Why 1. Competitor Analysis is Important

In today's complex and changeable market environment, enterprises are facing challenges from both internal and external aspects. Internal aspects include product quality, cost control, technological innovation and other aspects; external aspects include policies and regulations, social culture, consumer demand and so on. These factors will affect the survival and development of enterprises in the market.

Therefore, companies need to constantly adjust their strategies and make corresponding adjustments according to market changes. This requires a clear and comprehensive understanding of the situation between itself and competitors, and the ability to formulate effective and flexible response strategies.

This is known as competitor analysis.

2. how to conduct competitor analysis

Competitor analysis refers to the collection and collation of information related to oneself or other related enterprises, and the use of appropriate methods for comparative evaluation, in order to reveal their strengths and weaknesses, strategic intent, mode of action and other characteristics, and draw valuable and strong operability and high sustainability and verifiability and implementation of strong and measurable and controllable and can be improved and innovative and strong leadership and can be strong influence and strong cooperation and win-win and can be strong long-term and stable and sustainable development of the competitive advantage and strategic direction.

There are many ways to analyze competitors, but they can generally be divided into the following steps:

Determine the scope and type of competitors. Competitors are not only providers of similar products or services that compete directly with the enterprise, but also providers of substitutes or supplements that compete indirectly with the enterprise, as well as potential entrants or exits that may become future competitors of the enterprise. The type of competitor can be divided according to its similarity to the enterprise and market relationship, for example, it can be divided into primary competitors (enterprises that compete with the enterprise in the same market, the same market segment or the same geographical area), secondary competitors (enterprises that compete with the enterprise in different markets, different market segments or different geographical areas), potential competitors (enterprises that may enter the market or market segment in which the enterprise is located), and indirect competitors (those that provide alternative or complementary effects to the products or services of the enterprise. enterprises), etc.

Collect competitor information. Competitor information can be obtained from a variety of channels and sources, e.g, through public data and reports (such as financial statements, annual reports, industry reports, news reports, etc.), non-public data and reports (such as patents, trademarks, professional consulting agencies, etc.), first-hand data and reports (such as market research, consumer interviews, mysterious customers, etc.), second-hand data and reports (such as competitors' employees, suppliers, distributors, partners, etc.). The purpose of collecting competitors' information is to understand their background (such as history, scale, organizational structure, ownership, culture, etc.), resources (such as capital, talent, technology, brand, etc.), capabilities (such as production, research and development, marketing, service, etc.), strategy (such as goal, positioning, differentiation, growth, competition, cooperation, etc.), behavior (such as product, price, channel, promotion, innovation, reaction, etc.).

Analyze the strengths and weaknesses of competitors. Analyzing the strengths and weaknesses of competitors refers to comparing the information of competitors to find out their strengths and weaknesses relative to the enterprise, as well as the opportunities and threats they may face. There are many ways to analyze the strengths and weaknesses of competitors. For example, SWOT analysis (Strengths,Weaknesses,Opportunities,Threats) can be used, that is, by listing the internal strengths and weaknesses of competitors, as well as external opportunities and threats, to evaluate their comprehensive strength and development trend; VRIO analysis (Value,Rarity,Imitability,Organization) can also be used, that is, by judging whether the resources and capabilities of competitors are valuable, scarce, difficult to imitate and organizational utilization, to evaluate their competitive advantage and sustainability; you can also use value chain analysis (ValueChainAnalysis), that is, by analyzing the value and cost created by competitors in all aspects of products or services (such as raw material procurement, production and processing, logistics and distribution, sales and service, etc.), to assess their efficiency and effectiveness.

Anticipate competitors' strategies and actions. Predicting the strategies and actions of competitors refers to inferring the goals and strategies that competitors may adopt, as well as the possible impacts and results, based on their information and strengths and weaknesses. There are many ways to predict the strategies and actions of competitors. For example, strategic group analysis (StrategicGroupAnalysis) can be used, that is, by dividing competitors into different groups according to their similarities and differences in the market, To analyze the competitive relationship and competitive intensity between them; You can also use competition map analysis (CompetitiveMapAnalysis), that is, by dividing competitors into different regions according to their importance and influence in the market, to analyze the competitive priority and competitive strategy between them, you can also use game theory analysis (GameTheoryAnalysis), that is, by establishing a game model between competitors, to analyze the competitive strategy and competitive results between them.

Case for 3. competitor analysis

To better illustrate how to conduct a competitor analysis, we use a specific case study. Suppose we are a company that provides professional consulting services, called Shangpu Consulting (ShangpuConsulting), our main business is to provide clients with strategic planning, market research, organizational change, human resource management and other consulting services. Our target market is small and medium-sized enterprises in China. Our core competitiveness is our professional team, innovative methods and customer-friendly solutions. We want to conduct a competitor analysis in order to develop a more effective competitive strategy and increase our market share and profitability. We can proceed as follows:

Determine the scope and type of competitors. We first need to determine what our competitors are and what type they belong. We can identify our competitors in the following ways:

Through market research, we understand which other consulting firms our potential and existing clients will consider when choosing consulting services, as well as their evaluations and preferences for these consulting firms.

Through industry reports, we can understand the overall situation of our consulting industry, including market size, market growth, market structure, market trends, etc., as well as the market share, market position and market performance of each consulting company.

Through the above methods, we can determine that our competitors have the following categories:

Major competitors: These are consulting firms that compete with us in the same market, in the same market segment or in the same geographical area, whose business scope, business characteristics and business case are similar or identical to ours, whose market share, market position and market performance are similar or equivalent to ours, and whose customer base, customer needs and customer satisfaction overlap or are the same as ours. For example, our main competitors are:

Huaxia Consulting (HuaxiaConsulting): This is a well-known domestic consulting company established in 1998. It mainly provides consulting services on strategic planning, market research, organizational change, and human resource management for large enterprises and government departments in China. Its business scope covers finance, manufacturing, energy, education, medical and other industries. Its business feature is to provide localized solutions that meet customer needs in combination with China's national conditions and culture. Its business cases include providing consulting services for Bank of China, PetroChina, China Mobile, Tsinghua University, Peking Union Medical College Hospital, etc. Its market share and market position in the domestic consulting industry in a leading position, its market performance in recent years to maintain a steady growth, its customer base is mainly China's large enterprises and government departments, its customer demand is mainly to improve competitiveness and efficiency, its customer satisfaction is higher.

Wisdom Consulting (ZhihuiConsulting): This is a domestic emerging consulting company established in 2008. It mainly provides consulting services on strategic planning, market research, organizational change, and human resource management for small and medium-sized enterprises and private institutions in China. Its business scope involves the Internet, e-commerce, new energy, new media, new education and other fields. Its business feature is to use the latest technologies and methods to provide innovative and forward-looking solutions. Its business cases include Alibaba, Tencent, Didi Chuxing, ByteDance, New Oriental, etc. Its market share and market position in the domestic consulting industry in the upper-middle level, its market performance in recent years has shown rapid growth, its customer base is mainly China's small and medium-sized enterprises and private institutions, its customer demand is mainly to seek change and breakthrough, its customer satisfaction is higher.

Champu Consulting (ShangpuConsulting): This is our own consulting company. We have already introduced it above, so I won't repeat it here.

Secondary competitors: These are consulting firms that compete with us in different markets, different market segments or different geographical regions, whose business scope, business characteristics and business cases are different from or irrelevant to us, whose market share, market position and market performance are significantly different from or incomparable to ours, and whose customer base, customer needs and customer satisfaction are not overlapping or identical to ours. For example, our secondary competitors are:

McKinsey (McKinsey): This is an internationally renowned consulting company founded in 1926. It mainly provides consulting services in strategic planning, market research, organizational change, and human resource management for large companies and government departments around the world. Its business scope covers all industries and fields. Its business feature is to use global vision and resources to provide high-end and professional solutions. Its business cases include providing consulting services for Wal-Mart, Coca-Cola, Google, Apple, United Nations, etc. Its market share and market position are in the leading position in the international consulting industry. Its market performance has maintained steady growth in recent years. Its customer base is mainly large enterprises and government departments around the world. Its customer demand is mainly to improve global competitiveness and influence, and its customer satisfaction is high.

PricewaterhouseCoopers (PwC): This is an internationally renowned consulting company established in 1849. It mainly provides audit, taxation, and consulting services to large enterprises and government departments around the world. Its business scope covers all industries and fields. Its business characteristics are to provide comprehensive and reliable services by combining financial and management expertise. Its business case includes providing services for ExxonMobil, General Electric, Microsoft, Amazon, World Bank, etc. Its market share and market position are in the leading position in the international consulting industry. Its market performance has maintained steady growth in recent years. Its customer base is mainly large enterprises and government departments around the world. Its customer demand is mainly to improve the level and efficiency of finance and management, and its customer satisfaction is high.

Deloitte (Deloitte): This is an internationally renowned consulting company established in 1845. It mainly provides audit, taxation, and consulting services for large companies and government departments around the world. Its business scope covers all industries and fields. Its business feature is to combine risk and innovation capabilities to provide diversified and leading services. Its business cases include providing services for Shell, BMW, Starbucks, Facebook, EU, etc. Its market share and market position are in the leading position in the international consulting industry. Its market performance has maintained steady growth in recent years. Its customer base is mainly large enterprises and government departments around the world. Its customer demand is mainly to improve the ability and effect of risk and innovation, and its customer satisfaction is high.

Potential competitors: These are consulting firms that have the potential to enter our market or market segment, whose scope of business, business characteristics, business cases are different or unrelated to ours, but they have sufficient resources and capabilities, as well as sufficient motivation and opportunity, to pose a threat or challenge to us. For example, our potential competitors are:

Alibaba (Alibaba): This is a well-known domestic Internet company established in 1999. It mainly provides e-commerce, payment, logistics, cloud computing and other services for businesses and consumers around the world. Its business scope involves e-commerce, finance, logistics, entertainment, education and other fields. Its business feature is to use the most extensive platform and network to provide comprehensive and efficient services. Its business cases include Taobao, Tmall, Alipay, Cainiao Network, Youku, etc. Its market share and market position are in the leading position in the domestic Internet industry. Its market performance has maintained steady growth in recent years. Its customer base is mainly global merchants and consumers. Its customer demand is mainly for transactions and payments, and its customer satisfaction is high. Alibaba may become our potential competitor because it has sufficient resources and capabilities, such as technology, data, talents, capital, etc., to carry out consulting business, and it has sufficient motivation and opportunities, such as expanding business scope, Increasing revenue sources, meeting customer needs, etc., to enter our market or market segment.

Tencent (Tencent): This is a well-known domestic Internet company established in 1998. It mainly provides social networking, games, entertainment, cloud computing and other services for users around the world. Its business scope covers social networking, games, entertainment, education, medical and other fields. Its business feature is to use the richest content and applications to provide interesting and useful services. Its business cases include WeChat, QQ, King Glory, Tencent Video, Tencent Music, etc. Its market share and market position are in a leading position in the domestic Internet industry. Its market performance has maintained steady growth in recent years. Its customer base is mainly global Internet users, and its customer needs are mainly for social interaction. And entertainment, its customer satisfaction is high. Tencent may become our potential competitor because it has sufficient resources and capabilities, such as technology, data, talents, capital, etc., to carry out consulting business, and it has sufficient motivation and opportunities, such as expanding business scope, increasing income Sources, meeting customer needs, etc., to enter our market or market segment.

Indirect competitors: These are businesses that provide alternatives or complementary roles to our products or services, whose business scope, business characteristics, and business cases are different or unrelated to ours, but they may affect the choices and decisions of our customers, thereby affecting our market share and profitability. For example, our indirect competitors are:

Training institutions: These are institutions that provide various training courses and certificates to enterprises or individuals. Their business scope involves strategic planning, market research, organizational change, human resource management, etc. Their business characteristics are to improve customers' knowledge and skills by teaching theory and practice. Their business cases include training courses and certificates for various enterprises and individuals. Their market share and market position are in the upper middle level in the domestic training industry. Their market performance has shown rapid growth in recent years. Their customer base is mainly small and medium-sized enterprises and individuals in China. Their customer needs are mainly to improve their own ability and competitiveness, and their customer satisfaction is high. Training institutions are our indirect competitors because the products or services they provide may replace or supplement the consulting services we provide, thereby affecting our clients' choices and decisions.

Book Publishers: These are organizations that publish and sell various consulting-related books. Their business scope involves strategic planning, market research, organizational change, human resource management, etc. Their business feature is to provide rich and authoritative Information and knowledge to improve customer awareness and understanding. Their business cases include publishing and selling various consulting-related books. Their market share and market position are in the upper middle level in the domestic book publishing industry. Their market performance has shown steady growth in recent years. Their customer base is mainly small and medium-sized enterprises and individuals in China. Their customer needs are mainly to obtain information and knowledge, and their customer satisfaction is high. Book publishers are our indirect competitors because they offer products or services that may replace or supplement the consulting services we provide, thereby influencing our clients' choices and decisions.

How 4. develop competitive strategies

Through the above competitor analysis, we can draw the following conclusions:

Our competitive environment is complex and changeable. We face challenges and threats from different types and different degrees of competitors. We need to constantly pay attention to and respond to the dynamics and behaviors of competitors to maintain our competitive advantage and market position.

Our competitive advantage is our professional team, innovative approach and customer-friendly solutions. We need to continuously improve our resources and capabilities to provide higher quality and more valuable consulting services to meet customer needs and expectations.

Our competitive strategy is based on our target market and target customers, as well as the strengths and weaknesses of our competitors and strategic direction, to develop appropriate competitive objectives and competitive actions to achieve our competitive objectives and competitive effectiveness.

Specifically, we can adopt the following competitive strategies:

Differentiation strategy: This is a strategy to attract and retain customers by offering products or services that are different or unique from competitors. We can implement a differentiation strategy in the following ways:

Through in-depth understanding and analysis of customers, we can find out their real needs and pain points, as well as their preferences and expectations, so as to provide them with personalized and customized consulting solutions that are more suitable for them.

Through continuous observation and research on the market, we can find new trends and opportunities in the market, as well as new needs and new problems of customers, so as to provide them with more innovative and forward-looking consulting solutions.

Through continuous learning and improvement, the introduction and application of the latest technology and methods, as well as the best practices and cases, so as to provide customers with more professional and efficient consulting solutions.

Centralization strategy: This is a strategy to increase market share and customer loyalty by focusing on one or several market segments or customer segments. We can implement a centralization strategy in the following ways:

By accurately positioning and dividing market segments or customer segments, we can find out their characteristics and needs, as well as their advantages and potential, so as to provide them with consulting solutions that are more suitable for them.

Through continuous attention and service to market segments or customer segments, establish and maintain long-term cooperative relationship with them, so as to provide them with more satisfactory consulting solutions.

Provide more value-added and value-added services through continuous development and expansion of market segments or customer segments, thereby providing them with more valuable consulting solutions.

Cost leadership strategy: This is a strategy to attract and retain customers by providing the same or similar products or services as competitors, but at a lower cost or higher cost performance. We can implement cost leadership strategies in the following ways:

By optimizing and integrating our own business processes and resource allocation, we reduce unnecessary waste and duplication, thereby reducing our costs and improving our efficiency.

By controlling and ensuring the quality and performance of our products or services, we can avoid unnecessary defects and complaints, thereby improving our reputation and reputation.

By setting and publishing the prices and charges of our products or services in a reasonable and transparent manner, we can avoid unnecessary hidden and additional costs, thereby enhancing our competitiveness and attractiveness.