COMPETITOR ANALYSIS

Part of the VFQ Product Management Action-Learning Course

ContentsOverview

Methods

• Competitor Comparison• 2x2• Strategy Canvas

OverviewCompetitor analysis is an important process to help you explore and makes sense of the landscape you’re operating in. Like most of the tools and techniques we use, it’s not something to be done once and left, but is a layer of insight that should be revisited when making more strategic decisions about which products to build and which features to include.

By analyzing the strengths and weaknesses of not just current but potential competitors too, you can build a better view of threats and opportunities in the market.

Here we detail three methods to take you from benchmarking to more detailed ways of analyzing the competition.

Competitor Comparison: OverviewOne of the simplest methods of understanding the competitive landscape is to simply capture in a table some key information about your competitors.

You can use a table to list the key success factors for your industry as well as competitor's' product or service features.

It provides a visual and easy to reference source of information that may highlight strengths or weaknesses in their business.

Competitor Comparison: Music Streaming ServicesS Number of

usersPrice Family

Price PlanStudent

DiscountSongs Offline

PlaybackShare

music/playlists

Collaborative

playlists

Watch musicvideos

Listen to podcasts

Read song lyrics whilst

listening

See what friend’s

are listening to

Consoleapp

Desktop app

Spotify60 million

(free)15 million

(paid)

$10/month $5/monthper person $5/month 30+ million ✓ ✓ ✓ ✗ ✓ ✓ ✓ PlayStation

4 ✓

Apple Music

15+ million(paid)

$10/month $15/monthfor up to 6

people✗ 30+ million

✓✓ ✗ ✓ ✓ ✗ ✗ ✗ ✓

SoundcloudGo

175m (free)? (paid)

$10/month ✗ ✗ 125+ million ✓ ✓ ✓ ✗ ✓ ✗ ✓ ✗ ✗

Tidal 3 million(paid)

$10/month$20 /month HiFi Audio

50% off per person 50% off 40+ million ✓ ✓ ✗ ✓ ✗ ✗ ✗ ✗ ✓

GooglePlay

Music? (paid) $10/month

$15/month for up to 10

devices✗ 35+ million ✓ ✓ ✗

With YouTube

Red✓ ✗ ✓ ✗ ✗

Amazon Prime Music

10 million(paid)

Included in $99/year Amazon

Prime Membershi

p

✗

$49/year Amazon

Prime Membershi

p

1+ million ✓ ✗ ✗ ✗ ✗ ✓ ✗ ✗ ✓

Competitor Comparison: Instructions1. List your competitors.2. Identify the key factors and main features of the each competitor's solution.3. Input information regarding each factor and feature availability (detail feature if

possible)4. Add information around competitiveness, market share and any other

performance measures.

After doing this, you should have a better understanding of who your competitors actually are and how they are positioned in the market. You also have a good view with which to compare them and your own organization or product.

2x2: OverviewThe 2x2 diagram exercise allows you to identify how different competitors are positioning themselves and make visible, the area where you are or will be competing. Additionally, it also helps uncover opportunities and potential untapped markets. It is a simple and accessible tool, useful in multiple settings.

2x2: Online Storage ProductsEnterprise Focused

Consumer Focused

Difficult to use Easy to use

A 2x2 like is useful to identify whether you’re operating in a crowded market andcan also help you pick areas to develop a competitive advantage and differentiate yourself from the competition.

2x2: Instructions1. List your competition2. Create a 2x2 table3. List a couple of key variables (minimum of 6)4. Pick two variables, one for each axis.5. Place your competitors on the table - if you are not uncovering any kind of differentiation

between competitors/products you might consider picking different variables.6. Once you’ve uncovered differentiation, see where your organization/product can fit.

Tips: Picking the two variables is the perhaps the most difficult part. Experiment with variables until you feel you have find the right two that give you a better understanding of the landscape and ways to create differentiation.

Strategy Canvas: OverviewThe Blue Ocean Strategy provides a multipurpose set of tools that allows us to better understand the competitive landscape and to create new market spaces.

One of the simplest and most powerful tools that the framework provides is the Strategy Canvas.

This tool helps you to quickly visualize the the way your main competitors are currently positioning themselves through an understanding of where their efforts are being placed, and according to the main factors that are driving the industry.

Additionally, you can understand how differentiated your offering is from the rest of the market. This makes the strategy canvas a great tool to develop a visual and meaningful competitors analysis.

Strategy Canvas: Cirque du SoleilHIGH

LOW

Cirque du Soleil

Ringling Brothers

Smaller Regional Circus

Price

Star Performers

Animal Shows

Aisle Concessions

Multiple Arenas

Fun & Humor

Thrills & Dagger

Unique Venue

Theme

Refined Viewing Environment

Multiple Productions

Artistic Music & Dance

How Cirque du Soleil positioned themselves to become market leaders

EliminateStar PerformersAnimal ShowsAisle ConcessionsMultiple Arenas (*each show is it’s own business)

ReduceThrills & Dagger

RaisePrice

CreateThemeRefined viewing environmentMultiple productionsArtistic Music & Dance

Strategy Canvas: Instructions1. Identify your competitors - make a list of your competitors (minimum of two), either individually or by

cluster.2. Identify competing factors - identify which factors (a minimum of 7) your customers value the most

when choosing a product or service offering.3. Map your positioning vs. your competitor – on the vertical axis draw a scale from 0-10 (low to high)

and place a dot on where you are – or your proposition is – against each factor. Use the same board and repeat the exercise for your competitors. Note: higher is not better or worse, it’s just higher.

4. Analyze the map and think about how you can achieve competitive differentiation.

The first three steps give you an overview of how your offering compares to your competition. It is a great way to quickly visualize it is a great complement to other competitor analysis methodologies.

Step four can help you reshape or improve your offering and links directly to the concept of the Blue Ocean Strategy, which is to create uncontested market spaces.

To do that, analyze your current Strategy Canvas and answer the questions from the ERRC Grid.

ERRC GridELIMINATE RAISE

REDUCE CREATE

Which factors that the industry has long competed on should be

eliminated?

Which factors should be raised well above the industry’s standard?

Which factors should be created that the industry has never offered?

Which factors should be reduced well below the industry’s standard?

The Eliminate-Reduce-Raise-Create (ERRC) Grid developed by W. Chan Kim and Renée Mauborgne is a simple matrix like tool that drives companies to focus simultaneously on eliminating and reducing, as well as raising and creating while unlocking a new blue ocean.