As more and more new startup ventures emerge and established businesses diversify into different markets, the importance of assessing the competitive landscape becomes more prominent. In such times of steep business competition, overlooking or ignoring competitive landscape analysis can spell disaster for any growing business.
What is competitive landscape analysis?
Competitive landscape analysis is a continuous process that involves gauging the market to gain a clear understanding of who your business rivals are and how each business, including your own, compares to the others.
It is crucial to note the attribute “continuous” here since your competitive landscape is ever-evolving and not stagnant, marked by the entry of new players and the further evolution of the existing ones. There is no guarantee that a company that is not directly your competitor today or smaller than you, cannot become your direct rival or overtake you in terms of revenue.
Besides, you should also remember that as your competitors keep improving their means to acquire competitive intelligence, they keep growing in business. So, there is no way you can go without resorting to competitor landscape analysis when you aim for sustainability and business expansion.
Why is competitive landscape analysis crucial?
Competitive landscape analysis is needed for the success of your business. It helps with two highly critical aspects, namely, differentiating your brand from the crowd and your solution. This means as the competitive landscape gets crowded with more players, you need to break through the noise with greater force, which can only be possible when you have enough data to be forceful. This data can only be fetched through a deep and comprehensive analysis of your competitive landscape.
So, what kind of information can competitive landscape analysis reveal?
This is the foremost and most obvious information you need to proceed – you need to identify and categorize your competitors first. Here, no matter how complex the landscape appears, you need to be very careful in identifying your rivals, ruling out any chances of overlooking or underestimating any business.
You need to classify all your competitors into the following –
- Direct competitors - Your neck-to-neck rival businesses in a specific target market, vying for trades and market share.
- Indirect competitors – Companies that offer similar products or services with or without the same core audience.
- Aspirational competitors – A brand you admire for its achievements in a specific target market. Although you do not currently compete with them, you consider them a potential rival if you venture into that market in the future.
- Perceived competitors – These are not really your competitors, though public perception might say otherwise. It is important to identify perceived rivals to minimize complexities and get a clear picture of your competitive landscape.
- Where do you stand in comparison to your rivals?
After segmenting your rivals, as mentioned above, you need to map out the position of each company in comparison to each other. It will also be crucial to map out your position in the market compared to each of your competitors.
Specific comparison metrics or variables will be needed to gauge each of your relative position in the market, like –
- Growth and curve – To chart out the growth and its path, you need to find data such as when a company was established, its headcount of workforce, funding generated by them, its annual turnover, market capitalization, etc. Make sure to closely monitor those businesses that are accumulating capital – they are your emerging competitors.
- Marketing and reach – Data related to the social media and website performance of the businesses will matter here. From the level of popularity of their website, engagement, and followers on social media, you can identify the one with the best marketing reach. You can also find out the platforms they publish content, the likes, views, and shares on each platform, and other minute details of their content marketing strategies.
- Messaging and positioning – Once you start getting an idea of where they position themselves in the market, you need to examine how they communicate their brand positioning to their audience. Here, it will be important to differentiate your own position based on the value you uniquely bring to the market. Your brand will have its own voice, and you should use messaging to appeal to your target audience, retain your USP, and keep improving on it continuously.
Final words
It is vital to continuously evaluate and improvise on your competitive landscape analysis strategies to stay abreast of competition. This will drive business sustainability and drive expansion, without losing relevance in the market.