Do You Know Your Competitors?  

11th August 2005

Who Are Your Competitors?

A statement of the obvious, but you need to know who they are, first of all.

Remember to include your direct competitors, as well as alternatives which your customers could go to. For example, if you’re an interior decorator, your competitors would be other interior decorators, plus decorating services available through certain homewares and home furnishing stores.

If you design and develop websites, your competitors are other web development companies, and could also be graphic design companies or even ISPs. They may or may not have the capabilities to do this sort of design work in-house, but if their customers perceive that they can use these providers as a one-stop-shop for their marketing and design needs, then they become your actual competitors.

Some competitors are stronger than others of course. You will need to identify your strongest competitors in each segment of the market in which you operate, and identify competitors based on who your customers buy from when they don’t buy from you.

Competitor Strengths

§ What advantages would they offer to your customers?

o Service

o Distribution/availability

o Price

o Trading terms

o Product range

o Quality

o Continuous additions to the product/service range

o Etc.

§ What is the staff like?

o Technically competent

o Friendly and courteous

o Go the extra mile type of people

o Responsive

o Resourceful

o Supportive

o Interested

o Professional

o Strong sales team

§ What is the customer base like?

o Provide testimonials

o Provide referrals

o Leverage to gain new customers

o Loyal

o Partnership relationship rather than customer-supplier

o Numerous

o Which segments

o Do they provide access to or leverage into niche markets

§ Company structure

o Sound management

o Good cashflow

o Available capital

o Well organised – good systems and processes

o Sound strategies

o High profile in customer market

o Technological advantage

o Geographic representation

Competitor Weaknesses

§ Is there anything customers or suppliers complain about, that you know of

§ Are they weak in functional areas (sales, marketing, production, finance & admin, service and support, etc.)

§ Do their products/services have weaknesses/gaps/limitations/quality

§ Do they have weaknesses in their processes – delivery, production, order processing, etc.

§ Are there weaknesses in their product/service range – are all their products reaching maturity, do they have a lack of new products/services in development, is their main source of revenue from a declining market

§ What about their staff? Are they technically competent, committed to the company, dedicated, etc.

§ Does the competitor appear to be lacking in strategic direction? Are they declining, growing or ‘treading water’?

§ Use the above checklist under ‘Strengths’ to complete the analysis of competitor weaknesses.

Alliances

§ Are your competitors aligned with any other companies?

§ Are these alliances beneficial? Does it create a barrier for you into a market segment?

§ Do they preclude you/other companies?

§ What sort of advantage do these alliances provide?

§ How strong are their partners?

Marketing

§ What is their market share?

§ What is their market position?

§ Are they in growth, decline, maintenance mode?

§ What is their message to the market?

§ What is their mode of communication?

§ Do they have a brand?

§ What is the brand or company values?

§ Do they have effective marketing strategies and programs?

§ Do they have good marketing resources?

§ Do they have a profile in the market/in your industry?

§ Do they use PR?

§ Do they exhibit at trade shows?

§ How do they acquire new customers?

§ If applicable, how have they grown their business?

§ Etc.

There are many aspects you could evaluate when assessing your competitors. These are just some, and the more you know, the better equipped you will be to compete and compete effectively.

Go through this checklist for each of your main competitors and when you have assessed their key strengths and weaknesses, and how that compares to your own, then you will be able to develop a competitive edge strategy. If you don’t have a competitive edge, then you should probably spend some time rebuilding or restructuring your business or your products.

Information is knowledge, knowledge understood is wisdom. Start with information, analyse it, understand it, and act on it. Fierce competitors know their game, and their opponents, and only then do they win.