Competitor Analysis - Definition & Meaning
What is Competitor Analysis?
Competitor analysis is the study and assessment of the strengths and weaknesses of the competitors so as to formulate strategies accordingly. With increasing competition in each segment, it is now not possible to ignore old as well as emerging competition. Every strategy, defensive or offensive, by a company should be in planned and developed keeping in mind the competition. Competition is one the forces in Porter’s five forces. It helps the management understand the market and the ongoing and future trends. It also helps in forecasting the future implications and results of a move taken now.
The following are the general steps:
- Define the industry one is operating in
- Define who exactly are the competitors
- Determine the targeted customer segment and their needs
- List out and analyze the key success factors
- Map each of the competitors with respect to the extent to which they rank in the success factors
- Find out the area where there is scope and competitors are lacking
The information about the competitors can be gathered through recorded data (published data, example press release, articles, reports), observed data (example pricing, campaigns, tenders, patent applications) or opportunistic data (example suppliers, trade shows, social network).
Using the information gathered through above sources, a profile of all major competitors could be prepared, which may include the presence, finances, product portfolio, patents, targeted customer segment, marketing strategies, pricing models used, operation related information and their corporate strategy.
Hence, this concludes the definition of Competitor Analysis along with its overview.
This article has been researched & authored by the Business Concepts Team. It has been reviewed & published by the MBA Skool Team. The content on MBA Skool has been created for educational & academic purpose only.
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