Purpose of 1. Competitor Analysis

The essence of competitor analysis is to understand the competition. The purpose of competitor analysis is the following:

Find the opponent's way to success (the core factor behind success)

Analyze the competitive strategies of competitors

Finding a competitor's strategic weakness (macro view)

Analyze the mental point of consumers occupied by competitors.

Looking for Differentiation Possibilities

Find your own breakthrough point in the industry

Through competitor analysis, enterprises can clearly understand their competitive environment, find their own advantages and disadvantages, find their own positioning and differentiation, formulate appropriate competitive strategies, and improve competitiveness and market share.

2. methods of competitor analysis

There are a variety of methods of competitor analysis, and this article focuses on the following four:

Michael Porter's Competitive Strategic Framework

4P Analysis

SWOT analysis

Competitor Matrix

1. Michael Porter's Competitive Strategy Framework

Michael Porter, a well-known master of strategic management, proposed a competitive strategy framework that divides competition into five categories: industrial competitors, buyers, suppliers, potential rivals and substitutes, as shown in Figure 1.

Industrial competitor: refers to other companies that sell the same or similar products in the same market and are direct competitors. For example, Pepsi and Coca-Cola, Champ Consulting and other consulting companies, etc.

Buyer: refers to the consumer or customer whose demand, preference, purchasing power and bargaining power for the product will affect the sales and profits of the enterprise. For example, consumer demand and taste for milk tea, customer budget and expectations for consulting services, etc.

Supplier: refers to other companies or individuals that provide raw materials, equipment, manpower, capital and other factors of production for the enterprise, and their supply of quantity, quality, price and stability will affect the cost and efficiency of the enterprise. For example, raw material suppliers of milk tea, talent recruitment channels of consulting companies, etc.

Potential rivals: other companies or individuals who have the ability or willingness to enter the market, who will increase competitive pressure on the market, divide market share and reduce market profits. For example, a new milk tea shop, a new consulting company, etc.

Substitute: refers to other products or services that can meet the same or similar needs of consumers. They will reduce consumers' demand for the product and affect the sales and profits of the enterprise. For example, takeout and instant noodles have replaced restaurants, mobile phones and cameras have replaced cameras, etc.

By analyzing these five competitive forces, enterprises can understand their own industry structure and competitive situation, evaluate their competitive advantages and disadvantages, and formulate corresponding competitive strategies.

4P Analysis

4P analysis refers to the analysis of competitors' marketing strategies from four aspects: product (Product), price (Price), channel (Place) and promotion (Promotion), as shown in Figure 2.

Product: refers to the characteristics, functions, quality, brand, packaging, after-sales, etc. of the products or services provided by competitors. For example, the taste of milk tea, cup type, ingredients, brand, take-out packaging, return policy, etc.

Price: Refers to the competitor's pricing strategy, discount policy, payment method, etc. for the product or service. For example, the price of a single cup of milk tea, package price, member price, coupons, points exchange, online payment, etc.

Channel: refers to the channels through which competitors distribute products or services to consumers, including physical stores, online stores, agents, distributors, etc. For example, the number of milk tea stores, location, size, decoration, online ordering, take-out distribution, etc.

Promotion: Refers to the ways in which competitors advertise and promote products or services, including advertising, public relations, sales promotion, direct sales, online marketing, etc. For example, TV advertisements for milk tea, microblog accounts, buy one get 1. membership cards, WeChat applets, etc.

Through 4P analysis, enterprises can understand the marketing mix of competitors, find out the advantages and disadvantages of competitors, and find their own differentiation and competitiveness.

3. SWOT Analysis

SWOT analysis refers to the analysis of the internal and external environment of competitors in terms of strengths (Strengths), weaknesses (Weaknesses), opportunities (Opportunities) and threats (Threats).

Advantage: refers to the ability of a competitor to surpass its competitors, or to something unique to the company that can improve the competitiveness of the company. For example, competitors' brand awareness, technological innovation, customer loyalty, cost control, etc.

Disadvantage: something that a competitor lacks or does poorly, or a condition that puts the company at a disadvantage. For example, competitors' product quality, service level, market penetration, financial status, etc.

Opportunity: A factor in the external environment in which a competitor is located that is conducive to its development, or a situation that is likely to bring benefits. For example, the market demand of competitors, policy support, technological progress, social changes, etc.

Threat: A factor in the external environment in which a competitor operates that is not conducive to its development, or a situation that is likely to result in a loss. For example, new entrants to competitors, substitutes, legal risks, increased competition, etc.

Through SWOT analysis, enterprises can understand the strengths and weaknesses of competitors, as well as the opportunities and threats of the external environment, so as to formulate corresponding coping strategies.

4. Competitor Matrix

The competitor matrix is a table used to compare the performance of oneself and competitors in various aspects.

The competitor matrix is constructed as follows:

Identify competitors: Choose the main competitors who compete with you in the same market or the same market segment, generally no more than five.

Determine the evaluation index: select the index that can reflect the core competitiveness of competitors, generally no more than ten, which can be selected from the aspects of product, price, channel, promotion, brand, quality, service, etc.

Collect data: Collect relevant data of competitors through various channels, including official website, social media, market research, customer feedback, industry reports, etc.

Fill in the matrix: According to the data, score yourself and your competitors on each indicator. Generally, a scoring standard of 1-5 points is used, with 1 point indicating the worst and 5 points indicating the best.

Analysis results: According to the matrix, analyze the advantages and disadvantages of yourself and your competitors, find out your own differentiation and competitiveness, and formulate corresponding competitive strategies.

Through the competitor matrix, companies can intuitively compare their own and competitors' performance in all aspects, discover their own strengths and weaknesses, find their own positioning and differentiation, and formulate appropriate competitive strategies.

Steps to 3. competitor analysis

The steps of competitor analysis can be summarized as the following five:

Identify competitors: Identify your direct and indirect competitors based on market segmentation and scope of competition, and generally select 3-5 competitors for analysis.

Collect information: Collect relevant information about competitors through various channels, including products, prices, channels, promotions, brands, quality, services, strategies, goals, resources, capabilities, strengths, weaknesses, opportunities, threats, etc.

Analysis of information: based on the information collected, the use of competitor analysis methods, such as Porter's competitive strategy framework, 4P analysis, SWOT analysis, competitor matrix, etc., to analyze the strengths and weaknesses of competitors, strategies and weaknesses.

Forecast trends: based on the results of the analysis, predict the future trends of competitors, including changes in products, prices, channels, promotions, brands, quality, services, strategies, goals, etc., as well as their impact on themselves.

Formulate strategies: According to the predicted trends, formulate corresponding competitive strategies, including attack strategies, defense strategies, cooperation strategies, avoidance strategies, etc., as well as specific action plans.

Through the steps of competitor analysis, enterprises can systematically understand their competitive environment, formulate effective competitive strategies, and improve competitiveness and market share.

Tools 4. Competitor Analysis

There are a variety of tools for competitor analysis, and this article focuses on the following three:

Competitor analysis template: refers to a form used to collect and organize competitor information, which can be filled in according to different dimensions and indicators.

Competitor analysis software: refers to a software used to automate the collection and analysis of competitor information, which can obtain competitor data from websites, social media, search engines, advertising platforms and other channels.

Competitor analysis report: refers to a document used to summarize and present the results of competitor analysis, which can be written according to different purposes and audiences.

With the tools of competitor analysis, companies can more easily collect and analyze competitor information, more clearly present and communicate the results of competitor analysis, and more effectively develop and execute competitive strategies.