Porter’s five forces have formed the bed-rock of determining the competitive landscape of any company: the threat of new entrants and substitutes, power of buyers and sellers, and rivalry among direct competitors. However, there are several other factors one should consider to assess the landscape. Given the large number of factors, a methodical approach is required to strategically assess the competitive landscape for devising the optimal business strategy. This should be followed by a rigorous process for business planning combined with a rapid evaluation-led decision-making process to beat the competition.
Who are the principal competitors and how do they stack up?
Identifying and analyzing competitors is the crucial first step in assessing the competitive landscape. This requires differentiating the company and its product(s) through market research and subsequently feeding the insights into a powerful marketing strategy. Soliciting customer feedback and investigating customer conversations on social media can be useful elements for comparing company and competitor strategies and building a future roadmap that enables outperforming competition.
Evaluate the long-run shifts in the company’s cost positions relative to the competitors. How can the company reduce its cost components by shifting its production processes? How will inflation impact the costs of the company relative to its competitors? One should know the company’s competitive position through its value-add at each stage compared to the competition. It will help build a win-win situation for the company and its customers.
Where does this company stack up to the competition?
Conduct interviews of stakeholders and customers (lost to rivals) to gauge the company against the competition. Contact the company’s sales team to avail deeper insights into this knowledge base. The sales team can know from the prospects as to how their rivals compare to the company’s offerings. Interview an external vendor to avail an impartial perspective on customer insights. Focus on comparing price, value, durability, quantity, convenience, customer service, and design dynamics. Competitor proposals and presentations might be accessible to the sales team. These provide enough information on competitor offerings (objectives and the underlying strategic dynamics) against which to assess the company.
What is their relative cost position, market share, product quality, people, strategy, etc.?
Impact of rising costs is unavoidable. Check influences of inflation on competitors’ current operating costs. Have the rivals factored these pressures in their overall business strategy? If the competitors operate in a capital-intensive industry, see if their capital requirements tend to impact their long-run competing ability. It will be wise to do a strategic cost analysis for gauging impact-severity of inflationary pressures on the company’s competitive position with respect to that of competitors. This will enable using inflation to the company’s advantage. Other factors to consider include: price-benefit positioning; value of intangible advantages; the expected price-line of competitors’ products per price-benefit; and shifts in the value of price benefits equation.
What does the company expect its competitors to do?
Expectations of the company regarding competitor’s market conduct would significantly impact the formation of its own competitive strategy. The efficacy of its observations and the inculcation of the learnings would determine its ability to survive in the competitive landscape. For instance, company policy on advertising budget is formed considering competitor’s ad spending. Whereas, ideally the company must balance the money spent on ads with the extra revenue that it actually achieves via ad initiatives. Is the company comfortably opting to raise prices and also expecting the competitors to do the same during chronic inflation?
What is the competitors’ strategy?
Discover and decipher the competitors’ strategy by studying their objectives and future course of action. The company’s sales team is the primary contact point for accessing competitor proposals and presentations. Their pitch strategy would give insights into their current and future market strategy. Referring competitors’ digital publications (content production and distribution, viz., press releases, market insights and industry views — published by their management) would detail their strategies.
Study if their future plans are:
Also analyze competitors’ market share, expending and funding tactics, performance, marketing and distribution channels, pricing, partnerships, bundling techniques, etc. to ascertain their competitive direction.
Competitors’ strategies for staying cost competitive must be thoroughly studied to precisely evaluate the competitive landscape. Is the company and the competitors ready (cost- and price-wise) for the emergence of a volume-conscious buyers’ market? Is a competitive pricing trap imminent for the company or its competitors? Not just these, also map the entire competitive-set to thoroughly ascertain the rival offerings (direct competitors) delivering competing value-addition to customers. How well are the target customers able to fulfil their current needs is a critical competitive landscape insight. More so if the customers are satisfyingly availing competitors’ products or services to fulfil their goals and objectives. To chart a robust competitive landscape blueprint for the company, map the competitive-set, fusions of inputs your target customers use for goals’ fulfilment, and value elements.