Definition and significance of 1. competitor research

Competitor research refers to the process of collecting, sorting, analyzing and evaluating information about competitors to understand the scale, product, price, quality, service, channel, market share, marketing strategy, financial status, innovation ability, advantages and disadvantages of competitors, so as to provide a basis for enterprise decision-making.

The significance of competitor research is mainly as follows:

-Help enterprises understand their own industrial environment, clear their market positioning and target customers, to avoid blind entry or exit from the market.

-Help companies analyze their strengths and weaknesses, find out their core competitiveness, improve the quality of their products and services, and enhance their market competitiveness.

-Help enterprises to predict the trend and behavior of competitors, formulate effective competitive strategies, seize market opportunities, deal with competitive threats, and expand market share.

-Help companies discover market opportunities and challenges, explore new market needs and potential customers, innovate products and services, and open up new market space.

Five categories of 2. competitor research

The scope of competitor research is not limited to direct competitors, but also includes other forces that affect the competitiveness of enterprises in the market. In this paper, Porter's five forces model is used to divide the objects of competitor research into five categories, namely, industrial competitors, buyers, suppliers, substitutes and potential entrants. The definitions and identification methods of these five categories are described below.

1. Industrial competitors

Industrial competitors are companies in the same industry that provide the same or similar products or services, and there is direct competition between them, competing for customers and profits in the same market. The degree of competition of industrial competitors depends on the structure of the industry and is mainly influenced by the following factors [^ 2 ^][2]:

-The number and size of competitors in the industry: the more competitors, the more similar the size, the more intense the competition.

-The degree of product differentiation in the industry: the more homogeneous the product, the more intense the competition.

-Growth rate in the industry: The lower the growth rate of the industry, the fiercer the competition.

-Exit barriers in the industry: The higher the exit barrier, the fiercer the competition.

There are several main ways to identify industry competitors [^ 3 ^][3]:

-Through market research, understand the market size, structure, distribution, share, etc., to identify the main competitors and potential competitors.

-Through industry associations, professional media, exhibitions, forums and other channels, to obtain industry trends, trends, policies, standards and other information, to find new competitors and changing competitors.

-Through customer research, understand customer needs, preferences, satisfaction, loyalty, etc., identify customer alternatives and competitors' strengths and weaknesses.

-Through competitor research, collect information on competitors' products, prices, quality, services, channels, marketing strategies, financial status, innovation capabilities, etc., and analyze competitors' strategic intentions and behavior patterns.

2. The Buyer

Buyers are customers who purchase the products or services of an enterprise and have a direct impact on the competitiveness of the enterprise because they can reduce the price and profit of the enterprise through bargaining, diversion, concentration, etc. The buyer's bargaining power depends on the following factors:

-Concentration of buyers: The more concentrated the buyers, the stronger the bargaining power.

-The buyer's information level: the more information the buyer has, the stronger the bargaining power.

-Buyer's replacement costs: The lower the cost for the buyer to switch to other competitors, the stronger the bargaining power.

-The importance of the buyer: the higher the buyer's contribution to the profit of the enterprise, the weaker the bargaining power.

-Buyer's price sensitivity: The more sensitive the buyer's response to price, the stronger the bargaining power.

There are several main ways to identify buyers:

-Identify target markets and target customers through market segmentation, and understand customer characteristics, needs, preferences, and behaviors.

-Through customer satisfaction survey, evaluate the customer's cognition, feeling, evaluation and loyalty to the enterprise's products or services.

-Through customer value analysis, calculate the life cycle value of customers, determine the importance and priority of customers.

-Through customer relationship management, establish and maintain communication, interaction, cooperation, trust and other relationships with customers, improve customer satisfaction and loyalty.

3. Supplier

Suppliers are those who provide raw materials, equipment, technology, manpower and other elements to the enterprise, which have an indirect impact on the competitiveness of the enterprise, because they can increase the cost and risk of the enterprise by raising prices, reducing quality, limiting supply, etc. The supplier's bargaining power depends on the following factors:

-Concentration of suppliers: the more concentrated the suppliers, the stronger the bargaining power.

-The degree of differentiation of the supplier: the more distinctive the supplier's product or service, the stronger the bargaining power.

-Switching costs for suppliers: The higher the cost for suppliers to switch to other customers, the greater the bargaining power.

-The importance of the supplier: the greater the impact of the supplier on the cost and quality of the enterprise, the stronger the bargaining power.

-Vertical integration of suppliers: the higher the possibility of suppliers entering the industry, the stronger the bargaining power.

The methods of identifying suppliers are mainly as follows:

-Identify the upstream suppliers of the enterprise through supply chain analysis, and understand the characteristics, capabilities, quality, price, service, etc. of the suppliers.

-Through supplier evaluation, evaluate the supplier's reputation, stability, cooperation, innovation, etc., to determine the supplier's advantages and disadvantages and risks.

-Through supplier negotiation, establish and maintain communication, coordination and mutual benefit relationship with suppliers, improve the willingness and satisfaction of suppliers.

-Through supplier management, monitor and control the supplier's supply, quality, time, cost and other indicators to improve supplier performance and efficiency.

4. The Substitute

Alternatives are products or services in other industries that can meet the same or similar needs of customers, and they have a potential impact on the competitiveness of the enterprise because they can attract customers to other markets by providing higher cost performance, better experience, more functions, etc. The threat level of the replacement depends on the following factors:

-The price relative advantage of the substitute: the lower the price of the substitute, the greater the threat.

-The relative advantage of the performance of the substitute: the higher the performance of the substitute, the greater the threat.

-Replacement conversion cost: The lower the cost for customers to switch to replacements, the greater the threat.

-The degree of substitution of the substitute: The higher the degree to which the substitute can meet customer needs, the greater the threat.

There are several ways to identify replacements:

-Through customer needs analysis, determine the customer's core needs and additional needs, understand customer expectations and satisfaction.

-Through market research, understand the development of other industries, find potential alternative products or services.

-Through competitive intelligence, collect information about the alternative's products, prices, quality, services, channels, marketing strategies, etc., and analyze the advantages and disadvantages and strategic intentions of the alternative.

-Through substitute analysis, evaluate the degree of satisfaction of substitutes to customer needs, and determine the threat level and coping strategies of substitutes.

5. Potential Entrants

Potential entrants are firms that are willing and able to enter an industry and have a future impact on their competitiveness because they can increase their competitors and competition in the industry by providing new products or services, adopting new technologies or models, and using new resources or channels. The difficulty of entry for potential entrants depends on the following factors:

-Barriers to entry in the industry: The higher the barrier to entry, the more difficult it is to enter.

-Reaction intensity in the industry: the stronger the reaction of existing competitors, the more difficult it is to enter.

-Policies and regulations in the industry: the stricter the policies and regulations, the more difficult it is to enter.

-Economic scale in the industry: the larger the economic scale, the less difficult it is to enter.

There are several ways to identify potential entrants:

-Through industry analysis, determine the attractiveness and barriers of the industry, and understand the development space and potential of the industry.

-Through market analysis, determine the demand and supply of the market, understand the saturation and growth rate of the market.

-Identify technological developments and innovations and understand technological change and impact through technical analysis.

-Through resource analysis, determine the acquisition and utilization of resources, understand the scarcity and value of resources.

3. Competitor Research Cases

In order to better illustrate the practice and value of competitor research, this paper combines the specific cases of Shangpu consulting service customers, and shows the process and results of competitor research from the perspective of five categories.

1. The case of industrial competitors

A household appliance enterprise (hereinafter referred to as enterprise A) is one of the largest refrigerator manufacturers in China. Its products are characterized by high-end, intelligent and energy-saving, and occupy a leading position in the domestic market. However, in recent years, enterprise A has faced strong competition from home and abroad, and its market share and profit margin have declined. In order to enhance their competitiveness, Enterprise A commissioned Shangpu Consulting to conduct a survey of industry competitors.

Through market research, Shangpu Consulting has learned about the scale, structure, distribution and share of China's refrigerator market, and has determined that the main competitors of A enterprise are as follows:

-B enterprise: one of the largest household appliance groups in China, its refrigerator products are characterized by low-end, economical and practical, occupying the largest share of the domestic market, mainly for low-and middle-income consumers.

-C enterprise: one of the internationally renowned home appliance brands, its refrigerator products are characterized by high-end, fashion and quality, occupying the high-end share of the domestic market, mainly for high-income consumers.

-D enterprise: one of the most innovative home appliance enterprises in China. Its refrigerator products are characterized by intelligence, personality and function, occupying a rapidly growing share of the domestic market, mainly for young consumers.

Through industry associations, professional media, exhibitions, forums and other channels, Shangpu Consulting has obtained industry trends, trends, policies, standards and other information, and found the following important changes:

-The growth rate of the industry has slowed down, the saturation of the market has increased, and the intensity of competition has intensified.

-Technological innovation in the industry is accelerating, product replacement in the market is rapid, and the degree of competitive differentiation is increasing.

-The environmental protection requirements of the industry have increased, the market's awareness of energy conservation and emission reduction has increased, and the degree of social responsibility for competition has increased.

Through customer research, Shangpu Consulting understands the customer's needs, preferences, satisfaction, loyalty, etc., identifies the customer's alternative choices and the advantages and disadvantages of competitors, and draws the followingConclusion：

-The needs of customers are becoming more and more diversified. They not only pay attention to the function and performance of the refrigerator, but also pay attention to the appearance and experience of the refrigerator. They have high expectations for the personalization and intelligence of the refrigerator.

-Customer preferences are becoming more and more differentiated. Different consumers have different purchase motivations and decision-making factors, and have different degrees of emphasis on the brand, price, quality, and service of refrigerators.

-Customer satisfaction is becoming more and more difficult to improve. Due to the transparency of information and fierce competition in the market, customers have higher and higher requirements for refrigerators and are more and more sensitive to the shortcomings of refrigerators.

-Customer loyalty is becoming more and more difficult to maintain. Due to product upgrades and alternative options in the market, customers are more and more willing to replace refrigerators, and their brand loyalty to refrigerators is getting lower and lower.

Through competitor research, Shangpu Consulting collected information on competitors' products, prices, quality, services, channels, marketing strategies, etc., analyzed competitors' strategic intentions and behavior patterns, and came up with the following.Conclusion：

-The strategic intent of Company B is to capture a large share of the domestic market through economies of scale and cost leadership, while increasing its influence in the international market through overseas expansion. Its behavior model is to attract low-end customers through low-price strategies and extensive distribution, while attracting high-end customers through product innovation and brand enhancement.

-C's strategic intention is to occupy the high-end share of the domestic market through brand advantages and quality leadership, and at the same time increase the penetration rate of the domestic market through differentiation and segmentation. Its behavior model is to attract high-end customers through high-price strategies and precision marketing, while enhancing customer loyalty through service innovation and customer relationships.

The strategic intention of-D enterprise is to occupy the rapidly growing share of the domestic market through technological innovation and functional leadership, and at the same time enhance the competitiveness of the domestic market through model innovation and win-win cooperation. Its behavior model is to attract young customers through mid-price strategies and Internet channels, and at the same time improve customer experience through personalization and intelligence.

Based on the above research results, Shangpu Consulting has put forward the following suggestions for Enterprise A:

-A enterprise should adhere to its own high-end, intelligent and energy-saving product characteristics, consolidate its leading position in the domestic market, and expand its influence in the international market through internationalization and diversification.

-A company should strengthen its own technological innovation and product updates to meet the diverse and personalized needs of customers, and at the same time improve customer preferences and satisfaction through appearance innovation and experience innovation.

-A enterprises should optimize their own pricing strategy and marketing strategy, according to different consumers and markets, formulate reasonable prices and promotions, and at the same time through channel innovation and social media, improve customer awareness and participation.

-A companies should improve their service quality and customer relationships, improve their products and services based on customer feedback and suggestions, and at the same time enhance customer loyalty and lifetime value through loyalty programs and value-added services.