Four levels of competitor analysis

The first step in competitor analysis is to determine who your competitors are. According to Michael Porter's competitive strategy framework, competitors can be divided into the following four levels:

Industrial competitors: Other companies that sell the same or similar products or services in the same market. This is the most direct competitor and the easiest to find. For example, Shangpu Consulting's industrial competitors include other companies that provide market research, investment and financing consulting, IPO listing consulting and other services, such as 1, 2, 3, etc.

Buyer: A consumer or customer in the market whose demand, preference, purchasing power, etc. for a product or service affects the sales and profits of the business. The competitiveness of buyers depends on their bargaining power and alternative options. For example, the buyers of Champ Consulting include companies in a variety of industries, and their needs and budgets for market research and investment and financing consulting affect the revenues and profits of Champ Consulting.

Supplier: Refers to other companies or individuals that provide raw materials, equipment, manpower, capital and other production factors for the enterprise. The competitiveness of suppliers depends on their supply capacity and bargaining power. For example, the suppliers of Shangpu Consulting include various data sources, software platforms, talent markets, financial institutions, etc., which have a significant impact on the quality and cost of Shangpu Consulting's services.

Substitute: Refers to other products or services that can meet the same or similar consumer needs, but do not belong to the same market. The competitiveness of alternatives depends on their cost performance and innovation ability. For example, alternatives to Champ Consulting include various self-service market analysis tools, online education platforms, social media, etc., which may reduce Champ Consulting's potential customer base and market share.

In addition to these four levels, there is another level of potential entrants, which refers to other companies or individuals who intend to enter the same market. The competitiveness of potential entrants depends on their resources and capabilities, as well as the barriers to entry in the market. For example, potential entrants to Champ Consulting include consulting firms in other industries, Internet companies, academic institutions, etc., and they may use their own advantages and market opportunities to pose a threat to Champ Consulting.

Competitors at each level have different levels of influence and threat, which need to be weighed and dealt with according to their own circumstances. Generally speaking, industrial competitors are the most direct and strongest competitors, which need to be focused on and analyzed; buyers and suppliers are important factors affecting corporate profits, and relationships need to be maintained and managed; substitutes and potential entrants are potential factors affecting the future development of enterprises, which need to be vigilant and guarded against.

Five key points of competitor analysis

The second step of competitor analysis is to collect and analyze relevant information about competitors to understand their strengths and weaknesses, so as to develop a more accurate strategy for their products. The five main points of competitor analysis are:

Find competitors: through search engines, classified websites, advertising history and other methods, to find out with their own companies or individuals in the same market competition, generally choose 3 to 5 of the most important competitors for in-depth analysis.

Get background information: Get basic information about competitors, such as year of establishment, investors, acquiring companies, number of employees, number of customers, revenue, etc., through company overview websites, financial statements, news reports, etc., to understand the size, history and financial status of competitors.

Research products and services: through personal experience, user evaluation, professional evaluation, etc., to understand the functions, characteristics, advantages and disadvantages, prices, etc. of competitors' products and services, in order to understand the competitors' product and service capabilities.

Familiar with the target and positioning: through the home page, advertising, slogans, promotional materials and other channels, understand the competitor's target market and target customers, as well as their brand image, value proposition, core advantages, etc., in order to understand the competitor's market positioning and brand positioning.

Analyze strengths and weaknesses: Analyze competitors' strengths and weaknesses, as well as their opportunities and threats, to understand competitors' competitiveness and trends through SWOT analysis and other methods, integrating competitors' background information, products and services, objectives and positioning.

Each key point requires the use of effective methods and tools to obtain comprehensive and accurate data and information. At the same time, it is also necessary to pay attention to the fact that the information of competitors may change with time and market changes, so it is necessary to regularly update and track the dynamics and changes of competitors.

Application of Competitor Analysis

The third step of competitor analysis is to use the results of competitor analysis to develop your own product strategy and market strategy to enhance your competitiveness. The results of competitor analysis can help companies determine their market positioning, differentiation advantages, growth opportunities and risk prevention, so as to develop appropriate marketing strategies, product strategies, channel strategies and pricing strategies. Here are some specific application methods:

Determine market positioning: According to the competitor's target market and target customers, as well as their own resources and capabilities, determine their own target market and target customers, as well as their own position and role in the market. For example, the target market of Shangpu Consulting is small and medium-sized enterprises, and the target customers are enterprises that need market research and investment and financing consulting. Shangpu Consulting is positioned as a professional, efficient and flexible market research and investment and financing consulting service provider in the market.

Establish differentiation advantages: according to the advantages and disadvantages of competitors' products and services, as well as the characteristics of their own products and services, find out their own differentiation advantages, that is, which needs of customers can be met by their products and services, while competitors cannot or are not as good as their own. For example, the differentiated advantage of Shangpu Consulting is to provide customized, real-time updates, data-driven market research and investment and financing consulting services, as well as a consulting team with rich industry experience and expertise.

Looking for growth opportunities: according to the changes in the objectives and positioning of competitors, as well as changes in their own strengths and weaknesses, looking for growth opportunities in the market, that is, new markets or customers that their products and services can open up, or opportunities to increase market share or customer loyalty. For example, the growth opportunity of Shangpu Consulting is to use its data analysis capabilities and industry knowledge to provide customers with more value-added services, such as market forecasting, competitive strategy, risk assessment, etc., and expand customers in more industries and regions.

Preventing risk threats: according to changes in the strengths and weaknesses of competitors, as well as changes in their own opportunities and threats, to prevent risk threats in the market, that is, their own products and services may face challenges or crises from competitors or other factors. For example, the risk threat of Champ Consulting is that competitors may offer lower prices or better services, or that there may be more alternatives or potential entrants in the market, or that customer needs or preferences may change.

The above are some commonly used application methods, and the specific strategies need to be adjusted and optimized according to their own situation and market changes. Competitor analysis is not a one-time job, but an ongoing process that requires the continuous collection, analysis and application of competitor information to maintain its competitive advantage and market leadership.

Champ Consulting's Competitor Analysis Case

In order to better explain the methods and tools of competitor analysis, and how to develop strategies that meet their own characteristics and market needs based on the results of competitor analysis, this paper will combine the actual cases of Shangpu Consulting to carry out specific demonstrations and analysis.

Shangpu Consulting is a company specializing in providing market research and investment and financing consulting services. Founded in 2018, it is headquartered in Beijing and has about 50 employees. It mainly serves small and medium-sized enterprises, especially those in the Internet, technology, education and other industries. The core value of Shangpu Consulting is to provide customers with customized, real-time update, data-driven market research and investment and financing consulting services to help customers understand market trends, grasp market opportunities, formulate market strategies, find investors, and complete financing transactions.