In order to develop and refine your own positioning, it is important to understand your competitors’ positioning. The purpose of this article is to provide you with practical tools for analyzing your competitors.
What is Competitor Analysis?
Competitor analysis is the systematic examination of competitors’ strategies, service offerings, strengths and weaknesses. Ideally, we would like to have the same information about competitors as we have about our own agencies. Clearly, this ideal condition will never exist. It is surprising, however, how much information about competitors is available if one takes the time and effort to dig for it. A detailed examination of competitors will help you identify potential threats to your business and opportunities for differentiation.
Competitor Positioning Maps
One useful technique used in competitor analysis is called Competitor Mapping. A map is simply a graphic representative of competitors’ relative positioning along two or more dimensions. The dimensions should be attributes which allow you to make meaningful distinctions between competitors. In general, these attributes should reflect how customers perceive distinctions between competing agencies. Attributes of importance to leisure travelers when selecting a travel agency, for example, might include location, agent destination knowledge, range of vacation packages offered, price, hours of business, credit terms, and parking facilities.
Competitor mapping is a useful tool for summarizing information about competitors and displaying it in a way that aids understanding and decision making. It can help answer such questions as, “Why am I losing business to the agency down the street?” or “What new services or products could I offer which are not currently offered by a competitor?”
What Information Do You Collect?
In deciding what information to collect, remind yourself of the reasons for undertaking the exercise in the first place. You want to understand your competitors’ positioning, their strategies, capabilities, resources, strengths and weaknesses. An understanding of your competitors’ past action (strategies) combined with knowledge of their capabilities helps you predict future strategy and action. Such insights are invaluable in identifying threats and opportunities in your market and in formulating your own strategies.
Below is a checklist of the basic information you should have about your competitors. Accumulating this information over time will enable you to put together a comprehensive picture of a competitor’s situation.
Sources of Competitor Information
• Internet (Google, etc.)
• Trade publications
• Local newspapers
• Vendors (e.g., Airline, hotel, car representatives)
• Customers (and competitors’ customers)
Trade publications and newspapers are excellent ongoing sources of information. You should make it a habit to regularly clip articles about, or quotation from, competitors. Snippets of information which, by themselves which, by themselves, do not appear meaningful, can provide important clues to competitors’ philosophies, strategies and plans when analyzed as a whole.
Airline representatives have an excellent general knowledge of competitors which they will often share, providing that such sharing does not violate confidentiality requirements.
Customers can provide you with valuable market intelligence such as what a competitor is offering in proposals. Even a competitor’s customers will talk to you, if you approach them on the grounds that you want to understand what services they currently receive, so that you might offer more or better services. Customers are your best source of information for determining current positioning-both yours and your competitors’.
Employees are an often overlooked source of information. Some of your employees have worked for competitors at one time or another. It is not unethical to discuss competitors with employees, providing they feel comfortable doing so. In addition, don’t forget your salespeople-they are exposed to the competitor every day.
Gearing Up for Competitor Analysis
Competitor analysis is an ongoing task that requires some internal discipline. The first time through demands the most effort. After that maintaining competitor files is relatively painless. Following are some tips for “systematizing” competitor analysis.
Make Someone Responsible-Place responsibility for tracking competitors with a trusted lieutenant or take it yourself. Ensure that the responsible person makes the function a regular routine.
Develop an Intelligence Network-Cultivate contacts which can provide you with information which they read or hear. If necessary, consider using a clipping service.
Keep Files-Sounds obvious, but it is often overlooked. The true value of a competitor intelligence system will become apparent after a significant volume of data has been accumulated.
Competitor Information Checklist
• Size ($, location, employees)
• Market share and growth
• Business mix (commercial/retail)
• Customer mix (large accounts, small accounts)
• Consortia affiliation
• Carrier affiliation
• Ownership (private/public, family/corporate)
• Years in business
• Number of outlets
• Range (broad vs narrow, general vs specialized)
• Customer segments serviced
• “Brand” image
MARKETING AND SELLING
• Advertising (media, frequency, content/emphasis, spending
• Proposals, promotional material
• Sales force (how many, how good)
• Preferred vendors
• Target customers/market segments
• Recent new account additions/losses
• Number of employees
• Level of expertise
• Compensation/incentive systems
• Training programs
• Recruiting policies/practices
• Access to financing
• Over position
• Cost of operation
• Structure and reporting relationships
• Management skill, experience, depth
• Ability/willingness to adapt to change
• Management philosophy
• Succession plans
• Facilities (size, room for expansion, appearance)
• Automation (computers, phone system)
• Centralized vs decentralized reservations
• Capacity for new business
• Delivery systems
• Overall reputation and image