Definition and significance of competitor analysis

Competitor analysis refers to the systematic collection, collation, analysis and evaluation of existing or potential competitors in the same market or industry to understand the strategic objectives, resource capabilities, behavior patterns, strengths and weaknesses of competitors, so as to determine their competitive position and competitive strategy in the market. The significance of competitor analysis is mainly reflected in the following aspects:

Help enterprises to identify and predict the strategic intentions and actions of competitors, as well as their impact and threats to themselves, so as to do a good job in response and prevention;

Help enterprises to find and grasp the advantages and disadvantages of competitors, as well as the opportunities and challenges they face, so as to find their own differentiation and optimization points;

Help enterprises to compare and evaluate their relative advantages and disadvantages with competitors, as well as their competitiveness and attractiveness in the market, so as to formulate and adjust their own competitive strategies and action plans;

Help companies learn from the successful experiences and lessons of competitors, as well as their best practices in products, technologies, services, and innovations, so as to enhance their core competitiveness and market performance.

Limitations and deficiencies of competitor analysis

Although competitor analysis plays an important role and value in the strategic planning and execution of enterprises, there are some limitations and deficiencies in the actual operation process, mainly in the following aspects:

Inaccurate definition and identification of competitors

The definition and identification of competitors is the first and most critical step in competitor analysis, which determines the object and scope of the analysis, as well as the focus and direction of the analysis. However, in the real market environment, the definition and identification of competitors is not an easy task, because the type and number of competitors are diverse, and with the change and development of the market, the composition and characteristics of competitors will also change. If an enterprise has deviations or omissions in the definition and identification of competitors, it may lead to too narrow or too wide the scope of the analysis object, ignoring potential competitive threats or opportunities, thus affecting the validity and accuracy of the analysis.

For example, when providing competitor analysis services for an automobile manufacturer, Shangpu Consulting only pays attention to the direct competitors of the enterprise in the same market segment, while ignoring the indirect competitors from other market segments or other industries, such as new energy vehicles, shared cars, self-driving cars, etc. Although these competitors are not the current competitors of the enterprise, however, it may become the future competitor of the enterprise, which will cause great impact and challenge. Therefore, in its later improvements, Champ Consulting has expanded the scope of the definition and identification of competitors to include those with alternative, complementary or cross-border competitors, as well as those with potential or possibilities, thus making the analysis more comprehensive and in-depth.

Inadequate collection and processing of competitor information

The collection and processing of competitor information is the second and most fundamental step in competitor analysis, which determines the data and material analyzed, as well as the quality and reliability of the analysis. However, in the real market environment, the collection and processing of competitors' information is also a difficult thing, because competitors' information is complex, and with the passage of time, competitors' information will also change. If an enterprise is missing or wrong in the collection and processing of competitors' information, it may lead to incomplete or inaccurate analysis results, which cannot reflect the real situation and dynamic changes of competitors, thus affecting the validity and accuracy of the analysis.

For example, when providing competitor analysis services for an e-commerce platform, Shangpu Consulting only relies on public information sources, such as official websites, news reports, financial reports, etc., while ignoring non-public information sources, such as customer feedback, employee evaluation, social media, etc. Although these information sources are not official, they can reflect the internal situation and external evaluation of competitors, this provides richer and more authentic information. As a result, Champ Consulting's late improvements have added channels and methods for competitors' information collection and processing, including those that are informal, unstructured, and non-quantitative, as well as those that are dynamic, real-time, and updated, to make the analysis more complete and accurate.

Competitor analysis methods and tools are not applicable

Competitor analysis methods and tools are the third and most central step in competitor analysis, which determines the process and form of analysis, as well as the depth and breadth of the analysis. However, in the real market environment, the analysis methods and tools of competitors are also a complex matter, because the characteristics and behavior of competitors are multidimensional, and as the market changes and develops, the analysis methods and tools of competitors also need to be constantly updated and innovated. If an enterprise is inappropriate or backward in the analysis methods and tools of its competitors, it may lead to an increase in the complexity and difficulty of the analysis process and the inability to extract the core competencies and weaknesses of its competitors, thus affecting the effectiveness and accuracy of the analysis.

For example, when providing competitor analysis services for a restaurant chain brand, Shangpu Consulting only uses traditional competitor analysis methods and tools, such as SWOT analysis, Porter's Five Forces Model, competition map, etc., while ignoring emerging competitor analysis methods and tools, such as data analysis, artificial intelligence, social network analysis, etc., although these methods and tools are not specifically aimed at competitor analysis, however, it can dig out the hidden characteristics and behaviors of competitors from a large amount of data and information, thus providing more profound and detailed analysis. Therefore, in its later improvements, Champu Consulting has incorporated the characteristics and needs of competitor analysis and introduced some novel and advanced competitor analysis methods and tools, as well as some customized and innovative competitor analysis methods and tools, to make the analysis more applicable and cutting-edge.

Inadequate application and evaluation of competitor analysis results

The application and evaluation of the results of a competitor's analysis is the fourth and final step in competitor analysis, which determines the outcome and effectiveness of the analysis, as well as the value and significance of the analysis. However, in the real market environment, the application and evaluation of competitors' analysis results is also a difficult thing, because competitors' analysis results are abstract, and as the market changes and develops, competitors' analysis results also need to be constantly adjusted and updated. If the enterprise is not sufficient or timely in the application and evaluation of the analysis results of competitors, the value and effect of the analysis results may not be obvious, and it cannot provide effective support and guidance for the strategic decision-making of the enterprise, thus affecting the effectiveness and accuracy of the analysis.

For example, when providing competitor analysis services for a clothing brand, Shangpu Consulting Company only provides competitor analysis reports, but does not provide competitor analysis suggestions and action plans, nor does it regularly track and evaluate competitor analysis results, which leads to the enterprise's inability to formulate and implement its own competitive strategy according to competitor analysis results, nor can they adjust and optimize their competitive strategies based on market changes and feedback, thus making the results of competitor analysis wasted. Therefore, in the later improvement, Shangpu Consulting Company increased the content and frequency of the application and evaluation of competitors' analysis results, including the analysis suggestions and action plans of those competitors with pertinence and operability, as well as the tracking and evaluation of the analysis results of those competitors with objectivity and effectiveness, so as to make the analysis more adequate and timely.

Competitor analysis improvements and enhancements

Based on the limitations and shortcomings of competitor analysis, Champu Consulting has taken the following measures and recommendations for improvement and enhancement in the process of providing competitor analysis services to its clients:

In terms of the definition and identification of competitors, Shangpu Consulting Company suggests that customers adopt a multi-dimensional and multi-level approach to define and identify competitors from different angles and dimensions, such as products, markets, technologies, resources, culture, etc., and define and identify competitors from different levels, such as existing, potential, alternative, complementary, cross-border, etc, this makes the definition and identification of competitors more comprehensive and accurate.

In terms of the collection and processing of competitors' information, Shangpu Consulting Company recommends that customers adopt multi-channel and multi-method methods to collect and obtain competitors' information from different channels and sources, such as public, non-public, formal, informal, etc., and process and analyze competitors' information from different methods and technologies, such as structured, unstructured, quantitative, qualitative, etc, so that the competitor's information collection and processing more fully and accurately.

In terms of the analysis methods and tools of competitors, Shangpu Consulting Company suggests that customers adopt diversified and innovative methods to analyze and evaluate competitors from different angles and dimensions, such as strategy, resources, behavior, performance, etc. Analyze and evaluate competitors from different methods and tools, such as traditional, emerging, customized, innovative, etc, thus, the analysis methods and tools of competitors are more applicable and cutting-edge.

In the application and evaluation of the analysis results of competitors, Shangpu Consulting Company advises customers to apply and utilize the analysis results of competitors from different aspects and contents, such as formulation, execution, adjustment, optimization, etc., and to apply and utilize the analysis results of competitors from different frequencies and times, such as regular, irregular, real-time, updated, etc., so that the application and evaluation of competitor analysis results more fully and timely.

Conclusion

Competitor analysis is an important part of corporate strategic planning. It can help companies understand their relative advantages and disadvantages in the market, as well as the strategic intentions and actions of competitors. However, there are some limitations and deficiencies in competitor analysis, mainly in terms of inaccurate definition and identification of competitors, inadequate collection and processing of competitor information, inapplicability of competitor analysis methods and tools, and inadequate application and evaluation of competitor analysis results. In order to improve and enhance the practice and effectiveness of competitor analysis, Champ Consulting has taken a number of measures and recommendations in the process of providing competitor analysis services to its clients, such as expanding the scope of the definition and identification of competitors, increasing the channels and methods of competitors' information collection and processing, introducing some novel and advanced competitor analysis methods and tools, and increasing the content and frequency of the application and evaluation of competitors' analysis results, so as to make competitor analysis more comprehensive and in-depth, more complete and accurate, more applicable and cutting-edge, more adequate and timely.