Competitive Analysis: Who are you up against?

It was the last day of Christmas break 2014. We’d played every board game in the house, reached level four of Harry Potter Quidditch, read approx. 47 books, fashioned together clothespin people, had a box-jumping competition and made cookies.

It was pouring outside so we were stuck in the house, searching for something to do. That’s when I turned to Netflix, the last hope of all parents on break. We turned on Nature: Swarm, a PBS show about animals that live in swarms. Swarms of all kinds: birds, sardines, mayflies and ick…mayflies.

We also watched in strange amusement the green Australian lorikeet, swarming with thousands of other lorikeets on a prairie. What I found most interesting was the way the lorikeets would keep themselves safe from predators at a time. Eagles and other birds of prey were out to get them – swooping into the swarm to catch one. The lorikeets, swarming in huge groups, would send off a “splinter” swarm to distract the eagles, while those in the remaining swarm dove down into the water to quickly get a drink. Then, the splinter swarm would rejoin the main swarm and the process would start over.

Lessons on Competitive Analysis

If the little lorikeet in the Australian prairie can be concerned about predators, competition for the same precious resources and livelihood they’re after, so can you. Those birds would be dead if they pretended they didn’t HAVE competition, and a lot of you are dead in the water because you’re not taking a serious look at yours.

No one likes to talk about their competition. Of course, you acknowledge it politely. Company B does good work; Company C just won that new contract you hoped for; you do better work than Company D so you don’t even pay attention to them. But when was the last time you actually mapped out your competition for the purpose of studying what you’re doing better, and where they’ve got a leg up on you?

Four Types Of Competition for Competitive Analysis

Direct Competitor

Competitors that do exactly (90%+) what you do, they share technology, customer base, geography and value proposition with you.

Category Competitor

Competitors that have a similar offering or value proposition and share your customer base but execute differently.

Substitute Competitor

Things that your customers can do to obtain a similar value proposition by using a service not related to you or your competitors offerings.

Indirect Competitor

Things that compete for your customers attention and time that are not related to the value proposition you offer.

Competitive Analysis 101

The structure is as follows:

  1. Spend 10 minutes listing companies in each zone
  2. Return to each zone and spend 5 minutes highlighting the top 3 and top 1 competitor in each
  3. Briefly describe why the top competitor was chosen in each zone, as well as their strengths and weaknesses

When you’ve mapped out their strengths, compare it your own. Where they’re strong, you have room for improvement, Look at their weaknesses. Capitalize on those to differentiate yourself.

So, what do your competitors have on you? Where do you have a leg up? Let em know in the comments.

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