Competitor analysis

Which companies are relevant for the competitor analysis?

1. Today's main competitors

These are mostly the most important players in the industry - the number is mostly in the single digits. Think about which criteria are important for you. Define these criteria and rank/filter your competitors according to them. Finally, reduce the number so that only the most important ones (max. 5) remain. These will then be analysed in detail.

2. Potential competitors from your own industry

Companies that are either locally strong or have high growth rates should also be considered. Are there companies that are currently still small but have amazing growth rates? Did you often lose to a particular competitor during the last sales talks? Small companies in particular are more flexible than larger units and can shake up a market with new products and services. It is important that you do not overlook them.

3. Companies from outside the industry that can become competitors

There are different reasons that motivate companies to enter their industry:

- Market expansion: Companies that are not yet active in their geographical market can identify it as a growth market.

- Production expansion: If companies have a similar machine park and it is not used to capacity or the existing production is no longer profitable, the company can decide to manufacture products in your product category.

- Forward or backward integration: Current suppliers or customers may decide to broaden their value chain and manufacture or market their product category themselves. For example, ASUS has evolved from a supplier of well-known hardware manufacturers to a supplier of notebooks. Another example is food retailers who are making life difficult for their traditional food brands with their own brands.

- Buying up a competitor: A small competitor is bought by an M&A transaction, the financially strong buyer can strongly influence the market.

- Technological development: As industrial fields grow together and digitalisation enables new business models, companies encounter new competitors that they often never would have thought of. The automotive industry, for example, faces the challenge of regularly observing both energy suppliers (= filling stations for electric vehicles) and IT companies such as Google/Alphabet or Apple (= networking) as competitors. In order not to be dependent on Google's map service (Google Maps), for example, leading German car manufacturers have joined forces and acquired HERE.

What should be investigated in the competitor analysis?

The competitor analysis focuses on the strengths and weaknesses of the competition on the one hand, and tries to identify best practices that can be implemented in your own company on the other.

Strengths/weaknesses of the competition

When analysing strengths and weaknesses, we always work from three perspectives:

  • What are the strengths and weaknesses of your own company?
  • Where are the strengths and weaknesses of the main competitors?
  • Where do the customers see the strengths and weaknesses of our company compared to the competition?

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