Who are our competitors?
The first stage of competitive analysis is to identify our competitors. This is not as difficult as it might seem. Although we may have many competitors, it will usually be the same few that we meet in the final stages. Most suppliers have five, or fewer, serious competitors.
Organizations usually choose suppliers because
- they are an existing supplier
- they have been recommended
- they have found them through a google search
- they have a general invitation process.
Generally, the suppliers that make it through to the end, have a similar profile to the purchaser, in their aspirations for quality, price, credibility and capability. The world’s view of an organization’s profile is it’s Brand Image.
Most organizations spend a lot of time and money promoting their brand image. Brand images have inertia. They are based on customer perception and are built over a number of years so, unless something dramatic has happened, these profiles will be relatively stable in the eyes of it’s customers.
So if our prospect is focused on high quality, they are more inclined to choose a supplier who values quality themselves. If our prospect has a broad capability, then they understand the benefits of being able to manage different projects at the same time, and may not have realized the benefits of agility that niche suppliers can offer.
We will find that, because our competitors’ profiles are like ours, we keep coming across the same competitors when we bid for new projects. This is a great benefit because we can start to put together a competitive analysis that identify strengths and weaknesses that we can use to our advantage.
How many competitors?
There is a balance to be struck in the number of competitors we include. Too many, and we may start to lose heart before we have found enough information about them all. Too few, and we may miss our main threat.
How do we find out about them?
There are many ways we can find this information:
– Our customers
– Our colleagues
– Our competitor’s website
– Social media, LinkedIn
– Search the internet for companies that provide similar solutions to ours.
Now whittle them down by industry sector, geographical location, company size and so on, to get to the last five. When we have compared them, we can see which one compares most closely with our lead. We will take that one as our target. This process doesn’t have to be exact. As long as we get a near match, we can begin to build a winning competitive strategy.
We will match these scores with our potential customers. The closer the match, the more likely that the competitor is a serious threat to us.