StrategyFramework / modelModelIntermediate

Competitor analytics

How can competitor analytics support strategic choice or positioning?

IntermediateStrategicIndividual3 min read

Contents

Competitor analytics is important for marketing and strategic planning.

Competitor analytics turns evidence about rival and substitute offerings into a structured view of the competitive landscape. It supports marketing and strategy by distinguishing the businesses that materially affect customer choice from organisations that merely look similar. The analysis clarifies who the relevant competitors are, how customers perceive them, where they sit in the market and how their position compares with yours.

When to use it

The appropriate review cycle depends on market volatility. In a fluid industry with frequent entry, exit and repositioning, complete the analysis at least annually and monitor important signals between reviews. In a stable industry where the main participants change slowly, a full refresh every two years may be sufficient.

Revisit the findings whenever a consequential strategic decision is being prepared. This makes it possible to anticipate how a move could affect competitors, estimate their likely responses and prepare appropriate countermeasures.

The analysis should answer questions such as:

Which competitors matter most, and what evidence makes them relevant?

What is each key competitor trying to achieve, and how do those objectives differ from ours?

Where is each competitor stronger or weaker?

What threats could each one create?

What opportunities arise from their choices or limitations?

Which strategies are they following, and what could those strategies mean for us?

Given their previous actions, how might they react to a change in our business?

Origins

Competitor analysis has roots in military intelligence, economics and long-standing commercial market research. It became a more explicit management discipline during the rise of strategic planning in the 1960s and 1970s. Michael Porter’s Competitive Strategy then supplied a widely adopted structure for analysing industries and individual competitors through their future goals, assumptions, current strategy and capabilities. Digital data, online reviews and text and sentiment analysis later expanded both the scale and timeliness of the evidence available.

What it is

The process compares competitors’ objectives, positions, capabilities, offers and behaviour. A well-maintained competitor set reveals opportunities created by a rival’s weakness and threats created by its strength. It also brings evidence about several competitors into one consistent view, avoiding the distorted perspective produced by isolated anecdotes or an exclusive focus on the most visible rival.

Why it matters

No organisation operates independently of its market. Several businesses may be competing for the same customer budget, while substitutes can change the need for the category itself. Sustained performance therefore requires an informed view of market developments and of how customers perceive both your offer and the alternatives.

Competitor analytics makes relative advantages and disadvantages visible. It can also improve forecasts of rival behaviour: observed objectives, resources and response patterns provide a more defensible basis for anticipating reactions to a new product, price or channel move. The result is not certainty, but a better-prepared strategic decision.

How to use it

Start by defining the decision, market boundary and comparison criteria. Build an initial competitor universe that includes direct competitors, emerging entrants and substitutes, then rank participants by their effect on customer choice, revenue or strategic freedom.

Useful recorded evidence includes annual reports, product material, public pricing and marketing activity. A lawful mystery-shopping exercise can document the purchase and service experience and add the buyer to public customer communications. Trade journals, newspapers, media-monitoring services and Google Alerts can identify announcements and changing narratives.

Observable evidence includes price movements, product changes, campaigns, customer experience and channel activity. Opportunistic evidence can come from trade shows, supplier conversations and sales-force meetings, provided confidentiality, privacy and competition-law boundaries are respected. Salespeople often meet prospects who already use a rival and can record what those buyers value or dislike. Online reviews and social-media comments now make customer evidence easier to collect at scale. Text analytics (Text Analytics) and sentiment analysis (Sentiment Analysis) can help identify recurring strengths and weaknesses, but samples and platform biases must be checked.

Practical example

Consider a mobile-phone manufacturer beginning an analysis. An online search can establish the other handset makers, but that direct list is incomplete. Tablets and internet-calling services such as Skype can reduce or replace some reasons for owning or using a phone. They are indirect competitors and their development belongs in the market view even though they do not manufacture the same product.

After identifying direct and indirect competitors, define the customer value drivers. These might include price, quality, warranty length, usability and particular features or benefits. Existing customer analytics can reveal which criteria matter and to which segments. Create a common comparison matrix and record which competitors deliver each feature. Benefits are more subjective than specifications, so use review and social-media evidence to test whether customers actually experience them.

Finally, compare your offer with the market and especially with the three most consequential rivals. Identify genuinely distinctive attributes, test whether customers value and recognise them, and segment the evidence by product, service, competitor and geography. The output should separate verified fact, estimate and interpretation, state evidence dates and assign owners to signals that require continued monitoring.

Top practical tip

Make competitor analysis a repeatable evidence cycle. Maintain a shared comparison structure, date every observation and update the implications when a relevant signal changes. This exposes blind spots that informal conference comments and occasional news articles leave hidden.

Top pitfall

Do not present intuition, anonymous anecdotes or accumulated impressions as competitor analytics. Use a systematic, ethical process and distinguish observed evidence from assumptions about a rival’s intentions.