What is a competitive landscape?
A competitive landscape is a term used to describe all the options that the customer could choose to opt for other than your product or service you provide. These options include the products or services that your customer provides or other types of solutions.
The competitive landscape refers to the nature of competition to your business. Various factors such as the number of competitor companies, their sizes, their strengths and weaknesses, vision and core values among others come under the competitive landscape.
But, only knowing your competition isn't enough. You need to find complete data about them and then act accordingly. For this, a competitive landscape analysis is needed.
What is a competitive landscape analysis?
A competitive landscape analysis is a research of all the competitors in your competitive landscape to understand what they are doing. Basically, when you are interested in knowing who your competitors are and how they are performing in the market, you’d perform a competitive landscape analysis. This analysis gives you all the information that you need to know about your competitors.
This analysis helps you understand who you’re competing with as well as how you fare against them. The process of doing this analysis is a dynamic one and not static. The reasons behind this are that you could have new competitors all the time and existing competitors could also make improvements.
Through a competitive landscape analysis, you come to know how your competitors are covering processes in product development, sales, marketing, and any other necessary ops. This is done in a very structured way. You’d be equipped with information such as the strengths and weaknesses of the companies, their strategies, products and services.
Understanding where you presently stand can give you a good idea of where you have got to get. After collecting this data, you can make improvements to your firm accordingly. We’ve covered the key topics that you should include in a competitive landscape analysis and how to perform it in the below sections.
Topics that are a must in your analysis
- Who are your competitors?
These are the companies within your industry that provide the same basic services or products as you do.
- What products or services do they offer?
This would cover the various offerings that the companies determined above have along with the rates charged for these products or services.
- The competitors’ strengths and weaknesses
The topic is self explanatory and would consist of the strong and weak points of your competitors.
- Strategies that your competitors are employing to hit their targets
This would cover the various initiatives under the competitors sales, marketing and other vital operations.
- Overall market outlook
This part involves understanding what your target market is looking for and what products and services are sold in a higher number.
Types of competitors
In the above section, we’ve spoken about identifying your competitors. However, note that these competitors can be divided into a number of different segments and you might tend to miss out on some of them. Overlooking or underestimating any competitor could be a big mistake. To make it simpler, here is how you can classify your competitors:
These are companies which serve the same product/ service that you offer to the same audience. You compete with them head-to-head for sales and market share and your potential customers probably know about them, too. Consider if your product or service is a food delivery app in a particular area, other food delivery apps serving in the same area are your direct competitors.
These are companies which either sell the same product to a different audience, or sell a slightly different product satisfying the same need. You are not head-to-head directly. Companies selling the same product in different locations can be considered here.
These are companies that aren’t actually your competitors, but for some reason the public assumes them to be. For example, if your company and another company’s page pops up in the search results for a term relevant to your product, it’s likely that the other company may be perceived as a competitor. This could happen even if your offerings are entirely different.
Aspirational competitors are those which you’re not competing with at the moment but you admire the work they do and there is a probability of future competition.
Types of Competitor Landscape Analysis
Some of the types of Competitor landscape analysis you could perform are:
- The SWOT Analysis
SWOT stands for Strengths, Weaknesses, Opportunities, Threats. As these terms suggest, you’d be classifying various factors about your competitors in separate SWOT analysis. You’d then compare it with your own SWOT analysis.
- Porter’s Five Force Analysis
This is done by splitting factors about the industry you function in, into five segments. These are new entrants, buyers, suppliers, substitutes and competitive rivalries. You’d build on each element and identify how competitive your market is as well as your chance for getting profits.
- Strategic Group Analysis
In this one, you’d identify the strategy your competitors use to sell their product or service. You can then place yourself relative to these competitors and identify what you need to do.
- Growth-Share Matrix
The growth share matrix groups your products into four categories split on performance. For example, high growth, high market share would be one; then high growth, low market share and similarly the other two. Once you identify the best products this way, you can choose to invest in just that.
- Perceptual Mapping Analysis
This framework visualizes where your product fares against its competitors. Any two factors among quality, price, accessibility, delivery, etc. are used to draw a comparison. You get an idea of how your product will be received in the market and any changes you need to make.
How to create a competitive landscape analysis?
Although the exact steps you follow would be more complex, this is an overview of how you can perform a competitive landscape analysis. Before starting, make sure you are doing this in an organized way on a spreadsheet or a similar tool.
- Identify your competition
Make a list of about 10 competitors and categorize them into direct, indirect, perceived and aspirational.
- Analyze their product offering in detail
Look closely at all the products and services that they have to offer. If they have a website, analyze how things are marketed there.
- Check out their marketing strategy in detail
Find out where your competitors are focusing their marketing efforts and also how the customers are responding to it.
- Find out about market positioning
In this step you’d evaluate the competitors’ product and pricing options.
- Determine how these competitors differ
Try to identify how your competitors try to create a unique position for themselves in the market.
- Obtain data on employees
Hiring trends enable you to identify the competitor’s next move.
- Analyze based on the data you’ve collected
You could use any type of competitor landscape analysis framework or find your own way. Through this, determine how your competitors fare and where you can improve to sell your product better.