It is received wisdom to keep friends close and enemies closer, but precious few companies really know their competitors’ strengths and weaknesses. Many organisations simply don’t bother to find out what they are.
This failing can have negative consequences for your marketing communications. Unless you note how rival companies, brands or products are positioned, you have no framework in which to differentiate your own. And unless you know what segments others are targeting or what messages they are communicating, you are basing your own marketing decisions on a hunch. That’s a big risk to take.
A simple first step
Alongside intelligence on your competitors’ financial strength, partnerships, products, prices, distribution channels, and relationships with customers, intelligence on your competitors’ communications can give you a strong foundation for any communications effort, be it a rebranding, a public relations campaign, customer publishing, advertising or sales collateral.
For companies that do not set aside a budget for marketing research, the good news is that this doesn’t have to be an unwieldy and time-consuming project. A short, focused project that looks at your competitors’ communications is a valuable exercise that can give you knowledge to inform decisions. Competitor analysis should be an ongoing process rather than a one-off: it is best to update your information annually, or more often if you operate in dynamic markets.
If your competitors publish news, you can benchmark their releases to reveal a host of information, including:
- News frequency
- Key messages
- Identity of key customers and partners
- Spokespeople and the conferences they attend
The better your competitors are at planning and executing their marketing communications, the easier it should be for you to determine their positioning and direction. For example, is there evidence of market positioning or development that may herald a future product announcement? If a competitor is talking up an industry issue, it may be preparing to enter a new market.
A thorough analysis can help you to use your communication channels more effectively and also predict competitors’ responses to your activities.
Strategic decision making
You can gain a lot from a tactical review of comparative messaging without having to revisit broader strategic issues. However, with the help of a few simple models and frameworks, analysis of trends and patterns can help you to determine a competitor’s strategic direction. Michael Porter’s Five Forces model is the classic framework for placing competitors in their industry context. It considers buyer and supplier power, barriers to entry, threat of substitution by other products and services and issues that affect intensity of rivalry.
Performing a SWOT analysis on your own organisation and your main competitors helps you to identify generic strategies and potential for differentiation. This can be a powerful tool if executed properly. In one project that we carried out, we successfully predicted the demise of one of our client’s key competitors. It became apparent that the competitor had no clear direction: its conflicting messages suggested that it was confused and ‘stuck in the middle’ from a strategy viewpoint. Six months later they ceased trading
The service that we offer includes an independent study and comparison of a range of companies’ communications to determine what messages and brand values you and your competitors are projecting to customers and prospects in your markets. We keep the research project short, sharp, and relevant to your immediate needs. For each of your key competitors and for your own company, we:
- Review served market segments
- Perform a target audience analysis
- Explore key communications objectives
- Explore projected differentiation
- Explore key product and service attributes
- Take a look at web strategy
A bottom-up approach
The competitor information that we collect is publicly available, obtained through ethical means – largely through web research. Essentially, the approach that we take is bottom-up: we review marketing materials, key messages, partners, frequency and content of press releases, positioning, web rankings and other salient materials to identify each player’s positioning. If appropriate, we also develop a strategic view of where each company is now and where it thinks it’s going. We use simple but effective tools to analyse and interpret the information, providing a strategic inference on each competitor’s strategy and direction.
An outside view
Providing you have the expertise, it is of course possible for you to perform your own competitive communication analysis in-house. However, an outside independent view is more likely to provide a straightforward and substantiated view that will help you and your management team to see things in a different light.