“If I do successful competitive analysis, then I understand myself, the competition, an acceptable price, and the correct positioning, but I am not sure of the techniques for gathering the correct information.”
Competition in any form always seems to bring out everyone’s inner Ninja, and at least for me with Ninjas, comes Sun Tzu.
Regarding competitive analysis, it is vital to remember at least two of Sun Tzu's more famous teachings:
-To know your competitor, you must become your competitor.
-If you know the competitor and know yourself, you need not fear the result of a hundred battles. If you know yourself but not the competitor, for every victory gained you will also suffer a defeat. If you know neither the competitor nor yourself, you will succumb in every battle.
OK, so maybe it was an enemy, but competitor fits this situation a lot more…
To digress, competitive analysis is part of market sensing. Market sensing helps develop a relationship of understanding with the targeted external market. This includes your competitors within the market, the market forces and behavior, and the market’s perception of you. That is a rather large deliverable, specially sense it is unique in every situation. The practice of market sensing incorporates many different information gathering techniques that can be sorted into three distinct groupings; market analysis, customer satisfaction, and competitive analysis. Competitive analysis being the method that helps to determine the acceptable price and positioning.
Like Sun Tzu stated, war like competitive analysis, is all about understanding yourself (or in this case your product) as well as its place in relation to the competition. The idea is to keep close tabs on your competition and stay ahead of the curve, like a Ninja. Comparing yourself to others is not about assimilation, Sun Tzu is not suggesting becoming something you are not, you want to be unique, but to be both exceptional and successful, you need to know what you are up against. Knowledge is power.
There are all sorts of software out there for the competition analyst, but the information gathering techniques behind such tools remains relatively stagnate. The more readily used are as follows:
- Win Loss Reports: A sales report that provides insight into why a business opportunity was lost or gained. What did the competition have or not have?
- SWOT Analysis: Typically used throughout new product development, this method is determining if the enterprise and market is ready by understanding your strengths, weaknesses, opportunities, and threats.
- Benchmark Analysis: This measures the quality, time, and cost of a practice or performance metric to others to identify gaps in the organizational processes.
- Driving Force Analysis: Identifying the current trends and key forces in the market place to provide insight into future product and service offerings.
- Fundamental Competitor Research: Determining the market size, value, and demand to compare to other market segments, so that better product and planning decisions can be made.
- Sales Force Reports: Leverage the market information coming into the sales division to make better development decisions.
- Partners, Alliances, Suppliers, Distributors: Use your partners as a source of competitive information.
To be a Sun Tzu Ninja, you need, above all else, to understand your product and know who the true competition is. From that point, you can use techniques to determine what works, their strategy, and then position yourself accordingly. Competitive analysis is an asset to any Enterprise, because it can be a source of inspiration for new ideas, new directions, and confirm or help to improve some of your business practices. So be the ninja of your market segment!