and possibly outdated.

External data. External data refers to the information about competitors obtained by enterprises through external channels or institutions, such as industry reports, market research, media reports, government public information, patent literature, official websites of competitors, social media, etc. The advantages of external data are extensive, comprehensive and timely; the disadvantages are difficult to obtain, high cost and low credibility.

First hand data. First-hand data refers to the information about competitors obtained by enterprises through their own active investigation or observation, such as mysterious customers, in-depth interviews, field observation, experimental testing, etc. The advantage of first-hand data is that it is direct, effective, and unique; the disadvantage is that it requires professional skills, time costs, and labor costs.

When choosing data sources, enterprises should comprehensively consider the availability, reliability, validity and cost-effectiveness of data according to their own goals and needs, choose appropriate and effective data sources, and pay attention to the quality and safety of data. Generally speaking, enterprises should try to use multiple data sources to improve the coverage and accuracy of data and avoid data bias and misleading.

Tool Selection

Tool selection is the core of competitor analysis, which determines the depth and breadth of competitor analysis. Tool selection can be divided into four categories: SWOT analysis, five-force analysis, value chain analysis and strategic group analysis.

SWOT analysis. SWOT analysis is a method to assess the competitive situation and development potential of an enterprise by analyzing the advantages (Strengths), disadvantages (Weaknesses), opportunities (Opportunities) and threats (Threats) of the enterprise and its competitors. The advantages of SWOT analysis are simple, intuitive, and easy to understand; the disadvantages are subjective, static, and lack of quantification.

Five forces analysis. Five forces analysis is a method of assessing the degree of competition and profitability of an industry by analyzing the five competitive forces in the industry, namely existing competitors, potential entrants, substitutes, suppliers and buyers. The advantages of five forces analysis are systematic, dynamic and objective; the disadvantages are complex, abstract and difficult to quantify.

Value Chain Analysis. Value chain analysis is a method of evaluating the competitive advantages and disadvantages of an enterprise by analyzing the various activities carried out by the enterprise and its competitors in the process of producing and selling products or services, as well as the value and costs created by these activities. The advantage of value chain analysis is that it is detailed, practical and targeted; the disadvantage is that it is cumbersome, time-consuming and difficult to compare.

Strategic group analysis. Strategic group analysis is a method to assess the competitive position and competitive pressure of an enterprise by dividing competitors in the industry into different groups according to their similar strategic characteristics and behaviors. The advantage of strategic group analysis is that it is clear, effective and recognizable; the disadvantage is that it is subjective, vague and difficult to define.

When selecting tools, enterprises should consider the applicability, operability, comparability and scalability of the tools according to their own goals and needs, and choose appropriate and effective tools, while paying attention to the limitations and assumptions of the tools. In general, companies should try to use a variety of tools to improve the comprehensiveness and effectiveness of the analysis and avoid the limitations and biases of the tools.

take champ consulting firm as an example

Shangpu Consulting Company is a consulting organization specializing in providing strategic consulting, market research, data analysis and other services. Its customers cover many industries and fields, such as finance, telecommunications, medical care, education, energy, etc. Champ Consulting typically uses the following data sources and tool choices when conducting competitor analysis for its clients:

Data sources. According to the needs of customers and the characteristics of the industry, Shangpu consulting company will select the appropriate data sources, including internal data, external data and first-hand data. Internal data mainly comes from the customer's own sales data, financial data, customer satisfaction data, etc., which can help Shangpu Consulting understand the current situation and problems of the customer. External data mainly comes from industry reports, market research, media reports, government public information, etc. These data can help Shangpu Consulting understand the development trend of the industry, the competitive landscape, market opportunities and threats. First-hand data mainly comes from Shangpu Consulting's own active investigation or observation, such as mysterious customers, in-depth interviews, field observations, etc. These data can help Shangpu Consulting understand the characteristics, behaviors, capabilities, goals, strategies, etc. of competitors.

Tool selection. Champ Consulting will select the appropriate tools based on the client's goals and needs, including SWOT analysis, five forces analysis, value chain analysis and strategic group analysis. SWOT analysis can help Shangpu Consulting to assess the strengths and weaknesses of customers and competitors, as well as the opportunities and threats of the market, so as to formulate appropriate strategies for customers. Five forces analysis can help Shangpu Consulting to evaluate the degree of competition and profitability of the industry, so as to choose the right industry and market for customers. Value chain analysis can help Shangpu Consulting to assess the value and cost of customers and competitors in the production and sales process, so as to find competitive advantages and room for improvement for customers. Strategic group analysis can help Shangpu Consulting to assess the competitive position and competitive pressure of the client, so as to choose the appropriate competitive strategy for the client.

The following is a specific example of a competitor analysis conducted by Champ Consulting for a telecom operator customer:

customer needs. The customer is a telecom operator with a high share in the domestic market, and its main business includes mobile communications, fixed broadband, Internet access, etc. The customer hopes to understand his competitive situation in the telecommunications industry through competitor analysis, and how to deal with the challenges and threats of competitors, so as to improve his market share and profitability.

Data sources. Champ Consulting selected the following data sources for this client:

Internal data. Shangpu Consulting obtained its sales data, financial data, customer satisfaction data, etc. from customers in recent years to understand customer performance, cost, revenue, profit, market share, customer loyalty and other indicators.

External data. Shangpu Consulting has obtained data on the telecommunications industry from various channels and institutions, such as industry reports, market research, media reports, government public information, etc., to understand the development trend, competition pattern, market size, market growth rate, market demand, market segmentation, market opportunities and threats of the telecommunications industry.

First hand data. Through its own active surveys or observations, Shangpu Consulting obtains data about the client's main competitors, such as mystery customers, in-depth interviews, field observations, etc., to understand the characteristics, behaviors, capabilities, goals, strategies and other information of competitors.

Tool selection. Champ Consulting selected the following tools for this client:

SWOT analysis. Through SWOT analysis, Champ Consulting assesses the strengths and weaknesses of the client and its main competitors, as well as the opportunities and threats in the market. The results are as follows:

SWOT Customer Competitor A Competitor B

Advantages: high brand awareness, large market share, wide network coverage, high service quality, high customer loyalty, low business diversification price, fast market growth, strong innovation ability, good Internet business development, multi-partner technology leadership, high product quality, good user experience, 5G business leadership, international market expansion

Disadvantages: high cost, low profit, weak innovation ability, backward Internet business, low brand awareness due to policy restrictions, small market share, narrow network coverage, poor service quality, high customer turnover rate, high price of single business, slow market growth, uneven network coverage, average service quality, average customer loyalty and single business

Opportunities Telecom industry continues to grow, market demand is strong, 5G technology promotion, Internet business development, international market expansion Telecom industry continues to grow, market demand is strong, 5G technology promotion, Internet business development, international market expansion Telecom industry continues to grow, market demand is strong, 5G technology promotion, Internet business development, international market expansion

Threat competitor challenge, customer shift, policy change, technology update, market saturation competitor challenge, customer shift, policy change, technology update, market saturation competitor challenge, customer shift, policy update, market saturation

-Five forces analysis. Champu Consulting assessed the degree of competition and profitability of the telecommunications industry through a five-force analysis. The results are as follows:

five forces analysis

Existing competitors There are three main existing competitors in the telecommunications industry, namely, customer, competitor A and competitor B. The competition between these three companies is very fierce, mainly reflected in the price, products, services, technology, market and so on. The impact of competition in the telecommunications industry on customers is positive, because it can promote customers to improve their competitiveness and efficiency, and it is also negative, because it will reduce customers' profits and market share.

Potential entrants There are two main types of potential entrants in the telecommunications industry, one is cross-border entrants in other industries, such as Internet companies, e-commerce companies, social media companies, etc., and the other is emerging telecom operators, such as virtual operators, regional operators, etc. The impact of these two types of potential entrants on customers is negative because they increase competitive pressure on customers, divert customers' markets and resources, and threaten customers' core competencies.

There are two main types of alternatives in the telecommunications industry, one is other forms of communication, such as mail, fax, video conferencing, etc., and the other is other forms of information services, such as online video, online music, and online games. These two types of alternatives have a negative impact on customers because they reduce the demand and value of their products and services, affecting their revenues and profits.

There are two main types of suppliers in the telecommunications industry, one is equipment suppliers, such as Huawei, ZTE, Ericsson, etc., and the other is content providers, such as Tencent, Alibaba, Baidu, etc. The impact of these two types of suppliers on customers is two-sided, on the one hand, they can provide customers with high-quality equipment and content, improve the quality and attractiveness of customers' products and services, on the other hand, they can also put pressure on customers to increase the purchase price or share, affecting customers' costs and profits.

Buyers There are two main types of buyers in the telecommunications industry, one is individual users and the other is corporate users. The impact of these two types of buyers on customers is two-sided. On the one hand, they can provide customers with stable market demand and sources of income. On the other hand, they can also put forward higher requirements and expectations for customers, such as lower The price, better products, better services, more rights and interests, etc., affect customer satisfaction and loyalty.

-Value chain analysis. Through value chain analysis, Champ Consulting assesses the value and costs of customers and their major competitors in the production and sales process. The results are as follows:

Value Chain Customer Competitor A Competitor B

Procurement customers have a large procurement capacity, mainly through long-term cooperation or negotiation with equipment suppliers and content suppliers, which provide customers with high-quality equipment and content, while also reducing the customer's procurement costs and risks. Competitor A has a small procurement capacity, mainly through short-term cooperation or competition with equipment suppliers and content suppliers, which provides competitor A with general equipment and content, while also increasing competitor A's procurement costs and risks. Competitor B has a large procurement capacity, mainly through long-term cooperation or negotiation with equipment suppliers and content suppliers, which provides high-quality equipment and content for competitor B, while also reducing the procurement costs and risks of competitor B.

Production customers have high production capacity, mainly through their own network infrastructure and equipment, as well as collaboration with partners, these production to provide customers with a variety of products and services, such as mobile communications, fixed broadband, Internet access, etc., but also increase the customer's production costs and risks. Competitor A has a low production capacity, mainly through leasing or sharing the network infrastructure and equipment of other operators, as well as collaboration with partners, these production provides competitor A with general products and services, such as mobile communications, Internet access, etc., while also reducing the production costs and risks of competitor A. Competitor B has a high production capacity, mainly through its own network infrastructure and equipment, as well as collaboration with partners. These productions provide competitor B with high-quality products and services, such as mobile communications, fixed broadband, and Internet Access, 5G services, etc., but also increase the production costs and risks of competitor B.

Marketing customers have strong marketing capabilities, mainly through their own sales channels and networks, as well as with partners, these marketing to provide customers with a wide range of market coverage and promotion, but also increase the customer's marketing costs and risks. Competitor A has weak marketing capabilities, mainly through outsourcing or cooperation, which provides limited market coverage and promotion for competitor A, while also reducing the marketing costs and risks of competitor A. Competitor B has strong marketing capabilities, mainly through its own sales channels and networks, as well as synergies with partners, which provide competitor B with extensive market coverage and promotion, while also increasing competitor B's marketing costs and risks.

Service customers have high service capabilities, mainly through their own service channels and networks, as well as collaboration with partners. These services provide customers with high-quality pre-sales, in-sales, and after-sales services, and also increase customer service costs. And risk. Competitor A has a lower service capability, mainly through outsourcing or cooperation, which provides general pre-sales, in-sales and after-sales services for competitor A, while also reducing the service costs and risks of competitor A. Competitor B has a high level of service capabilities, mainly through its own service channels and networks, as well as collaboration with partners, these services for competitor B to provide quality pre-sales, in-sales, after-sales service, but also increased the cost of services and risks of competitor B.

-Strategic group analysis. Champ Consulting assessed the competitive position and competitive pressures of the client through a strategic group analysis. The results are as follows:

Strategic group characteristics represent competitive pressure

The high-end strategic group is characterized by high quality, high technology and high price. It mainly aims at the high-end market and high-end users, pursues the innovation and optimization of products and services, and has strong brand influence and market share. Competitor B High

The mid-range strategic group is characterized by medium quality, medium technology, and medium price. It mainly targets the mid-range market and mid-range users, pursues the balance and stability of products and services, and has high brand awareness and market share. In the customer

The low-end strategic group is characterized by low quality, low technology, and low price. It mainly targets the low-end market and low-end users, pursues the cost and efficiency of products and services, and has low brand awareness and market share. Competitor A Low

Analyze the results. Based on the above data sources and tool selection, Champ Consulting provided the following analysis results to the client:

The competitive situation of customers in the telecommunications industry is medium. Customers have high brand awareness, market share, network coverage, service quality, customer loyalty and other advantages, but they also face higher costs, lower profits, and weaker The disadvantages of innovation ability and backward Internet business.

The development potential of customers in the telecommunications industry is greater, and customers have more market opportunities and development space, such as the promotion of 5G technology, the development of Internet business, and the expansion of the international market. Customers need to use their own advantages, such as brand awareness, market share, network coverage, service quality, customer loyalty, etc., to seize these opportunities, but also need to improve their own disadvantages, such as cost, profit, innovation ability, Internet business, etc., to meet these challenges.

Champ Consulting provides the following recommendations and solutions to its clients:

In terms of products and services, customers should strengthen their innovation capabilities and develop more high-quality, high-tech, and high-value products and services to meet the needs of the high-end market and high-end users, while also maintaining their own diversification And balance to cover the needs of mid-market and mid-end users, and avoid being pinched and squeezed by competitor A and competitor B.

In terms of price, customers should adopt a differentiated pricing strategy, according to different products, services, markets and users, to set a reasonable price to reflect the value of their products and services, but also to consider the price of competitors, in order to maintain their own price competitiveness and rationality.

In terms of marketing, customers should strengthen their marketing capabilities, use their own sales channels and networks, and collaborate with partners to carry out effective market coverage and promotion. At the same time, they should also use new media and social media to carry out creative marketing. And interaction to enhance their brand influence and market share.

In terms of service, customers should strengthen their service capabilities, use their own service channels and networks, and collaborate with partners to provide high-quality pre-sales, in-sales, and after-sales services. At the same time, they should also use big data and artificial intelligence to conduct Intelligent service management and optimization to improve their service quality and customer satisfaction.

The competitor analysis of Shangpu Consulting provides customers with valuable information and guidance to help them understand their competitive situation and development potential in the telecommunications industry, formulate effective competitive strategies, and increase their market share and profitability. The client expressed a high degree of recognition and satisfaction with the competitor analysis of Shangpu Consulting Company and established a long-term cooperative relationship with Shangpu Consulting Company.