Competitive Intelligence

Pr. Njomo Louis Mosake

 INTRODUCTION
Business environments have been increasingly dynamic due to the increasing complexity of external stakeholders’
interests insofar as organizations not adapting themselves to this ever-changing situation would be faded sooner or later.
In this regard, competitive intelligence (CI) as a new approach to achieve competitive advantage has grown in prominence
since the early 1980s when knowledge-based competition and environmental changes have increased. The understanding
of environmental forces, such as competitors’ dynamics and activities, may alert an organization and enhance its
responsiveness to the market.

 Competitive intelligence, sometimes referred to as corporate intelligence, refers to the ability to gather, analyze, and use
information collected on competitors, customers, and other market factors that contribute to a business's competitive
advantage

 CI means understanding and learning what is happening in the world outside the business to increase one's
competitiveness. It means learning as much as possible, as soon as possible, about one's external environment including
one's industry in general and relevant competitors
 Competitive intelligence is a legal business practice, as opposed to industrial espionage, which is illegal.[3]
 The focus is on the external business environment.
 There is a process involved in gathering information, converting it into intelligence and then using it in decision making.
Some CI professionals erroneously emphasise that if the intelligence gathered is not usable or actionable, it is not
intelligence.

 The term CI is often viewed as synonymous with competitor analysis, but competitive intelligence is more than analyzing
competitors; it embraces the entire environment and stakeholders: customers, competitors, distributors, technologies, and
macroeconomic data. It is also a tool for decision making.
 THE PURPOSE OF COMPETITIVE INTELLIGENCE

 The goal of competitive intelligence is to help make better-informed decisions and enhance organizational
performance by discovering risks and opportunities before they become readily apparent
 The better you understand your competitors the clearer perspective you have on your industry and audience as a
whole. Competitive intelligence enables you to better speak on your strengths, brainstorm ideas for quick gains,
and make more data-driven decisions all around.

 The purposes of CI are to manage and reduce risk and use corporate information strategically to enhance a firm’s
competitiveness while eroding the competitive advantage of its rivals .
 Actionable intelligence information is necessary to handle changes in an industry and enables executive
management teams to make better strategic decisions and actions aimed at enhancing the competitiveness and
overall innovation performance of a firm.

 Therefore, CI should be understood as the ability of an entity to think, plan, predict and solve the problem in an
innovative manner.
 THE IMPORTANCE OF COMPETITIVE INTILLIGENCE

 Stay nimble and react quickly

By staying on top of what competitors are doing, a company can be more nimble and react quickly to their actions. For
instance, they can adjust pricing, introduce new products, discontinue products that competitors are now offering, and take
other similar action depending on the needs of their businesses.

 Learn from the Mistakes of Other Companies

“Competitive intelligence allows us to constantly learn from successes and failures around us.

 Stay Ahead of Your Closest Rivals “Smaller businesses should make use of competitive intelligence to grow their
businesses to the same level as their competitors. This then positions them to exceed past their competitors. Larger
businesses should use competitive intelligence to stay ahead of their closest rivals and keep smaller businesses from
becoming close rivals.
  Identify Areas of Opportunity
Finding areas of opportunity. It's good to know what areas of opportunity exist for your company. Your competitors can
snuff out which space is still fresh for the taking. Try to understand who their marketing is geared towards and what
kind of outreach is being done.”

 Avoid Pitfalls and Innovate Successfully “We know that companies need competitive intelligence to better
understand their competitors’ strengths and weaknesses, to monitor competitors’ products, advertising and
brand platforms — all in an effort to influence their own strategic decision-making. What business leaders often
fail to derive from competitive intelligence is which pitfalls to avoid and which ideas, if quickly capitalized on,
could serve as innovative differentiators.

 Differentiate Yourself from the Pack “Competitive intelligence is essential in today’s hugely competitive
marketplace for many reasons. The most important reason is so you know what not to do! The days of following
your competitors are over. You need to clearly set yourself apart. Your product and service must be different. They
must be the best, and they have to stand out and be memorable. If you know what your competition is doing, you
know what you shouldn’t do: Exactly what they are doing.”
 OBJECTIVES OF COMPETITIVE INTELLIGENCE

 Learn What Competitors Do Well

 Understand Their Strengths and Weaknesses
 Avoid Strategic Errors
 Deal With Threats
 Anticipating Customer Needs
 To avoid wastage of resources
 To avoid poor positioning
 Understanding Competitors’ Strengths and Weaknesses
 Finding Markets That Are Large or Growing
 SOURCES OF COMPETITIVE INTELLIGENCE

Competitors in the News

When taking a look at competitors the first logical step would be to look for headlines in the news. This is a great way to see
what big events have been happening as well as a possible opinion on public perception. Headlines can be positives or
negatives, but they are always noteworthy events. Whether a competitor is releasing a new product or dealing with internal
corporate drama these are things that you need to know in order to have a current understanding of your competition.

Competitor Human Capital Movement

Human capital and any changes related to it are a great look into the day by day operations of your competitors. Being able
to see where your competitors stand in human capital is important to see which strategies they might use and if they are
looking to expand or reduce efforts. Whether it is training on new equipment, implementation of new technology, or
mandating a new certification these skills are often focused for the purpose of increasing individual employee productivity.
If multiple competitors are making major adjustments to their human capital levels it might be in your best interest to look
into these efforts too. If the industry standard raising above your employee’s level of comprehension you will soon find
yourself falling behind.
Competitor Shifts

Shifts in competition are necessary events for you to keep an eye on. Competitors may shift in or out of direct competition with
you. You never know when a competitor might decide to completely change its marketing strategy and enter a new market or
decide to leave an old one. Similarly, you never know when a new competitor might show up in your industry, posing a possible
threat. You should always know who you’re up against. Knowing that not all competitors operate the same you’ll want to adjust
your strategies to counteract any shifts in competition. This way you can stay as efficient as possible while keeping pressure on
those who decided to stay/enter your market.

Competitor Job Listings: New Positions

Something as simple as a competitor’s job listings can tell a lot about a company. There’s always a reason for a new job listing
and it can signify a few different things. One, your competitor is looking to expand and needs to increase its employee base. If
your competitor is looking to fill multiple management and operational positions they might be looking to operate on a larger
scale. If they are looking to find applicants in a different region the might be looking to expand nationally, or internationally.
Trade Show News

Not everyone has the time and resources to send representatives to industry trade shows and looking through the top headlines
the week after can often feel like you’re missing out. By receiving the most recent and pertinent news from trade shows and
expos you can stay up to date on what is necessary for you, without having to search through all of the announcements and
headlines. Trade shows are all about introducing new technology. It’s important to know when something new might be coming
along to disrupt your industry. A failure to anticipate and adapt to change has been one of the biggest reasons for company
downfalls.

Social Media Review

One of the biggest benefits of social media is that it gives you an easy way to view how big your audience is.

In a world where more and more of our time is dedicated to being online, social media audiences start to hold more weight in
how they reflect a company’s actual customer base. Another great benefit of social media is being able to see consumer
perception in its most direct form. People love to share their experiences and that isn’t limited when it comes to a customer’s
experience with a product or service.

The way that competitors portray themselves on social media is also a great thing to observe. When it comes to how they
handle criticism or promote their business, it’s important to see how they fit into the market.
Market/Stock Index

When it comes to public information about competitors the most obvious resource is market and stock indexes. Out of all of
these components of competitive intelligence this is probably the one that you already spend some time following
competitor’s actions with. Indexes take many of the previously discussed components into account when reporting on a
company’s performance. The fact that a headline or announcement can be so strong in its influence on those buying and
selling stocks shows just how valuable this information is. Indexes give a good, quick, view of a company and are often
informed by a larger array of information.
 COMPETITIVE INTELLIGENCE PROCESS

• Despite some negligible differences, the main recurrent activities of the CI production process are planning,
collection, analysis and dissemination
• These activities are often considered as a cycle that starts withintelligence needsand endswith their communication
to the original inquirer
• An effective and efficient intelligence process does notaim at collecting all possible data, but focuses on the issues
that are relevant to decision-makers.
• As a matter of fact, CI concerns identifying actionable information
• The competitive intelligence process has multiple steps to ensure that we are providing all of the vital information
you need.
• There are six main steps in the competitive intelligence process. These steps are to identify competitors, identify
areas of concern, gather information, analyze the information found, report on the findings, and make a decision
based on the results of competitive intelligence.
Step One: Identifying Competitors
The first step in competitive intelligence is identifying competitors. These preliminary stages may seem obvious, but they are
necessary for letting us know where to start our research. This step also includes finding out more about your industry and
its size. Is your industry reach small or large? Competitors who are of similar size and location are we’d like to focus on
mainly because their actions most directly effect your business and can reflect better as a sample of your industry as a
whole. Knowing which competitors to base our research off of gives us specific companies to look into but it also gives us
different avenues of information to consider.

Step Two: Identifying Areas of Concern

Once we have gotten to learn a little bit more about your industry and your competitors, we can start to narrow our plan
for analysis down to specific areas of interest. If there are any initially areas of concern that your business is concerned
with, we can make those priorities. Knowing what to identify as a key concern will help us narrow our search. Of course, as
we find different pieces of information, we can come across areas of concern that weren’t thought of at this stage. We will
be sure to address these finding in our final report.
 Step Three: Gather Information
Now we are finally ready to get to the real research. There are many different areas of competitive intelligence that we
investigate in order to formulate our research reports. These components of competitive intelligence are all different areas
of interest when it comes to researching competitors. The components of competitive intelligence are as follows:
•Competitors in the News
•Competitor Human Capital Movement
•Competitor Shift
•Competitor Job Listings: New Positions
•Trade Show News
•Social Media Review
•Market/Stock Index

Step Four: Analyzing our Research

By taking the information we have found we can start to piece together the narrative of what is up and coming in your
industry. By seeing which new technologies are being implemented or if new competitors are gaining market share, we can
map out where everyone currently stands in your industry. In this analysis stage we can start to formulate some potential
Step Five: Report Our Findings
This is the step where you finally get to see all of the work we have done. With all the information we have found it can be
hard to get a full grasp of it all. That is why we create a clear and concise competitive intelligence report that you can use to
view all of our findings. Making sure information is categorized well and easy to find is almost as important as the information
itself. We hope that this report can lead its usefulness to your company more than just once and one of the ways to ensure
that is to make the information clear and available.

Step Six: Making Decisions Based on the Results

Now that the information is in your hands you can do with it what you please. Whether you are working on making
decisions with our recommendations or with your team, this is where real action takes place. Decision making can be a hard
task, but we hope that our information will ease that burden. We also know that making big changes at any company often
takes persuasion and committee approval. By having a thorough report that covers all of the opportunities and threats that
face your company from your competitors we hope you can make the changes you wish to see. It helps to have hard
evidence when facing a board of executives or shareholders, hesitant to change practices.
 BENEFITS OF COMPETITIVE INTELLIGENCE

Businesses stand to experience numerous benefits when they undergo competitive intelligence and market insights analysis:
Competitive Insights
The methodologies at the core of CI create unique, evaluative data sets leading toward heightened competitive business
activities. More so than any other approach, CI unearths qualitative and quantitative information on business activities from
its most relevant sources. This allows organizations to see themselves with clearer eyes, understanding what they’re doing
successfully and what keeps them lagging behind industry competitors.

Track Industry Trends and Predict Future Moves

In-depth competitive intelligence guides organizations through changes it can make today to improve tomorrow. Yet it also
hands over external market knowledge that lends predictive insights into emerging industry trends, expectations,
technologies, disruptors and more. For many, this foresight is a form of competitive advantage onto itself.
Improves Decision-Making ROI
Data-backed insights help declutter business initiatives. Organizations can take a hard look at current strengths and
capability gaps, then re-prioritize investments and efforts to address them directly. There is less waste and less indecision —
the ideal formula to see greater returns-on-business investments.
Boost Product and Service Speeds-to-Market
Speed-to-market refers to the time it takes to see a product or service move from its initial ideation to public sales.
Depending on the industry, average speed-to-market times will vary, as will the variables that go into creating, testing and
launching a new commercial good. The more competitive a product or service’s ecosystem, the more essential it is for a
company in that industry to improve its speed-to-market deliverables without sacrificing quality. CI research with a market focus
enhances time-to-market, market entry and market defense capabilities.

Predict Competitions’ Behaviors

Competitive intelligence was founded as a means for organizations to benchmark operations against top competitors. With the
information gleaned across aggregation, synthesis and action, a business is primed to better predict a competitor’s behaviors
across business domains — then beat them to the punch.
Make Business Decisions With Confidence
Critical insights and market intelligence clarify the precise, data-backed actions and opportunities for companies to take. It
illustrates how that opportunity can benefit the organization’s strategic priorities as a whole, plus gives objective defenses behind
tomorrow’s business investments.
 INDUSTRIES THAT MAKE USE OF COMPETITIVE INTELLIGENCE

Numerous industries use competitive intelligence to inform improvements across operations, technology, customer
satisfaction ratings, market entry or market defense practices and more. Six such sectors are outlined below.

Technology
The tech industry seems to evolve at megabit speeds. Changes in consumer expectations often parallel shifts in wider
technological affordances and access, with plenty of organizations salivating to provide the latest and greatest commercial
and enterprise technological goods.
Technology-focused companies can wield CI research to improve many key capabilities:
 New or relaunched times-to-market
 Warranty and customer service operations
 User experience (UX)
 Employee recruitment and retention
 Sustainable organizational structures
 Long-term strategic planning
 Market disruptor mitigation
Healthcare
Those in the healthcare industry navigate substantial government regulations amidst changes to the insurance market, market
stakeholders and patients-as-consumers as a whole.
Competitive intelligence can help the healthcare sector balance its service orientation with still-profitable operations across:
 Pricing analysis
 Supply chain management
 Vendor or third-party administrator relations
 Value-based, not fee-based, service business models
 Strategic alliances between health facilities, insurance carriers, pharmacy benefits managers (PBM), investors and payers

Pharmaceuticals and Biotechnology

Like the healthcare industry, pharmaceutical and biotechnology companies face an extensive regulatory environment in a
high-cost, multi-dimensional sector. Competitive monitoring and integrative analytics alleviate operational risks for those in
the life sciences, medical device, pharma and medical specialization fields by improving:
 Research and development (R&D) lifecycles
 Salesforce operations and structures
 Drug approvals and drug launch planning
 Market entry and gains strategies
 Consumer awareness campaigns surrounding treatments, therapies and prescriptions
Manufacturing and Industrial Sectors
Commercial and industrial manufacturing has undergone a complete transformation in the 21 st century. Scaled-up global
competition, combined with emerging, automated technologies and changing supply and demand models, have irreversibly
altered the landscape of the manufacturing industry. Competitive intelligence gives power back to manufacturers, allowing
organizations to maximize their strengths today while minimizing market risks tomorrow.
Competitive insights for the manufacturing industry assists with:
 Supply chain management

 Distribution strategies

 Supplier and vendor relations

 Go-to-market models

 Lean, Six Sigma or other process and project implementation methodologies

 Market risk modulation

 5. Consumer Goods

From household furniture to personal hygiene products, e-commerce clothing lines to spiked sparkling water, the consumer
goods and retail industry contains businesses of every size and specialization. All these organizations’ concerns, however,
align under the lens of competitive intelligence. Market monitoring and CI consulting explore
opportunities for retailers to improve:
 Brand reputation

 Consumer activity assessments and profiles

 Emerging and disruptive technology preparedness

 Local and global market entry

 Sales strategy benchmarking

 Traditional and online retail development and growth

Financial Services
Externally, trust and transparency are paramount to consumer perceptions of the financial sector. Internally, operations
balance compliance needs with disruptive technology changing the nature of traditional banking, lending, investing and
financial advising.
Key capabilities enhanced by financial service CI include:
 Profitability and cost analysis

 Brand reputation

 Brand and service evolution

 Customer support channels

 Market risk modules

 New entry market profiles

 Mergers and acquisitions (M&A) strategies

 COMPETITIVE ANALYSIS

A competitive analysis is the process of identifying your competitors and evaluating their strategies to determine their
strengths and weaknesses relative to your own business, product, and service. The goal of the competitive analysis is to
gather the intelligence necessary to find a line of attack and develop your go-to-market strategy

Why You Should Conduct a Competitive Analysis

• Understand Market Conditions

• Identify Strengths and Weaknesses
• Design / Adjust Go-to-Market (GTM) Strategy
 How to Conduct a Competitive Analysis
Determine who your competitors are.
Divide your “competitors” into two categories: direct and indirect.
Direct competitors are businesses that offer a product or service that could pass as a similar substitute for yours, and
that operate in your same geographic area.
On the flip side, an indirect competitor is one that provides products that are not the same but could satisfy the same
customer need or solve the same problem.

Company Overview
i. Employee Count
ii. Founding Year
iii. Investors
iv. Number of Customers
v. Mergers and Acquisitions
vi. Market Share
vii. Organizational Strength and Weakness
 Summary of questions:

 What is the total number of employees your competitors have?

 Are your competitors expanding or scaling down?
 How old is your competitor?
 In what geographical market do they operate?
 How much have your competitors raised thus far?
 Who are your competitor’s investors?
 What is your competitor’s customer count?
 Can you estimate your competitor’s growth rate or revenue?
 Have your competitors acquired companies? If so, in what industries?
 What is your competitor’s market share?
 What are your competitor’s top organizational strengths and weaknesses?
Go-to-Market Analysis (Customer Acquisition Analysis)
What are the characteristics and needs of each competitor’s ideal customers?
How does each competitor acquire new customers?
What type of content do they publish and what topics do they cover?
What is their sales process - what channels does it involve, how long does it take, how involved is the sales team?
How easy is it for customers to switch away from your competitors?
What are the barriers to entry in the industry and in relation to each competitor?

Channel:
• Where do your competitors advertise?
• What keywords do they buy on Adwords?
• Do they advertise on Youtube, Facebook, Linkedin, Twitter or other social
media platforms?
 Determine what products your competitors offer.

You'll want to analyze your competitor's complete product line and the quality of the products or services
they're offering.
You should also take note of their pricing and any discounts they're offering customers.
Some questions to consider include:
 Are they a low-cost or high-cost provider?
 Are they working mainly volume sales or one-o purchases?
 What is their market share?
 What are characteristics and needs of their ideal customers?
 Are they using different pricing strategies for online purchases versus brick andmortar?
 How does the company differentiate itself from its competitors?
 How do they distribute their products/services?
Research your competitors sales tactics and results.

Running a sales analysis of your competitors can be a bit tricky.

You'll want to track down the answers to questions such as:
 What does the sales process look like?
 What channels are they selling through?
 Do they have multiple locations and how does this give them an advantage?
 Are they expanding? Scaling down?
 Do they have partner reselling programs?
 What are their customers reasons for not buying? For ending their relationship with the company?
 What are their revenues each year? What about total sales volume?
 Do they regularly discount their products or services?
 How involved is a salesperson in the process?

. Take a look at your competitors' pricing, as well as any perks they offer.
Analyze how your competitors market their products.

Analyzing your competitor's website is the fastest way to gauge their marketing efforts. Take note of any of the
following items and copy down the specific URL for future reference:
 Do they have a blog?
 Are they creating whitepapers or ebooks?
 Do they post videos or webinars?
 Do they have a podcast?
 Are they using static visual content such as infographics and cartoons?
 What about slide decks?
 Do they have a FAQs section?
 Are there featured articles?
 Do you see press releases?
 Do they have a media kit?
 What about case studies?
 Do they publish buying guides and data sheets?
 What online and offine advertising campaigns are they running?
 Customer Experience and Customer Success:
• How do customers like your competitor’s product?
• What do they like the most about your competitor?
• What do the like the least about your competitor (top complaints)?
• What’s the Net Promoter Score (NPS) of your competitors?
• How loyal are customers to your competitor’s product?
• What is the one thing that’s most highlighted in customer case studies?
• Do customers complain about support or product failures?
• How quickly do your competitors respond to customer service questions on social media?

Take note of your competition's content strategy.

When analyzing your competitor's content, consider the following questions:
 How accurate is their content?
 Are spelling or grammar errors present?
 How in-depth does their content go? (Is it introductory level that just scratches the surface or more advanced topics
with high-level ideas?)
 What tone do they use?
 Is the content structured for readability? (Are they using bullet points, bold headings, and numbered lists?)
 Is their content free and available to anyone or do their readers need to opt-in?
. Learn what technology stack your competitors' use.
Understanding what types of technology your competitors' use can be critical for helping your own company
reduce friction and increase momentum within your organization.
For instance, perhaps you've seen positive reviews about a competitor's customer service — as you're conducting research,
you learn the customer uses powerful customer service software you haven't been taking advantage of. This information
should arm you with the opportunity to outperform your competitors' processes.
Analyze the level of engagement on your competitor's content.
To gauge how engaging your competitor's content is to their readers, you'll need to see how their target audience
responds to what they're posting.
Check the average number of comments, shares, and likes on your competitor's content and find out if:
 Certain topics resonate better than others
 The comments are negative, positive, or a mix
 People are tweeting about specific topics more than others
 Readers respond better to Facebook updates about certain content
Don't forget to note if your competitor categorizes their content using tags, and if they have social media follow and share
buttons attached to each piece of content. Both of these will a ect
10. Observe how they promote their marketing content.
From engagement, you'll move right along to your competitor's content promotion strategy.
 Keyword density in the copy itself
 Image ALT text tags
 Use of internal linking
The following questions can also help you prioritize and focus on what to pay attention to:
 Which keywords are your competitors focusing on that you still haven't tapped into?
 What content of theirs is highly shared and linked to? How does your content compare?
 Which social media platforms is your target audience using and the most active on?
 What other sites are linking back to your competitor's site, but not yours?
 Who else is sharing what your competitors are publishing?
 Who is referring traffic to your competitor's site?
 For the keywords you want to focus on, what is the diffculty level? There are several free (and paid) tools that will give you a
comprehensive evaluation of your competitor's search engine optimization.
11. Look at their social media presence, strategies, and go-to platforms
The last area you'll want to evaluate when it comes to marketing is your competitor's social media presence and
engagement rates.

First, visit the following sites to see if your competition has an account on these platforms:
 Facebook
 Twitter
 Instagram
 Snapchat
 LinkedIn
 YouTube
 Pinterest
Then, take note of the following quantitative items from each platform:
 Number of fans/followers
 Posting frequency and consistency
 Content engagement (Are users leaving comments or sharing their posts?)
 Content virality (How many shares, repins, and retweets do their posts get?)
Perform a SWOT Analysis to learn their strengths, weaknesses, opportunities, and threats

As you evaluate each component in your competitor analysis (business, sales, and marketing), get into the
habit of performing a simplified SWOT analysis at the same time.
This means you'll take note of your competitor's strengths, weaknesses, opportunities, and threats any time
you assess an overall grade.
Some questions to get you started include:
 What is your competitor doing really well with? (Products, content marketing, social
media, etc.)
 Where does your competitor have the advantage over your brand?
 What is the weakest area for your competitor?
 Where does your brand have the advantage over your competitor?
 What could they do better with?
 In what areas would you consider this competitor as a threat?
 Are there opportunities in the market that your competitor has identified?
 COMPETITOR ANALYSIS FRAMEWORK

A competitive analysis framework is a model you can use to help shape how you go about researching your competitors. It
helps you home in on specific information by giving a structure to guide your market analysis.
There are several frameworks you can use for competitive analysis in marketing. But how do you choose the right one for
your needs? If you’re a digital marketing agency aiming to get a sense of a new client’s competitors, your needs may be
different from an in-house marketing director, for example.
 SWOT ANALYSIS
1. SWOT Analysis
The SWOT framework helps you evaluate the internal (Strengths and Weaknesses) and external factors (Opportunities
and Threats) that impact your business or a course of action
 When to Use a SWOT Analysis

 SWOT analysis is often used in strategic planning to help identify a potential competitive advantage. For example, your
strong relationships with suppliers might give you the opportunity to offer prices that are lower than your
competitors’. But you can also apply it in much narrower situations.
 You can use it to evaluate a decision by looking at your strengths, weaknesses, opportunities, and threats relative to
the decision, for example.
 Porter’s Five Forces

 Porter’s Five Forces is a framework that examines the competitive market forces in an industry or segment.
 It helps you evaluate an industry or market according to five elements: new entrants, buyers, suppliers, substitutes, and
competitive rivalry.
 According to Michael Porter’s model, these are the key forces that directly affect how much competition a business
faces in an industry.
 When to Use Porter’s Five Forces

This framework is useful when you want to analyze the competitive structure of an industry. Looking at the five forces
can provide insights into how attractive it is to enter a new market, for example. This is helpful if you are considering
whether you should expand your product offering to reach new customers.

Competitor analysis using Porter’s Five Forces can also provide insights to help you shape your strategy to the
competitive landscape of your industry. For instance, if the threat of substitutes is high, you may seek to mitigate that
competitive force with a strategy focused on building brand affinity among your customers.
 Strategic Group Analysis

Strategic Group Analysis is a competitive analysis framework that lets you analyze organizations in clusters based on the
similarity of strategy. By identifying the cluster your firm falls into for any given strategic dimension, you can get a sense
of the impact of the different strategic approaches. You can also see those you are most closely competing with.

When to Use Strategic Group Analysis

This framework is particularly useful when you have a hypothesis about the effect of a business dimension. For example,
you can create strategic groups according to digital marketing tactics and analyze the performance of the groups to
explore potential causality. How do competitors who rely heavily on paid search campaigns fare when it comes to share
of voice? Which of your competitors fall into the same cluster as your firm when it comes to their pricing strategy?
By exploring different dimensions, you can surface key factors for success and evaluate your position relative to others in
the industry.
 Perceptual Mapping

Perceptual mapping is a visual representation of perceptions of your product relative to competing alternatives. It’s also
called positioning mapping, because it shows the position of your brand, product, or service mapped against that of your
competitors. The first step is to determine two attributes you’ll use as the basis for comparison. Next, you plot where your
product and those of your competitors fall on the spectrum of those two attributes.
Here we can see a competitor analysis framework example that maps perceptions of quality against price.
According to BCG, products fall into one of four quadrants in the matrix, each with a corresponding strategy:
[Link] marks are high-growth but low-market-share products, often new products with high potential. These should
be invested in or let go, depending on how likely a product is to become a star.
[Link] are products that are likely to achieve high growth and high market share. Your firm should invest heavily in these
products.
[Link] cows are low-growth but high-share products. These are products that bring in cash and can fund investment in
your stars.
[Link] are low-share, low-growth products considered failures. Your business should reposition these products or stop
investing in them.
When to Use Perceptual Mapping

Perceptual mapping is useful for understanding how your customers perceive your product offering in relation to

your competitors’. Market researchers use perceptual mapping to show the results of customer input they have

collected. As a marketer, you will find mapping useful when you want to understand how customers really view

you and your competitors. This will help you understand whether your existing positioning strategy is registering

with your target audience. It can also provide insight into gaps to target.
 COMPETITIVE ADVANTAGE
• A competitive advantage is an attribute that enables a company to outperform its competitors. This allows a company
to achieve superior margins compared to its competition and generates value for the company and its shareholders.

• A competitive advantage must be difficult, if not impossible, to duplicate. If it is easily copied or imitated, it is not
considered a competitive advantage.

Examples of Competitive Advantage

[Link] to natural resources that are restricted from competitors
[Link] skilled labor
3.A unique geographic location
[Link] to new or proprietary technology
[Link] to manufacture products at the lowest cost
[Link] image recognition
Constructing a Competitive Advantage
Before a competitive advantage can be established, it is important to know the:

[Link]: A company must be clear what benefit(s) their product or service provides. It must offer real value and

generate interest.

[Link] Market: A company must establish who is purchasing from the company and how it can cater to its target

market.

[Link]: It is important for a company to understand other competitors in the competitive landscape.

To construct a competitive advantage, a company must be able to detail the benefit that they provide to their target

market in ways that other competitors cannot.

Competitive advantage requires that you have:

 A clear sense of your own core competencies

 A clear sense of your true competitors and their core competencies

 A clear sense of who your paying customers are

 A clear sense of what these customers value

 STRATEGIES FOR COMPETITIVE ADVANTAGE
There are three strategies for establishing a competitive advantage: Cost Leadership, Differentiation, and Focus (Cost-
focus and Differentiation-focus).
Cost Leadership
In a cost leadership strategy, the objective is to become the lowest-cost producer. This is achieved through large-scale
production where companies can exploit economies of scale.
If a company is able to utilize economies of scale and produce products at a cost lower than that of its competitors, the
company is then able to establish a selling price that is unable to be replicated by other companies. Therefore, a company
adopting a cost leadership strategy would be able to reap profits due to its significant cost advantage over its competitors.

Differentiation
In a differentiation strategy, a company’s products or services are differentiated from that of its competitors. This can be
done by delivering high-quality products or services to customers or innovating products or services.
If a company is able to differentiate successfully, the company would then be able to set a premium price on its products
or services.
3 Focus
In a focus strategy, a company focuses on a narrow target market segment. This strategy is successful if the company is
able to successfully create products/services that can cater to these customers. The focus strategy also has two variants;
[Link]-focus: Lowest-cost producer in a narrow market segment
[Link]-focus: Differentiated products/services in a narrow market segment
 SOURCES OF COMPETITIVE ADVANTAGE
There are 6 sources of competitive advantage.

1. People
People are the driving force behind most competitive advantage. If your people are better at innovating, creating,
producing and establishing relationships you may achieve competitive advantages.
Your competitors may be able to copy your products but they'll never be able to copy your people (although they
might poach them). It's common for much of a firm's competitive advantage to be safely locked up in the
tacit knowledge of its employees.

2. Organizational Culture & Structure

Organizational culture is the shared habits, behavior, beliefs, mission, norms and symbols of your organization.
You could have the best and brightest workforce on the planet — it's not going to matter if they have no common
mission. If your people put all their energy into negative politics or resisting change you'll be ineffective.
An effective culture focuses the energies and abilities of your people on producing meaningful results.
 Processes & Practices
If you have superior methods of producing results you may enjoy competitive advantages. Processes and practices can be
difficult for competitors to replicate.

Products & Intellectual Property

The design of your products can be a competitive advantage. However, this is typically easy for competitors to replicate.
Intellectual property laws can protect your rights to product, technology and process designs.

Capital & Natural Resources

Capital and access to natural resources were traditionally the source of most competitive advantage. The importance of
capital has declined over time. For example, capital is the primary competitive advantage in old industries such as
transport. If you own a railway that has exclusive routes, it's difficult for the competition to build a route to compete. New
industries such as information technology are less capital intensive.

Technology
Technology rose as a major factor in competitive advantage with the industrial revolution. At first, technology included
industrial machinery, transportation technology, energy, office equipment and consumer products. In the 20th century
information technology and biotechnology emerged as major factors.
 Importance of Competitive Advantage

A clear competitive advantage:

 Helps your organization increase certainty

 Allows you to focus resources (time, talent, and treasure) for maximum ROI

 Adds constancy and predictability to your revenue streams

 Helps you achieve organizational momentum

 Reduces unnecessary marketing, recruiting, and fundraising expenditures

 Helps you become a magnet for talent, brand alliances, and issue-focused investors (donors, foundations)

 Helps you more accurately measure progress