Competitor analysis

Competitive environment analysis

Analysis of the competitive environment contributes to the achievement of a whole range of marketing and production goals of the organization. Based on it, you can predict the outcome of the competition or choose the optimal model for promoting and positioning the company’s products.

Qualitative analysis of the closest competitors allows us to simulate the whole variety of scenarios and timely make the necessary changes to the company's activities.

Depending on the objectives of the study, the analysis of the competitive environment is carried out in several directions. The main objectives of the assessment include:

• Level of competition in the industry. Market shares. Competitors map
• Infrastructure and technological level of competitors,
• Comparative analysis of prices/tariffs,
• Methods of promoting competitors, strategies for attracting customers,
• Key consumers of competitors (for B2B),
• Competitors' customer satisfaction, perception of price-quality ratio
• Assessment of competitive advantages and disadvantages.

Based on these data, the success of any company is mathematically calculated. The assessment results make it possible to quickly respond to changes in consumer preferences and take measures to eliminate shortcomings in positioning and promotion strategies.

Comparative analysis of competitors by time and other parameters allows us to identify the dynamics of changes in the marketing strategy and evaluate the most effective moves of the market leader that provide the best results. The introduction of this knowledge into the practice of the company will help minimize errors in planning and implementing its own marketing strategy, as well as achieve an increase in income and market share.

The most effective methods of competitive analysis

Basic methods of competitor analysis:

• assessment of the shares of all market participants;
• comparative analysis of competitors according to certain parameters;
• rating companies;
• compiling positioning maps;
• analysis of competitors’ assortment;
• monitoring the cost of goods and services.

Company ratings are calculated based on data on consumer preferences. Clients and buyers need to select and evaluate the degree of importance of each of the proposed parameters for the work of firms operating in a particular market. All obtained characteristics are summarized, processed and analyzed. Based on them, the total score of each subject is calculated. Competitive analysis allows you to fairly accurately rank the list of subjects and identify the leading companies in the market. The rating shows consumer perception of companies represented in the industry. Often its results do not coincide with the ranking based on the shares occupied by the participants. You can use these discrepancies to your advantage.

Positioning maps are actively used for annual monitoring of market development in certain geographic territories and selection of optimal segments in terms of maximum possible profits.

Positioning maps can be visually designed in various ways, but, as a rule, they are presented:

• in separate descriptions of each market entity according to certain parameters;
• in a three-dimensional matrix with fixed positions of companies.

In the second case, the division of the market is clearly shown according to the most important criteria and parameters (for example, by level of prices and service).

The methodology for analyzing a competitor based on positioning maps consists of an integrated approach to studying the market situation, which allows us to take into account the most important points and trends. Positioning maps facilitate the search for additional markets and consumer segments.

For manufacturing companies, wholesale and retail suppliers, it is important to analyze the activities of competitors in terms of the “assortment” parameter. This must be done before introducing a new product to the market, developing other segments and monitoring market trends in the presence. Assortment is often the most important factor determining consumer choice. The results of independent studies confirm this. Regularly conducted competitive market analysis should include the study of:

• consumer preferences;
• consumer assessment of the companies’ assortment;
• “outdated” assortment;
• financial indicators of each product group.

Marketing methods of competitive analysis are the main source of representative information and the key to effective recommendations for all market participants.

Analysis and monitoring of competitors' prices

The cost of a product is one of the leading selection criteria even for the wealthiest people. For manufacturing companies and retail chains, it is important to analyze competitors' prices both before introducing a new product to the market and developing other segments, and to monitor trends in the market presence.

Retail chains sell thousands of items of a wide variety of items, so their list of product ranges and their prices is huge. For manufacturers, this list is significantly smaller, since a comparison of product costs is required, usually in one or two product groups.

Cost information helps determine price limits for a particular product or service. Limited monitoring for retail chains allows you to study the cost of goods for individual selected categories - marker goods. Based on them, as a rule, the consumer makes general conclusions about the price level in a particular store.

Analysis of competitors’ activities according to certain parameters

Marketing analysis of competitors includes the collection and analysis of commercial information from competing organizations. As a rule, it is difficult to carry out on your own. In this case, it is better to contact research agencies.

BCGroup analyzes the competitive environment of the organization and, on its basis, compares the performance of the customer company with other companies operating on the market, and gives practical recommendations for improving individual performance parameters, as well as positioning.

Competitor market analysis can be carried out using a number of parameters:

• market shares and volume of competing organizations;
• advantages and disadvantages from a consumer point of view;
• marginality;
• sales volumes;
• main consumer segments;
• average checks;
• cost and sales structure.

Industry and competitor analysis provides complete representative information, the use of which provides enormous benefits: understanding the tactics and strategies of your closest rivals, ways to get ahead of them, and the ability to make optimal choices for mergers and acquisitions.

The BCGroup agency uses effective criteria, methods and principles of competitive analysis. An integrated approach to research guarantees the best results, makes it possible to predict the development of the market situation, minimize risks, and competently build promotion and positioning strategies.

How to conduct a competitor analysis: basics and stages

Analysis of the competitive environment begins with identifying the market share of each company. This is the indicator that needs to be monitored regularly. Market share dynamics shows the development and performance results of each organization. It does not depend on changes in market capacity. Comparison with the indicators of the previous period allows us to draw informed conclusions about the success of the current work. The main indicators on the basis of which market shares are calculated are financial (less often - natural).

The basics of competitive analysis involve knowledge and monitoring of many market indicators, combining several research methods that are most suitable for solving existing problems. This allows you to accurately calculate revenue volumes, obtain real opportunities to expand your sphere of influence in the market, and identify the most vulnerable spots of competitors. The dynamics of the organization's development, the effectiveness of the management and marketing decisions taken are clearly visible in the analytical reports generated based on the research results. Market share allows you to separate the effect of market growth from the growth of the organization itself.

Data on the shares and capacities of market entities, published in the media and presented as a result of large-scale marketing research, vary greatly. This is due to the fact that participating companies provide information to the media independently, and marketing agencies are based on objective market indicators. A strategic competitive analysis conducted by an independent agency will provide reliable data on the basis of which you can develop truly successful tactics and strategy for the company's development. The stages of competitive analysis in this case necessarily include the collection of primary information from consumers. This is the most accurate way to get the marketing data you need.