Competitor analysis: a part of your company's Competitive Intelligence

Competitors should always be part of the focus of the Intelligence Function. But how can we organise the surveillance of the competition? How well do you know your competitors? Do you have all the relevant ones identified? Do you watch them differently according to their classification?

In my - distant - days of running competitions we always considered the inside lanes privileged because, being further back on the starting line, you have a full view of what each of your competitors is doing and how far behind. Not being able to analyse what your competition is doing always leaves you at a disadvantage.

Competitor analysis requires identifying competitors first, and then analysing their products, sales, financial data, and strategic directions, to create a more effective and resilient strategy of your own.

Let us look at how to identify competitors, how to classify them, and how to approach competitor monitoring.

How to identify competitors

The first immediate step in building a good competitor list is to consult with the sales team. They know who the real competitors are that we encounter every day in the marketplace. We can do market research internally or hire a market research company, but it is the customers who decide who we are in close competition with, what products or companies they compare to when they go shopping. Our colleagues in the sales force are in constant contact with customers, and they have this information first-hand.

Beyond the known competitors and usual suspects, we enter the unknown field of intelligence blind spots: those companies that we should know and watch out for but have not identified. To find them, it is very useful to take advantage of the intelligent functions of solutions such as Antara Mussol, which will suggest who to keep an eye on, arguing their proposals to us.

Apart from the support of intelligent software, there is a whole list of public sources where we can identify competitors. These include:

• Local business directories in the markets we are targeting.
• If we are competing in an industrial environment and depending on the sector, it will be productive to go to customs databases, which tell us who is exporting or importing in a market.
• Conduct Internet searches of our product category in the target markets. The tools offered by search engines, which are normally used by SEO experts, can also help us. Not only search results will be of interest but also sponsored advertising suggested by search engines in reaction to our search.
• Read magazines targeted at your customers and keep an eye on customer events - the so-called watering holes - to find out about other competitors.

How to classify competitors

To analyse a company's competition, we must properly classify competitors, as this will allow us to organise our Competitive Intelligence in an effective way.

We propose you classify your competitors into 6 categories:

Direct competitors: Direct competitors are those that offer the same products and services for the same target market and user group, with comparable profit and market share growth objectives, and with a similar distribution model. Competitors that provide sales partners will almost all fall into this category.

Potential competitors: Potential competitors are companies that offer the same product to the same customer profile but target other geographic markets. But because of their strategy, company size or limited growth, they will not become competitors in the medium term.

Future competitors: These are potential competitors - since they are not yet direct competitors - but are much closer to our current market and are ready to enter it. For example, a multinational company that has not yet entered our local markets but could do so at any time.

Parallel competitors: These are competitors that address parallel markets or niches. For example, they have a similar core technology or product to ours but target a different customer segment or have little overlap with ours. Sometimes this is a specialisation or even a "non-collision" strategy, which may be transitory: these competitors could be direct competitors at any time, and so we need to keep a close eye on them.

Indirect competitors: These competitors are the big forgotten ones, and usually fall off the radar. They are companies that reinforce our competitors and share interests with them. They may be technology suppliers or companies that are upstream or downstream in the value chain but have alliances or joint projects with one of our direct competitors.

Competitors with a substitute product or business model: These companies alleviate the same pain for our customers but do so in a completely different way. For example, scooters for rent, the sale of urban bicycles, Uber/Cabify, taxis and public transport solve the need for urban mobility, but with substitute (or complementary, depending on how you want to see it) proposals.

Proper classification of competitors will bring us several advantages:

• To divide the general problem of keeping the competition under surveillance into parts, and to solve each part of the problem separately.
• Adequately targeting the competitor surveillance strategy, as we can focus intelligence on different targets (i.e., hypothesis design in Antara Mussol).
• Automatically assign different information to different members of our team, depending on their responsibilities.

How to keep an eye on the competition

When first defining what to watch out for, competitor research is usually at the top of the list. However, wanting to know everything about competitors is likely to generate too much information. Surveying the competition in a general way, without defining specific targets according to the ranking of competitors, will generate a lot of information that our colleagues will have to dive into to discover key signals in the market. We need to ask specific questions, which we at Antara call intelligence hypotheses, and which will direct our attention to what is important. We must avoid infobesity, which can lead to the failure of our Competitive Intelligence Function.

To avoid infobesity, we will disaggregate competitive intelligence focus into multiple specific hypotheses. These objectives will sometimes respond to the needs of the product management team and will be based on technological aspects. At other times, the information requirements will come from the marketing team, or from the C-level.

The objectives for competitor monitoring will vary according to their classification. For example, we will monitor when a parallel competitor enters our niche. This hypothetical event will automatically generate an alert, to which we should react by updating the classification of that parallel competitor as a direct competitor. An intelligent system such as Antara Mussol will be able to automatically reorganise itself and treat that competitor according to its new characteristic, applying the same intelligence objectives to it as to the rest of the direct competitors.

Intelligence on substitute competitors has recently evolved to focus on the differentiating factors that the emerging technology can offer. But not only technology: the radical evolution of business models can also generate a major disruption in our market.

All these sources of intelligence, necessary to develop a robust competitive strategy, can be modelled with a solution such as Antara Mussol, which will adapt to our changing needs as our competitive environment evolves.

By Miguel Borràs.

Credits: Photo by Nicolas Hoizey on Unsplash

Antara undertakes that the published content is created by its own team, customers, or partners. Antara never outsources content generation. The opinions of the authors reflect their own views and not those of the company.