Purpose of Competitor Analysis

The purpose of competitor analysis is to help companies develop effective competitive strategies to improve market competitiveness. According to different decision-making needs, the purpose of competitor analysis can be divided into the following categories:

Understand the basic situation of competitors, such as market share, product characteristics, market positioning, marketing strategies, etc., as well as their own similarities and differences;

Evaluate the strengths and weaknesses of competitors, such as core competitiveness, resource capabilities, innovation capabilities, risk tolerance, etc., as well as their threats and opportunities to themselves;

Predict the strategic intentions of competitors, such as development goals, strategic directions, strategic priorities, strategic changes, etc., as well as their own impact and response;

Analyze competitors' action plans, such as product development, market expansion, price adjustment, promotional activities, etc., as well as their own challenges and responses;

Identify competitors' reaction patterns, such as sensitivity to market changes, tolerance to competitive pressures, choice and implementation of competitive strategies, and their own constraints and responses.

Depending on the purpose, the content and dimensions of competitor analysis will vary, and companies need to choose the appropriate content and dimensions of analysis based on their own decision-making needs to avoid over-generalization or over-refinement in order to improve the pertinence and effectiveness of the analysis.

Content of Competitor Analysis

The content of competitor analysis refers to the object and scope of the analysis, including the selection of competitors and the determination of the dimensions of the analysis. The content of competitor analysis needs to be dynamically adjusted and updated according to the changes in the market environment to adapt to the new competitive situation.

Choice of competitors

Competitor selection refers to determining the scope and number of competitors analyzed and is the first step in competitor analysis. Competitor selection needs to consider the following factors:

Definition of competitor: A competitor is an enterprise that provides the same or similar products or services in the same market, meets the same or similar customer needs, and has a direct or indirect competitive relationship with itself. Competitors can be divided into the following categories:

Direct competitor: An enterprise that provides the same or very similar products or services in the same market, meets the same or very similar customer needs, and has the most direct competitive relationship with itself. For example, Champ Consulting's direct competitors may be other companies that provide similar consulting services, such as Huasheng Consulting and Zhilian Consulting.

Indirect competitor: An enterprise that provides different but related products or services in the same market, meets different but related customer needs, and has a certain competitive relationship with itself. For example, Champ Consulting's indirect competitors may be companies that provide other types of consulting services, such as Deloitte and PricewaterhouseCoopers.

Potential competitor: refers to an enterprise that has not yet provided the same or similar products or services in the same market, but has the ability and willingness to enter the market and form a competitive relationship with itself. For example, potential competitors of Shangpu Consulting Company may be some enterprises with strength and resources, such as Alibaba and Tencent.

Alternative competitor: refers to an enterprise that provides different but replaceable products or services in different markets, meets different but replaceable customer needs, and has an alternative competitive relationship with itself. For example, alternative competitors to Champ Consulting may be platforms that provide online education, training, consulting and other services, such as NetEase Cloud Classroom and Zhihu.

The importance of competitors: the importance of competitors refers to the degree of influence of competitors on themselves, including the competitor's market share, growth rate, competitiveness, threat, etc. The importance of competitors can be assessed in several ways:

Market share analysis: Market share refers to the proportion of competitors in the market, reflecting the market position and influence of competitors. Generally speaking, the higher the market share, the higher the importance of competitors, which need to be focused and analyzed.

Growth rate analysis: Growth rate refers to the change of competitor's sales or market share in a certain period of time, reflecting the development speed and potential of competitors. Generally speaking, the higher the growth rate, the higher the importance of competitors, which requires close attention and analysis.

Competitiveness analysis: Competitiveness refers to the advantages or disadvantages of competitors compared with other competitors in the market, reflecting the strength and level of competitors. Competitiveness can be assessed in several ways:

SWOT analysis: SWOT analysis refers to the analysis of competitors' strengths (Strengths), weaknesses (Weaknesses), opportunities (Opportunities) and threats (Threats) to determine the internal conditions and external environment of competitors.

Among them, SO strategy refers to the use of their own advantages, seize external opportunities, improve competitiveness; WO strategy refers to overcome their own disadvantages, seize external opportunities, improve competitiveness; ST strategy refers to the use of their own advantages, deal with external threats, reduce risk; WT strategy refers to overcome their own disadvantages, deal with external threats, reduce risk. Generally speaking, SWOT analysis can help enterprises understand the advantages and disadvantages of competitors, as well as their own opportunities and threats, so as to formulate corresponding competitive strategies.

Five Forces Analysis: Five Forces Analysis refers to the analysis of the competitive structure and competitive strength of the industry in which competitors are located, including competitors in the industry, potential new entrants, threats of substitutes, bargaining power of suppliers and bargaining power of buyers.

Among them, competitors in the industry refer to enterprises that provide the same or similar products or services in the same industry and have direct competition with themselves; potential new entrants refer to enterprises that have the ability and willingness to enter the industry and form competitive relations with themselves; the threat of substitution refers to providing different but replaceable products or services in different industries, enterprises that have an alternative competitive relationship with themselves; the bargaining power of suppliers refers to the influence of enterprises or individuals that provide raw materials, equipment, manpower and other resources on themselves; the bargaining power of buyers refers to the influence of enterprises or individuals that purchase products or services from themselves. In general, five forces analysis can help companies understand the competitive environment of the industry in which their competitors are located and their impact on themselves, so as to formulate corresponding competitive strategies.

VRIO analysis: VRIO analysis refers to the analysis of whether competitors' resources and capabilities have value (Value), scarcity (Rarity), non-replicability (Inimitability) and organization (Organization) to determine the core competitiveness of competitors.

resource/capability value scarcity non-replicable organizational competitiveness

Among them, value refers to whether resources or capabilities can create value for enterprises, such as increasing income, reducing costs, increasing satisfaction, etc. Scarcity refers to whether resources or capabilities are scarce, that is, whether only a few enterprises have them. Non-replicability refers to whether resources or capabilities are non-replicable, that is, whether they are difficult to be imitated or acquired by other enterprises. Organization refers to whether resources or capabilities are organized, that is, whether it can be effectively used and managed by the enterprise. Generally speaking, VRIO analysis can help enterprises understand the core competitiveness of competitors, as well as their own advantages or disadvantages, so as to formulate corresponding competitive strategies.

Competitor's analysis dimension: Competitor's analysis dimension refers to the angle and aspect of analysis, including competitor's strategy, finance, market, product, technology, manpower, culture, etc. Competitor analysis dimensions need to be selected according to different purposes and content, in order to improve the depth and breadth of analysis. The following is an introduction to some commonly used analysis dimensions:

Strategic analysis: Strategic analysis refers to the analysis of competitors' strategies, including competitors' development goals, strategic directions, strategic priorities, strategic changes, etc., as well as their own impact and response. Strategic analysis can be done in the following ways:

Strategic map analysis: Strategic map analysis refers to the decomposition of competitors' strategies into different levels, such as vision, mission, goals, strategies, action plans, etc., and the relationship between them to form a clear strategic map.

Among them, the vision refers to the long-term ideal state of competitors, such as becoming an industry leader, global development, etc.; the mission refers to the significance and value of the existence of competitors, such as providing customers with the best service and creating the greatest value for the society; the goal refers to the specific, quantifiable, measurable and time-bound results of competitors, such as achieving a certain market share, growth rate, profit margin, etc.; strategy refers to the methods and ways of competitors to achieve their goals, such as through innovation, expansion, cooperation, etc.; action plan refers to the specific, operational, responsible and resourceful activities of competitors to implement strategies, such as developing new products, expanding new markets, establishing relationships with partners, etc. In general, strategic map analysis can help companies understand the strategic logic and structure of competitors, as well as their impact and response on themselves. -Strategic group analysis: Strategic group analysis refers to the division of competitors into different strategic groups based on their similarities or differences in the market to form a strategic group map.

Among them, the strategic group refers to the collection of competitors with similar strategic characteristics in the market, such as product quality, price, service, innovation, etc., and the strategic group map refers to the use of two or more strategic dimensions to position and display the strategic group of competitors in a two-dimensional or multi-dimensional space. Generally speaking, strategic group analysis can help enterprises understand the strategic differences and similarities of competitors, as well as their competitive pressures and opportunities, so as to formulate corresponding competitive strategies.

Strategic Clock Analysis: Strategic Clock Analysis refers to the division of competitors into different strategic options based on their combination of price and added value in the market to form a strategic clock chart.

Among them, strategic options refer to the combination of different prices and added values adopted by competitors in the market, such as low price/low added value, low price/high added value, high price/high added value, etc.; strategic clock chart refers to the positioning and display of competitors' strategic options in a bell-shaped space with two dimensions of price and added value. In general, strategic clock analysis can help companies understand the price and value-added strategies of competitors, as well as their competitive advantages and disadvantages to themselves, so as to formulate corresponding competitive strategies.

Financial analysis: Financial analysis refers to the analysis of the financial position of competitors, including their financial statements, financial ratios, financial forecasts, etc., as well as their own impact and response. Financial analysis can be done in the following ways:

Financial Statement Analysis: Financial Statement Analysis refers to the analysis of competitors' financial statements, including balance sheets, profit statements, cash flow statements, etc., to understand the financial position and changes of competitors. In general, financial statement analysis can help companies understand the financial indicators of competitors' assets, liabilities, owner's equity, income, expenses, cash flows, etc., as well as their own impact and response.

Financial ratio analysis: Financial ratio analysis refers to the analysis of competitors' financial ratios, including profitability, solvency, operational capacity, growth capacity, etc., to assess the financial performance and level of competitors. In general, financial ratio analysis can help companies understand the profitability, solvency, operational capacity, growth capacity and other financial ratios of competitors, as well as their own strengths or weaknesses, so as to develop appropriate competitive strategies.

Financial Forecast Analysis: Financial forecast analysis refers to the analysis of competitors' financial forecasts, including the expected value of competitors' income, expenses, profits, cash flows, etc., as well as their impact on themselves and their response. Financial forecast analysis can be carried out in the following ways:

Historical trend analysis: Historical trend analysis refers to the analysis of the trend of competitors' financial indicators based on the historical data of competitors to predict the future value of competitors' financial indicators. In general, historical trend analysis can help companies understand the changing patterns of competitors' financial indicators, as well as their own impact and response.

Factor analysis: Factor analysis refers to the analysis of the influence factors of competitors' financial indicators based on the correlation between competitors' financial indicators and other factors to predict the future value of competitors' financial indicators. In general, factor analysis can help companies understand the impact of competitors' financial indicators, as well as their own impact and response.

Scenario analysis: Scenario analysis refers to the analysis of the uncertainty of competitors' financial indicators based on the possible values of competitors' financial indicators in different scenarios to predict the future value of competitors' financial indicators. In general, scenario analysis can help companies understand the uncertainty of competitors' financial indicators, as well as their own impact and response.

Market analysis: Market analysis refers to the analysis of competitors' market conditions, including competitors' market share, market growth rate, market structure, market demand, market segmentation, etc., as well as their own impact and response. Market analysis can be done in the following ways:

Market share analysis: Market share analysis refers to the analysis of the proportion of competitors in the market, reflecting the market position and influence of competitors. Generally speaking, market share analysis can help enterprises understand the market share of competitors, as well as their own competitive pressure and opportunities, so as to formulate corresponding competitive strategies.

Market growth rate analysis: Market growth rate analysis refers to the analysis of the development speed and potential of the market, reflecting the attractiveness and competitiveness of the market. Generally speaking, market growth rate analysis can help companies understand the growth rate of the market, as well as its opportunities and threats to themselves, so as to formulate corresponding competitive strategies.

Market structure analysis: Market structure analysis refers to the analysis of the composition and characteristics of the market, including the size, concentration, distribution, stability, diversity, etc. of the market, as well as its own impact and response. Market structure analysis can be carried out in the following ways:

Market size analysis: Market size analysis refers to the analysis of the overall size of the market, that is, the total sales or total demand of the market, reflecting the capacity and potential of the market. In general, market size analysis can help companies understand the size of the market, as well as its own opportunities and challenges, so as to develop corresponding competitive strategies.

Market concentration analysis: Market concentration analysis refers to the analysis of the degree of competition in the market, that is, the number and size of competitors in the market, reflecting the fierce competition and difficulty of the market. In general, market concentration analysis can help companies understand the concentration of the market, as well as its own competitive pressures and opportunities, so as to develop appropriate competitive strategies.

Market distribution analysis: Market distribution analysis refers to the analysis of the geographical distribution of the market, that is, the distribution of the market in different regions, countries, cities, etc., reflecting the regional and differences of the market. In general, market distribution analysis can help companies understand the distribution of the market, as well as its own opportunities and challenges, so as to develop appropriate competitive strategies.

Market stability analysis: Market stability analysis refers to the analysis of the degree of change in the market, that is, the market sales or demand fluctuations in a certain period of time, reflecting the stability and predictability of the market. In general, market stability analysis can help companies understand the stability of the market, as well as its own risks and opportunities, so as to develop appropriate competitive strategies.

Market diversity analysis: Market diversity analysis refers to the analysis of market diversity, that is, the differences and diversity of customer needs, preferences, behaviors, etc. in the market, reflecting the complexity and segmentation of the market. In general, market diversity analysis can help companies understand the diversity of the market, as well as its own opportunities and challenges, so as to formulate corresponding competitive strategies.

Market demand analysis: Market demand analysis refers to the analysis of market demand conditions, including total market demand, effective demand, potential demand, unmet demand, etc., as well as its impact on itself and response. Generally speaking, market demand analysis can help enterprises understand the market demand situation, as well as its own opportunities and challenges, so as to formulate corresponding competitive strategies.

Market segmentation analysis: Market segmentation analysis refers to the analysis of market segmentation, that is, customers in the market according to their different needs, preferences, behavior, etc., divided into different market segments, in order to form a market segmentation map. In general, market segmentation analysis can help companies understand the market segmentation, as well as its own opportunities and challenges, so as to develop appropriate competitive strategies.

Product analysis: Product analysis refers to the analysis of competitors' product conditions, including competitors' product characteristics, product mix, product life cycle, product innovation, etc., as well as their own impact and response. Product analysis can be done in the following ways:

Product feature analysis: Product feature analysis refers to the analysis of the characteristics of competitors' products, including product function, performance, quality, design, brand, price, etc., as well as its own impact and response. In general, product feature analysis can help companies understand the characteristics of competitors' products and their advantages or disadvantages to themselves, so as to formulate corresponding competitive strategies.

Product portfolio analysis: Product portfolio analysis refers to the analysis of competitors' product combinations, including product types, quantities, proportions, relationships, etc., as well as their own impact and response.

Boston matrix analysis: Boston matrix analysis refers to the combination of competitors' products into different product types according to their market share and market growth rate in the market to form a Boston matrix chart. Among them, product type refers to the combination of market share and market growth rate of competitors' products in the market, such as star products, problem products, cash cow products, thin dog products, etc. Boston matrix chart refers to positioning and displaying competitors' product types in a four-quadrant space with two dimensions of market share and market growth rate. In general, Boston Matrix analysis can help companies understand the portfolio of competitors' products, as well as their own opportunities and challenges, so as to formulate corresponding competitive strategies.

Ansoff matrix analysis: Ansoff matrix analysis refers to the division of competitors' products into different product strategies according to their existing products and new products in the market, as well as the combination of existing and new markets, to form an Ansoff matrix chart. Among them, product strategy refers to the existing products and new products of competitors' products in the market, as well as the combination of existing markets and new markets, such as market penetration, market development, product development, diversification, etc.; Ansoff matrix refers to the use of existing products and new products, as well as existing markets and new markets, to position and display competitors' product strategies in a four-quadrant space. In general, Ansoff matrix analysis can help companies understand the strategies of competitors' products, as well as their own opportunities and challenges, so as to formulate corresponding competitive strategies.

Product life cycle analysis: Product life cycle analysis refers to the analysis of the life cycle of a competitor's product, I .e. the process from launch to exit from the market, including the introduction period, growth period, maturity period, recession period, etc., as well as its own impact and response. Among them, the product life cycle refers to the process of product from launch to exit the market, including the introduction period, growth period, maturity period, decline period, etc.; product life cycle diagram refers to the use of time and sales two dimensions, the competitor's product life cycle in a curved space to position and display. In general, product life cycle analysis can help companies understand the life cycle of competitors' products, as well as their own opportunities and challenges, so as to formulate corresponding competitive strategies.

Product innovation analysis: Product innovation analysis refers to the analysis of the innovation status of competitors' products, including the type of innovation, degree of innovation, source of innovation, innovation effect, etc. of competitors' products, as well as their own impact and response.

Innovation type analysis: Innovation type analysis refers to the analysis of the types of product innovation of competitors, including product technology innovation, functional innovation, design innovation, brand innovation, service innovation, etc., as well as its own impact and response. Generally speaking, innovation type analysis can help enterprises to understand the types of innovation of competitors' products, as well as their own advantages or disadvantages, so as to formulate corresponding competitive strategies.

Innovation degree analysis: Innovation degree analysis refers to the analysis of the degree of innovation of competitors' products, including basic innovation, improvement innovation, incremental innovation, breakthrough innovation, etc., as well as its own impact and response. In general, the degree of innovation analysis can help companies understand the degree of innovation of competitors' products, as well as their own opportunities and challenges, so as to formulate corresponding competitive strategies.

Innovation source analysis: Innovation source analysis refers to the analysis of the sources of innovation of competitors' products, including internal innovation, external innovation, joint innovation, etc., as well as their own impact and response. Generally speaking, innovation source analysis can help enterprises understand the source of innovation of competitors' products, as well as their own opportunities and challenges, so as to formulate corresponding competitive strategies.

Innovation effect analysis: Innovation effect analysis refers to the analysis of the effect of competitors' product innovation, including the product's market response, market share, profit margin, customer satisfaction, etc., as well as its own impact and response. Generally speaking, innovation effect analysis can help enterprises understand the effect of competitors' product innovation, as well as their own advantages or disadvantages, so as to formulate corresponding competitive strategies.

Technical analysis: Technical analysis refers to the analysis of the technical status of competitors, including the competitor's technical level, technical sources, technical input, technical protection, etc., as well as its own impact and response.

Technical analysis can be done in the following ways:

Technical level analysis: Technical level analysis refers to the analysis of the level of technology of competitors, including the advancement, maturity, reliability, compatibility, etc. of the technology, as well as its impact on itself and response. Generally speaking, technical level analysis can help enterprises understand the technical level of competitors, as well as their own advantages or disadvantages, so as to formulate corresponding competitive strategies.

Technology source analysis: Technology source analysis refers to the analysis of the source of competitors' technology, including the internal source of technology, external sources, joint sources, etc., as well as its impact on itself and response. Generally speaking, technology source analysis can help enterprises understand the source of competitors' technology, as well as their own opportunities and challenges, so as to formulate corresponding competitive strategies.

Technology input analysis: Technology input analysis refers to the analysis of competitors' technology input, including technology research and development costs, research and development personnel, research and development equipment, etc., as well as its own impact and response. In general, technology input analysis can help companies understand their competitors' technology inputs and their strengths or weaknesses to develop competitive strategies accordingly.

Technology protection analysis: Technology protection analysis refers to the analysis of competitors' technology protection, including technology patents, trademarks, copyrights, confidentiality agreements, etc., as well as its impact on itself and response. Generally speaking, technology protection analysis can help enterprises understand the protection of competitors' technology, as well as their own opportunities and challenges, so as to formulate corresponding competitive strategies.

Manpower analysis: Manpower analysis refers to the analysis of the human situation of competitors, including the size of the competitor's manpower, manpower structure, manpower quality, manpower flow, etc., as well as its own impact and response. Manpower analysis can be done in several ways:

Manpower scale analysis: Manpower scale analysis refers to the analysis of the scale of the competitor's manpower, that is, the number of employees of the competitor, reflecting the capacity and potential of the competitor's manpower. In general, manpower scale analysis can help companies understand the scale of competitors' manpower, as well as their own opportunities and challenges, so as to formulate corresponding competitive strategies.

Human structure analysis: Human structure analysis refers to the analysis of the structure of competitors' human resources, I .e. the distribution and proportion of competitors' employees, reflecting the structure and characteristics of competitors' human resources. In general, manpower structure analysis can help companies understand the structure of competitors' manpower and their strengths or weaknesses to themselves, so as to formulate corresponding competitive strategies.

Human quality analysis: Human quality analysis refers to the analysis of the quality of competitors' manpower, that is, the ability and level of competitors' employees, reflecting the quality and level of competitors' manpower. In general, human quality analysis can help companies understand the quality of their competitors' manpower, as well as their own strengths or weaknesses, so as to develop appropriate competitive strategies.

Manpower flow analysis: Manpower flow analysis refers to the analysis of the flow of competitors' manpower, I .e. the inflow and outflow of competitors' employees, reflecting the stability and mobility of competitors' manpower. In general, manpower flow analysis can help companies understand the flow of competitors' manpower, as well as their own opportunities and challenges, so as to formulate corresponding competitive strategies.

Cultural analysis: Cultural analysis refers to the analysis of the cultural situation of competitors, including their cultural values, cultural concepts, cultural atmosphere, cultural influence, etc., as well as their own influence and response. Cultural analysis can be done in several ways:

Cultural value analysis: Cultural value analysis refers to the analysis of the value of the competitor's culture, that is, the core, lasting and universal values embodied in the competitor's culture, reflecting the nature and direction of the competitor's culture. Generally speaking, cultural value analysis can help enterprises understand the value of competitors' culture, as well as its impact on themselves and how to deal with it.

Cultural concept analysis refers to the concept of analyzing the culture of competitors, that is, the basic, guiding and action-oriented concepts embodied in the culture of competitors, reflecting the thoughts and behaviors of the culture of competitors. Generally speaking, cultural concept analysis can help enterprises understand the cultural concept of competitors, as well as its impact on themselves and response.

Cultural atmosphere analysis: Cultural atmosphere analysis refers to the analysis of the atmosphere of the competitor's culture, that is, the internal and external atmosphere and emotions created by the competitor's culture, reflecting the temperament and style of the competitor's culture. Generally speaking, cultural climate analysis can help enterprises understand the cultural atmosphere of competitors, as well as their own impact and response.

Cultural impact analysis: Cultural impact analysis refers to the analysis of the influence of the competitor's culture, that is, the influence of the competitor's culture on itself and the outside, reflecting the role and effect of the competitor's culture. In general, cultural impact analysis can help companies understand the impact of competitors' cultures, as well as their own impact and response.