Unfortunately, playing in a blue ocean market where your offering is the only option for your customers is extremely rare. There are always going to be other companies vying for your customers’ money.
It is important to understand where, how and why these competitors do business. Identify their strengths and weaknesses and how they compare to your own. Using a simple Competitor Matrix allows you to quickly assess your opposition and recognize where your advantages and disadvantages might lie.
Ask the Right Questions
A quick scan of your competitors should answer the following questions:
- What is their main offering and how does it differ from yours?
- Why are they in business? Are they focused on shareholder return or social legacy?
- What is their business and pricing model?
- Is the competitor winning more business, hiring and growing? What growth trajectory are they on? Are they a multinational with enormous reserves or a tiny start-up scratching for resources?
- What does their team look like? Many staff across multiple disciplines, or a small number of highly specialized personnel? Do they have business development staff active in the market?
- Who are their key customers, and how loyal are they?
- How do they attract and retain customers? Do they have a proactive sales team hunting new customers? Are they marketing aggressively through social media or other channels?
- Do they hold significant market share?
- What is unique about their offering and how is this different to your unique selling points?
- Which points of difference between the two companies can you successfully compete on?
Compile Your Competitor Matrix
The answers will provide enough information to start assessing your competition. A quick way to do this is through the creation of a simple Competitor Matrix. Generate a series of attributes based on the most important questions above. Next, populate the categories for your organization and each of your competitors.
Using a traffic light system to denote strength and weakness when compared to your company, allows you to quickly visualize differences. For instance, RED signifies areas where they exceed your offering, while GREEN indicates areas where their offering is weaker. An example Competitor Matrix for a water consultancy is provided below.
| Your Company | Competitor 1 | Competitor 2 | |
| Product/Service | Water Consultant | Enviro Consultant | Water Consultant |
| Business Model | Specialized – mine dewatering, high fee | Quick, cheap, minimal reporting | Specialized Modelling, high fee |
| Financial Resources | Medium | High | Low, one-man band |
| Market Share | 20% | 30% | 5% |
| Growth | Strong | Strong | No Growth |
| Marketing Strategies | Word of Mouth | Aggressive social media, event sponsors, networking | Word of mouth |
| Strengths | Mining skillset Quality of outcomes | Fast reporting Low Prices | Water modelling leader |
| Weaknesses | … | Quality of reporting | … |
| Business Model | … | … | … |
Use Your Findings
Once completed, the Competitor Matrix will provide a broad indication of the competitor’s strengths and weaknesses in relation to your company. This allows competitive messaging to be formed for marketing, and it will also inform any conversations in which customers bring up competitors offerings.
The example Competitor Matrix above, while incomplete, gives insight into who the competitors are and how they operate. Perhaps the water consultancy in question needs to revisit the way they do marketing. In addition, competitor 2 has a very specific specialization and may be a good partner for a future alliance.
Importantly, the matrix can help guide decision making around changes to your company offering. It may highlight a weakness that needs to be minimized or strength to be reinforced. The competitive landscape is a crucial part of the Sales Ecosystem, and any changes in competitor information should be fed back into the company immediately.
Your Competitor Matrix
Take some time to think about your own competitors. Develop a list of key attributes and generate a competitor matrix. What insights does it provide?
As always I’m keen to hear your thoughts. Feel free to reach out via the normal channels.