Competitive Analysis

Whether you are a small or large business today's global economy requires an ongoing effort to remain competitive.  Those organizations who believe that they have a significant share of the market and feel like there are no immediate threats suffer from competitive myopia, a condition where organizations make the mistake of solely focusing on themselves and not necessarily the market which they are in.  Competitive Myopia can cripple a company and have immediate impacts on their human and financial capital.  To avoid this condition a company must perform regular competitive analysis and evaluate their position in the market. 

When performing a competitive analysis a company will identify, assess and select its key competitors.  Let's have a look at each: 

 1) Identifying the company's competitors

  - here a organization must look at their direct and indirect competitors.

  2) Assessing competitors' objectives, strategies, strengths and weaknesses, and reaction    patterns 

   - here organizations will want perform a SWOT analysis of themselves as well as their 

   competitors.  

  - when performing a SWOT analysis the strengths and weaknesses are an internal evaluation  which can include customer service, retail support and product design to name a few.  While the opportunities and threats are external to the company.  An opportunity can be geographic expansion for the business and a threat could be changes to gov't policy which could potentially limit the company's profits. 

3) Selecting which competitors to attack and avoid 

- companies must be very careful here as they do not want to attack a company who has a superior product or service when compared to their own.  A company should focus attacking companies who they have a clear advantage over in regards to the particular product or service. 

Above is a quick overview of the competitive analysis process which can help organizations avoid losing share of the market. In my next post I will review what the 4 competitive positions are and which strategies each position uses.