Competitor Analysis... Keeping Ahead Of The Game

Transcription

1 Tpic: Cmpetitr Analysis Published in CAD Dealer Magazine Cmpetitr Analysis.... Keeping Ahead Of The Game A recent survey f businesses in the USA n their apprach t understanding the peratins f their cmpetitrs identified tw categries f cmpany, eagles and striches. Eagles analyse their rivals, and assume these rivals are ding the same; and striches, well, they're just cntent t fcus n their wn affairs. Few cmpanies can survive withut sme basic knwledge f their cmpetitrs, such as the prducts r services they sell and, crucially, the price they sell them at. Yet relatively few small and medium sized enterprises invest in a thrugh analysis f their rivals, mainly due t a lack either f resurces r an appreciatin f hw this can be carried ut. As awareness f the benefits f gathering this infrmatin grws hwever, mre and mre businesses are investigating hw t g abut it. What Is Cmpetitr Analysis? Cmpetitr analysis ('CA') is the in-depth study f ne r mre rivals (r ptential rivals) t gather infrmatin n their structure, strategies, strengths, weaknesses and future directins. This infrmatin is then used t make infrmed decisins abut everything frm marketing t lng term business strategies. CA ges beynd the type f B2B research that mst cmpanies will already be engaged in t varying degrees, such as reading trade papers r btaining rivals' sales literature - althugh the systematic gathering f infrmatin frm published surces is an imprtant element f it. It invlves extracting and piecing tgether the inside infrmatin yur cmpetitrs really dn't want yu t get yur hands n. The mst effective technique t achieve this is the skilful interviewing f peple cnnected with the cmpany cncerned - withut alerting them t yur mtives. It's a highly specialised discipline, and while increasing numbers f very large cmpanies are emplying their wn in-huse cmpetitr analysis prfessinals, fr the vast majrity f businesses the mst practical ptin is t use specialist agencies. CA Or CI? Mst f the literature n this tpic refers t 'cmpetitive intelligence' ('CI') - in many ways the terms CI and CA are interchangeable. CA can be viewed as a highly specialised subset f CI, as the latter cvers a brader spectrum f activity t mnitr aspects f cmpetitive envirnment including general industry, ecnmic and regulatry trends. Pel Huse, 35 Statin Square, Petts Wd, Kent, BR5 1LZ, United Kingdm Tel: +44 (0) inf@business-advantage.cm Web:

2 Why Bther? There are varius appraches t gaining and maintaining the edge ver yur cmpetitrs. At ne level this can mean ensuring that yur prducts and services are actually better than theirs. At anther it can mean ensuring yu are better at marketing yur prducts/services, even if they are very similar t thse f yur rivals. But succeeding in these areas requires yu t actually knw hw yur cmpetitrs are perating. Certain basic infrmatin abut them - their prducts/services, list prices and the features/benefits they are pushing t clients - can be btained relatively easily. This at the very least gives yu a starting pint fr psitining yur prices apprpriately, and setting ut yur selling pints. But it stands t reasn that the mre yu knw abut yur cmpetitrs, the better equipped yu are t stay ahead f them. This is particularly true f CAD, which is a mature market where Resellers need t be innvative t remain cmpetitive. Hwever, if yu try t dig ut inside infrmatin yurself n cmpetitrs' strengths and weaknesses the barriers can g up; fr example it is simply nt in the best interests f a ptential custmer t tell yu the exact price they paid fr the prduct r service f yur clsest rival. Independent, external B2B research is usually mre effective in prducing accurate, unbiased respnses. If......yu had access t infrmatin n yur main cmpetitrs n sme r all f the fllwing areas: structure, strategy, mtivatins and bjectives financial and perating analysis, eg. return n sales, grss prfit margin etc. marketing strategy, eg. messages and tactics, price flexibility, new services r prducts, distributin mdels used, names f key custmers market perceptin, eg. why their custmers buy frm them and their satisfactin levels i. e. what are yur cmpetitrs' best practices and key strengths? future directins Pel Huse, 35 Statin Square, Petts Wd, Kent, BR5 1LZ, United Kingdm Tel: +44 (0) inf@business-advantage.cm Web:

3 ... then yu wuld be in a strng psitin t: understand their missin and bjectives and develp yur wn accrdingly develp realistic sales targets thrugh understanding the scale f their peratins and turnver implement prduct/service imprvements t cunter strengths/weaknesses and innvatins in their prduct prtfli psitin yur prices apprpriately target yur direct sales plicies thrugh knwing their distributin channels ffer cmpetitive discunts and payment terms develp an apprpriate marketing cmmunicatins strategy in respnse t their messages and where they put them acrss strengthen yur prducts/services and marketing strategy by adpting and adapting the best practices bserved in yur cmpetitrs' armury. Nt in a blind 'cpy-cat' way, but creatively shaping thse practices t yur wn circumstances In the CAD market, price tracking studies might prve particularly valuable t enable Reseller t keep abreast f price trends. Similarly an analysis f cmpetitrs' added value services (such as engineering drawing bureaux r e-cmmerce facilities) will pinpint areas fr service imprvement. This is what CA is all abut - enabling yu t significantly imprve yur wn perfrmance by really targeting resurces where they will have mst impact. Hw Is It Dne? The straightfrward element f CA invlves gathering infrmatin frm publicly available surces; prbing beynd this hwever needs t be cnducted very carefully t avid alerting a cmpetitr t yur interestand intentins. Befre yu decide t invest in any such analysis yu shuld ask yurself sme key questins. What d we need t knw? What d we already knw? Hw much will it cst t get it? What culd it cst nt t get it? Pel Huse, 35 Statin Square, Petts Wd, Kent, BR5 1LZ, United Kingdm Tel: +44 (0) inf@business-advantage.cm Web:

4 Answering the questin 'what d we already knw?' will help t infrm the parameters yu set fr the first questin. It is imprtant at an early stage t make sure yu have pulled tgether all the existing knwledge yu have gathered frm trade papers, websites etc, plus the titbits gleaned thrugh cnversatins with suppliers, sales peple and s n - if yu decide t bring in an utside specialist yu dn't want t pay fr infrmatin yu already have. While there are additinal surces f recrded infrmatin that can be explred (such as cmmercial databases), speaking t peple with inside knwledge is the mst effective way t penetrate beneath the facade f the cmpetitr. Accrding t the infrmatin yu want, these might include actual emplyees, ex-emplyees, industry experts, suppliers, custmers and s n. Gathering infrmatin in this way is fraught with difficulties, and requires a creative mind and lateral thinking t vercme bstacles and avid detectin. CA prfessinals will nt give away the tricks f the trade easily, but skilful interviewers are able t structure their apprach and frame their questins in such a way as t elicit huge amunts f invaluable infrmatin. Case study 1. Cmpany A, the market leader in sales fr a type f cmputer hardware, was cncerned ver Cmpany B s aggressive pursuit f its market share. As a specialist agency, The Business Advantage Grup Plc was cmmissined t investigate Cmpany B s peratins in several Eurpean cuntries, including their distributin mdels, prfit margins, strategies, strengths and weaknesses. Numerus peple were interviewed in the infrmatin gathering exercise including Cmpany B s custmer service persnnel, sales representatives, senir managers and telephnists. Their distributrs and resellers were als interviewed in depth. The resulting infrmatin and recmmendatins enabled Cmpany A t reshape its marketing strategy, and re-structure its pricing matrix t cunter Cmpany B s strengths and target their perceived weaknesses. Cmpany A has since started t see an increase in their market share. Pel Huse, 35 Statin Square, Petts Wd, Kent, BR5 1LZ, United Kingdm Tel: +44 (0) inf@business-advantage.cm Web:

5 Case study 2. A leading telecmmunicatins manufacturer wanted a better understanding f six f its main cmpetitrs. A detailed study was carried ut by Business Advantage which examined the fllwing areas fr each cmpetitr: cmpany verview, structure and strategy financial and perating analysis current prduct range new prduct develpments key service prvisins pricing structure quality issues market perceptins distributin and sales strategy marketing cmmunicatins strategy and tactical implementatin verall strengths and weaknesses With an accurate assessment f their leading cmpetitrs, ur client re-shaped sme fine pints f its verall marketing strategy and then implemented plans aimed specifically t cunter cmpetitive strength and explit weaknesses. The utcme? Increased revenues and an enhanced market psitin. Ethical Questins CA shuld nt be cnfused with espinage; almst all the infrmatin needed can be gathered by examining published surces, interviewing r ther legal, ethical methds. There are certainly grey areas, bth between what culd be cnsidered ethical and nnethical, and legal and illegal - but the cnsequences f stepping ver the line can be severe in terms f business reputatin and punishment by law. Nt that that prevents sme cmpanies frm engaging in imprper practices; last year in the USA the FBI investigated hundreds f cases under the Ecnmic Espinage Act. The Sciety f Cmpetitive Intelligence Prfessinals (SCIP), set up in the USA but nw with a branch in Lndn, was established with the gal f prmting CI as a discipline bund by a strict cde f ethics. Pel Huse, 35 Statin Square, Petts Wd, Kent, BR5 1LZ, United Kingdm Tel: +44 (0) inf@business-advantage.cm Web:

6 S Wh's Ding It? As disciplines, CI and CA riginated in the USA, and mst f the new ideas and supprting technlgies are cming frm there. 'The UK and Eurpe are lagging behind in terms f the numbers f cmpanies actively engaged in analysing their rivals', explains Annemarie Jag, EMEA Knwledge Manager and CI prfessinal fr Arthur Andersen. 'Mst cmpanies are still just waking up t the many justificatins fr putting resurces int Cmpetitive Intelligence. SCIP has a lt f members frm the pharmaceutical and telecmmunicatin industries, but representatin in the IT sectr is grwing.' Annemarie feels this trend will cntinue: 'With business becming ever mre cmpetitive and glbal, cmpanies are recgnising that in rder t gain and maintain cmpetitive advantage, they must understand what their cmpetitrs are ding and frmulate a strategy that explits their rivals' weaknesses and cmpensates fr their strengths.' The Final Wrd... N literature n CI r CA is cmplete withut reference t the wrds f Sun Tzu, the great Chinese military strategist f the 5 th Century BC. His pearls f wisdm n the art f war have been adpted universally by business peple seeking supremacy ver cmpetitrs. 'If yu are ignrant f bth yur enemy and yurself, then yu are a fl and certain t be defeated in battle. If yu knw yurself, but nt the enemy, fr every battle wn, yu will suffer a lss. If yu knw yur enemy and yurself, yu will win every battle.' Fr Further Infrmatin: Tel: +44 (0) ; Fax: +44 (0) inf@business-advantage.cm Fr further infrmatin abut SCIP, please cntact the SCIP Office, 15 Greycat Place, Lndn SW1P 1SB, tel: , website: Pel Huse, 35 Statin Square, Petts Wd, Kent, BR5 1LZ, United Kingdm Tel: +44 (0) inf@business-advantage.cm Web: