Hello, let's discuss a competitor analysis.
A competitor analysis is a fundamental analysis in any analysis of strategy.
Very simply, it's an identification of your various competitors, and
then collecting information about their performance and capabilities and the like.
In the little table you see here is a simple way of recording some of this data.
Again, identify the focal firm that you're analyzing, perhaps your own firm, and
then list out some of your competitors.
Go out and collect information on them.
Perhaps, performance metrics.
If they're publicly traded companies, you might be able to find some information on
their revenues, and profitabilities, and the like.
Maybe dig a little deeper,
try to understand what are some of their capabilities?
What are their objectives and values,
getting to the mission-oriented piece that we've talked to previously?
And then finally, what is their strategy?
How are they positioning themselves?
What's their business model?
Now once again, on the surface,
competitor analysis seems relatively straightforward and simple.
In reality, it can be actually quite difficult.
The first step in any analysis is to then identify what's the industry?
Again, this might seem very straight forward but think about that in terms of
let's say Google, how would you define Google's industry?
The second step then is to layout who are their competitors?
Again this can be rather challenging.
Both you want to identify current competitors but
also try to identify who might become future competitors.
Take the automotive industry, for example.
If you're analyzing Porsche,
is it useful to do a full competitor profile on let's say, Kia?
Clearly, they're both in the automotive industry.
But maybe at the end of the day,
because of differences in terms of where they position themselves in the market,
you might not need to consider Kia as in great a depth as you might need to
consider someone else like Ferrari or another maker of luxury sports cars.
So once again, on the surface competitor analysis could be rather straightforward,
but at the heart of it there's a number of kind of fundamental questions you need
to ask.
I would suggest thinking about strategic groups.
Can you group various competitors by their similarity?
Maybe there's a set of companies in the automotive industry that are positioned
exclusively as luxury sports cars.
Maybe there's another group of companies that are diversified and
have both luxury sports cars and other cars as well.
Use this concept of strategic groups to then prioritize the various competitors
that you want to analyze, and once you have that prioritization
then you can spend more time focusing on those closer in competitors.
But keep your eye for out for those other competitors that may be a little farther
afield that may become more relevant in the future.