Staying ahead of the curve is critical for any business trying to survive in today’s ultra-competitive business landscape. Smart business owners use competitor analysis frameworks to get the edge over their competitors.
You can then adapt and improve upon them to give your business an edge.
If you’re interested in learning more about competitor analysis frameworks, you’re in the right place. In today’s post, we’ll discuss a competitor analysis framework and how you can use it to trample your competition.
What Is a Competitor Analysis Framework?
This is a tool that businesses can use to assess their competition. It lets you gain insights into your competitors’ strategies to better understand their strengths and weaknesses. After that, you can develop your own strategies and improve upon them to outwit your competition.
There are many different ways to go about conducting a competitor analysis. However, most frameworks share the same common elements.
Common Types of Competitor Analysis Frameworks
As mentioned above, there are many different types of competitor analysis frameworks. Businesses will have to find one best suited to their particular needs. Here are the most common.
The SWOT framework is one of the most popular competitor analysis frameworks.The SWOT framework looks at a business’s internal strengths and weaknesses and external opportunities and threats. This information is then used to develop strategies that give the business an advantage over its competitors.
It works best to identify the strengths and weaknesses of your competition, then leverage them to get an edge.
Strategic Group Analysis
Strategic group analysis is another popular type of competitor analysis framework. It’s similar to the SWOT framework in that it examines a business’s internal and external environment. However, strategic group analysis goes a step further by grouping businesses based on their similarities.
You can group your competitors in whatever way works for you. For instance, you can group them according to marketing tactics or even pricing strategies. Don’t forget to group your company too, to know where you stand.
After grouping your competitors, what follows is the analysis. This involves answering questions like, “What does each group do differently, and are there any gaps in the market that you can exploit?”
After that, you can figure out how to make your business more competitive within its strategic group.
Perceptual mapping, or position mapping, is a type of competitor analysis framework businesses use to understand how consumers see them in relation to their competitors.
With perceptual mapping, you need to choose two factors that’ll be your basis for comparison. You can use perceived quality and price as your two factors.
The next step is to plot a graph of these two factors against each other based on the figures from your competition.
Next, you need to plot a graph of your own business and how it compares with the competition. The goal is to find a sweet spot where your business is perceived as unique but still affordable.
Porter’s Five Forces
Porter’s Five Forces is a type of competitor analysis framework based on the competitive forces in an industry. Michael Porter, a professor at Harvard Business School, developed this framework.
The five forces are:
- Threat of new entrants
- Bargaining power of buyers
- Bargaining power of suppliers
- Threat of substitutes
- Rivalry among existing competitors
Porter’s Five Forces is a great way to understand the competitive landscape. It can help you identify areas where you have a competitive advantage and areas where you need to improve. It’s a useful tool for developing strategies to make your business more competitive.
The Boston Consulting Group developed the growth-share matrix in the 1960s. It’s a tool for evaluating a company’s business units or products. It examines a company’s business units on a graph using metrics like its market growth rate and relative market share.
There are four quadrants in the growth-share matrix:
- Stars: business units with high market growth and high market share
- Cash cows: business units with low market growth and high market share
- Question marks: business units with high market growth and low market share
- Dogs: business units with low market growth and low market share
The goal is to have more stars and cash cows than question marks and dogs. This means that your company will be growing and will have a strong market share. However, you’ll need to understand brand positioning before implementing this framework.
What Are the Benefits of Competitor Analysis?
A proper competitor analysis framework is imperative to the success of any business. Here are a few benefits of competitor analysis.
It helps identify market gaps. Competitor analysis can help identify gaps in your market. You can then take steps to fill these market gaps and make a killing.
It helps businesses create measurable goals. Competitor analysis can help your business create attainable goals. It also provides a framework for measuring progress to know how close you are to your goals.
It makes it easier to identify market trends. A proper competitor analysis framework can help you identify patterns and trends in the market. You can be on top of the latest developments and stay ahead of the competition.
Use a Competitor Analysis Framework to Get the Edge
Adopt a competitor analysis framework today and beat your competitors effortlessly. Choose a framework that aligns with your business model and particular niche. It’s okay to get professional help to implement these frameworks in your business.
Don’t forget to check out the other posts for more informative content.