Identify competitor scope

The first key point of competitor research is to determine the scope of competitors, that is, to identify which companies are our competitors and which are not. This step is the basis for competitor research and the most challenging step, because the scope of competitors is not static, but dynamically adjusted with market changes and enterprise development.

Generally speaking, there are two methods to determine the scope of competitors, one is a market-based method, and the other is a resource-based method. The market-based approach classifies direct and indirect competitors according to the market sector in which the firm is located. Direct competitors refer to companies that provide the same or similar products or services in the same market area. For example, Apple and Samsung are both direct competitors in the smartphone market. Indirect competitors are companies that offer substitutes or supplements in different market segments, for example, Apple and Microsoft are both indirect competitors in the personal computer market. The resource-based approach is to classify potential competitors and non-competitors based on the resources and capabilities that the firm has. Potential competitors refer to enterprises that are not currently in the same market area, but have the resources and capabilities to enter the market. For example, Amazon and Wal-Mart are both potential competitors in the e-commerce market. Non-competitors refer to enterprises that are neither in the same market area nor have the resources and capabilities to enter the market. For example, Apple and Coca-Cola are both non-competitors.

When determining the scope of competitors, it is necessary to consider the market-based approach and resource-based approach, as well as the number and strength of competitors, and select the most influential and threatening competitors as the research object. For example, Champ Consulting used to provide competitor research services for a leading online education platform in China, which mainly provides online courses in two categories: K12 education and vocational education. When determining the scope of competitors, Shangpu Consulting first divided the competitors into direct competitors and indirect competitors according to the market field, and then divided the competitors into potential competitors and non-competitors according to resources and capabilities. Finally, according to the scale and brand of competitors, four direct competitors and two potential competitors were selected as the research objects, namely: TAL, New Oriental Online, NetEase Youdao, Baidu Education, Tencent Education and Alibaba Education.

Collect competitor information

The second key point of competitor research is to collect competitor information, that is, to obtain relevant data and information about competitors for in-depth analysis and evaluation. This step is the core of competitor research, and it is also the most time-consuming and laborious step, because competitor information is not readily available, but needs to be collected and sorted through a variety of channels and methods.

Generally speaking, there are three ways to collect competitor information, one is public information, the other is private information, and the other is speculative information. Public information refers to information publicly released or disclosed by competitors, such as competitors' official websites, annual reports, press releases, social media, etc. Such information is relatively easy to obtain, but it is also necessary to pay attention to the authenticity and timeliness of the information. Private information refers to information that competitors have not publicly released or disclosed, such as competitors' internal strategies, product details, customer feedback, employee information, etc. It is relatively difficult to obtain such information, but there are also some legal and reasonable ways, such as attending industry meetings, visiting industry experts, investigating industry customers, etc. Speculation information refers to inferring possible information about competitors based on existing public and private information, such as the competitor's market share, cost structure, profitability, etc. The acquisition of such information is relatively subjective, but it also requires some logic and basis.

When collecting competitor information, it is necessary to comprehensively consider public information, private information and speculative information, as well as the importance and reliability of the information, and select the most valuable and credible information as the research content. For example, when providing competitor research services for the above-mentioned online education platform, Shangpu Consulting collected the following information about competitors: competitor's history, organizational structure, business scope, product characteristics, price strategy, marketing methods, technological innovation, financial status, market performance, user evaluation, partners, social responsibility, etc. Among them, part of the information is obtained from the competitor's public information, for example, the competitor's historical evolution, organizational structure, business scope, etc.; Part of the information is obtained from the competitor's private information, for example, the competitor's product characteristics, price strategy, marketing methods, etc.; Part of the information is obtained from the competitor's speculative information, for example, competitor's market share, cost structure, profitability, etc.

Analyze competitor strategy

The third key point of competitor research is the analysis of competitor strategy, that is, based on the collected competitor information, assess the strengths and weaknesses of competitors, predict the trends and intentions of competitors, and formulate corresponding countermeasures and recommendations. This step is the purpose of competitor research, but also the most valuable and meaningful step, because the strategic analysis of competitors can help enterprises to enhance their competitiveness, seize market opportunities, avoid market risks, and achieve the development goals of enterprises.

Generally speaking, there are four ways to analyze competitor strategies, one is SWOT analysis, the other is five forces analysis, the other is value chain analysis, and the last is strategic group analysis. SWOT analysis method is to comprehensively evaluate the strategic situation of competitors according to their advantages (Strengths), disadvantages (Weaknesses), opportunities (Opportunities) and threats (Threats). For example, the advantages of competitors may be high brand awareness, good product quality and high customer loyalty, while the disadvantages of competitors may be high cost, weak innovation ability and low market penetration, opportunities for competitors may be market demand growth, policy support, technological progress, etc., and threats from competitors may be new entrants, substitutes, price wars, etc. The five forces analysis method is to analyze the competition degree and profitability of the industry according to the industry environment of competitors. The five forces are: the bargaining power of suppliers, the bargaining power of buyers, the threat of new entrants, the threat of substitutes and the competition of existing competitors. For example, the high bargaining power of suppliers will lead to the increase of costs of competitors and the high bargaining power of buyers, "It will lead to a decline in the revenue of competitors, a high threat of new entrants, a reduction in the market share of competitors, a high threat of substitutes, a reduction in the demand for competitors' products, and intense competition from existing competitors, which will lead to a compression of competitors' profits. The value chain analysis method is to analyze the core competitiveness and cost structure of competitors according to the value creation process of competitors. The value chain includes: basic activities (procurement, production, logistics, sales, service) and auxiliary activities (technology, manpower, finance, management). For example, the core competitiveness of competitors may be the low-cost advantage in the procurement process and the high-efficiency advantage in the production process, it has realized the advantage of rapid distribution in the logistics link, the advantage of extensive coverage in the sales link, the advantage of high satisfaction in the service link, the advantage of innovation in the technical link, the advantage of high quality in the human link, the advantage of sound finance in the financial link, and the advantage of excellent management in the management link. Strategic group analysis is based on the strategic similarity of competitors, competitors are divided into different strategic groups, and then analyze the characteristics and trends of each strategic group, for example, the strategic similarity of competitors can be divided according to the degree of product differentiation and cost leadership, thus forming four strategic groups, namely: differentiation strategy group (high product differentiation, high cost leadership), focus strategy group (high product differentiation, low cost leadership), cost leadership strategy group (low product differentiation, high cost leadership) and dilemma strategy group (low product differentiation, low cost leadership).

When analyzing competitor strategies, it is necessary to consider SWOT analysis, five-force analysis, value chain analysis and strategic group analysis, as well as the strategic objectives and strategic choices of competitors, and choose the most appropriate method and perspective as the analytical framework. For example, when providing competitor research services for the above-mentioned online education platform, Shangpu Consulting analyzed the following strategies of competitors: the strategic goal of competitors is to occupy a leading position in the online education market, provide high-quality education content and services, and meet users of different age groups and demand types; the strategic choice of competitors is to adopt differentiation strategy through continuous technological innovation and product innovation, to improve the added value of products and the loyalty of users; the strategic advantage of competitors is to have a strong brand influence, rich educational resources, professional team of teachers, efficient operation mode and stable financial situation; the strategic disadvantage of competitors is to face fierce market competition, high R & D investment, complex laws and regulations and uncertain market demand.

Conclusion

Competitor research is an important strategic analysis tool that helps companies understand their strengths and weaknesses, identify market opportunities and threats, and develop effective competitive strategies. From an expert's point of view, this paper introduces three key points of competitor research, namely: determining the scope of competitors, collecting competitor information, and analyzing competitor strategy. At the same time, this paper also shows the practical application and value of competitor research in combination with the specific cases of Shangpu consulting service customers. I hope this article can provide you with some useful reference and inspiration to help you better conduct competitor research and enhance your competitiveness and development potential.