The Five C’s in relationship to Competitive Analysis

Customers:   We need to focus on the market demand, buyer behavior, price sensitivity, product usage, etc.  A customer has a plethora of products to choose from, which means that we have many decisions to make, and it will be up to us to determine what that customer needs and what, as a company, we are going to satisfy.  We will need to research benefits, costs, frequencies, quantities, and customer desires. 

Competitors:  We need to focus on the overall competitive environment, perform a competitive analysis, measure opportunities and threats, and evaluate market attractiveness.  Our competitor analyses can give us insight to what the other companies might be up to.  Although sometimes the methods seem to be arbitrary in nature, they appear to hold much value and make sense when it comes time to apply the numbers. But, we must keep in mind that we cannot follow competitors too closely because we could end up losing sight of our customers. 

Collaborators:   This would generally be outside help that the company may recruit or hire for assistance.  It also includes suppliers and other intermediaries such as distributors, retailers, wholesalers, representatives, etc.

Company:  How do we define our market share?  It can be done through market analysis, marketing strategy, and break-even analysis.  Does our company meet the customer’s needs?  Can our company meet the customer’s needs?  What do we need to do to gain customers and can we do it?  We need to figure out how our company compares to the other companies who are our primary competitors. 

Competitive advantage:  Do we have a competitive advantage?  If we don’t, then we need to figure out how to get it and maintain it.  What are the other companies doing to stay on top?  How are we going to define a competitive advantage?  I happen to agree with the Education Portal that suggests that marketing is not just sales.  It takes much more to develop a marketing strategy…but also one must remember to take action and implement! 

But, why would a company want to study their competitors?  Because management needs to know what each of their competitors is doing to understand the advantages and/or the disadvantages of the company.  As well, the understanding will provide a knowledgeable basis for development for future strategies and it will give management an overall understanding of the competitor's history.  Also in play is the aspect of the company attempting to make sure that their product and/or services are better than the competition and it may also impact future funding (for you company possibly receiving funds over the competition or vice versa).

So, what do you want to know about your competition?  These eight key areas would be very useful:

• Major Competitors – Who are they?
• Characteristics – What are the characteristics of your competitors?
• Strengths and Weaknesses – What are their strengths and weaknesses?
• Capabilities – What are their marketing capabilities?
• Environmental changes – How will the competitors respond to environmental changes?
• Marketing Strategies – How will the competitors respond to your company marketing strategies?
• Competitive Advantages – Are there competitive advantages within the marketplace?
• Changes – Will the competitive set change in the future?

By using the above steps as a guide, the company should also define and assess each key competitor by a general business assessment and a marketing capability assessment.  There should also be a thorough evaluation of strengths and weaknesses as well as an estimation of strategies and responses.

Articles

In the article, "The Hypnotic Danger of Competitive Analysis," the author states, "Anything is possible in today's wild world of business."  This could not be any closer to the truth.  anything indeed can happen in the world from unexpected bankruptcies like Kodak, which was one of the most well-known names in the industry.  [Kodak's revenue peaked at $14.3 billion in 2005 and has been sliding since, dipping to $6 billion in 2011.  (Daneman, 2012)]  Or perhaps we can use Mark Zuckerberg, the Harvard un-graduate who is now the king of social media as an unexpected success.

In the article, "What's the Competition Doing to You?" the author points out the , "Something is missing when companies focus internally and only indirectly consider the external competitive environment."  Kodak, did you get a chance to read that? Apparently, Mark and the rest of the Facebook crew did heed that type of advice, as they are still at the top of their industry.  If a company chooses to ignore the landscape and position the focus in the wrong place....ummm...Kodak, go ahead and finish the story.

In the article, "Mapping Your Competitive Position," the author has designed a way for companies to use a particular statistical analysis method for mapping of strategies.  it includes, but is not limited to, regression analysis, mapping and definition of the marketplace, and valuation of benefits.  The end result is not meant to be a cure-all or even a Band-aid.  It is meant to be used as a tool to assist in finding the correct strategies for the company.

Competitive analysis is important for any business.  A competitive analysis is designed to gain a better picture of what competitors are doing, what plans they may have, provide an understanding of the marketplace, define or refine strategic decisions, and provide clarifications regarding the nature of the competition.

Pharmasim

I have learned to make sure that you have all of your ducks in a row prior to making a decision.  Always, always, always look into the future and get as much information in the beginning that you possibly can.  I overlooked reports initially believing that they would be of no use and ended up that I needed them, especially for long term planning.

Daneman, Matthew. "Kodak files business plan, sees turnaround, growth in 2013." USAToday.  14 Aug. 2012. Web. 20 Apr. 2013.