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#4 - Why Marketing Fails? | Competitor Focused Research

Updated: Mar 2, 2020

“If you know the enemy and know yourself, you need not fear the result of a hundred battles. If you know yourself but not the enemy, for every victory gained you will also suffer a defeat. If you know neither the enemy nor yourself, you will succumb in every battle.”

Sun Tzu,

It goes without saying that understanding the competitive landscape is crucial to identifying competitors and succeeding in the market. A competitive analysis is a strategy where you identify major competitors and research their products, sales, and marketing strategies. By doing this, you can create solid business strategies that improve upon your competitors. For marketers, competitive analysis is an important part of their job description. Thus competitive research is an essential component of corporate strategy.

A competitive analysis framework is a model you can use to help shape how you go about researching your competitors. It helps you home in on specific information by giving a structure to guide your market analysis. Several frameworks are being currently used in the marketing industry. It is argued that most enterprises do not conduct this analysis systematically enough. Hence these firms are at risk of a competitive blind spot due to lack of robust competitive research.


Competitor Focused Research

Before initiating your analysis, it is of vital importance that you pinpoint and identify your competitor. A mere search on Google or Amazon can help you locate your customers. You can find the digital footprint of your competitor by exploring Social media content, Support Threads, Reviews, and Niche Organizations. Once identified, the next step is to determine the product or service they are offering. The final step is to determine the pricing policy, marketing, and promotional strategy, sales tactics, and social media engagement. It is highly significant that you determine the above-mentioned aspects before you get into your analysis.

In the preceding section, we would have a detailed look at the five most popular competitive frameworks, their procedure and the mindset that you need to possess before conducting the analysis.

Competition Grid

A quick and easy way to compare your product or service with similar ones on the market is to make a competition grid. Down the left side of a piece of paper, write the names of four or five products or services that compete with yours. To help you generate this list, think of what your customers would buy if they didn't buy your product or service. Across the top of the paper, list the main features and characteristics of each product or service. Include such things as target market, price, size, method of distribution, and extent of customer service for a product. For a service, list prospective buyers, where the service is available, price, website, toll-free phone number, and other relevant features. A glance at the competition grid will help you see where your product fits in the overall market. Here is a simple example of the competition grid.

SWOT Analysis

SWOT stands for strength, weakness, opportunity, and threats and this analysis is used to asses these four aspects of your business. This analysis caters both the internal (Strength and weakness) and the external (Opportunity and Threat) factors influencing your business venture. SWOT Analysis is very effective when you need to cover a large scope.

  • Strength - primarily refers to your competitive advantage which can range from your product strength or your strategic Strength. This includes your skilled team, technology and equipment, and even your financial strength.

  • Weakness - includes the negative factors that detract from your strengths, this can include but not limited to marketing, production and distribution problems.

  • Opportunity and threat - basically cover the external factors which are not entirely under your control such as government policy, prices of raw material and customer shopping trends. You can take advantage of opportunities and protect against threats, but you can’t change them.

For SWOT analysis to be effective, company founders and leaders need to be deeply involved. This isn’t a task that can be delegated to others. For best results, you’ll want to gather a group of people who have different perspectives on the company. Select people who can represent different aspects of your company, from sales and customer service to marketing and product development. Innovative companies even get input from their customers. If you’re running a business on your own, you may ask your friend who knows a little about your business, your accountant, or even vendors and suppliers to have different points of view. Here is an example of a SWOT analysis.

A SWOT analysis requires neither technical skills nor training thus it is fairly simple to conduct. Moreover, the analysis can be applied to a variety of domains form the evaluation of a product to a partnership venture. The analysis is fairly comprehensive in its approach since it caters to both the internal and external factors. The analysis incorporates qualitative and quantitative information from several sources that improve enterprise-level planning and decision making. Keep in mind that SWOT analysis entails a subjective process that reflects the bias of the individuals who collect the data and participate in the brainstorming session. The data input to the SWOT analysis can become outdated fairly quickly. Thus it is recommended that you starting with a new SWOT analysis every six to 12 months.

Porter's Five Forces

This framework examines the competitive market forces in an industry or segment. Strategic analysts use this model to understand the potential return on a new product or service. Not limited to only the actions of your competition, Porter’s model helps understand other forces in your environment, helping in adjusting your strategies to reduce or even eliminate these areas which may affect your ability to maximize the organization's potential. The analysis is based on five key elements; New Entrants, Buyers, Suppliers, Substitutes, and Competitive rivalry. According to Michael Porter’s model, these are the key forces that directly affect how much competition a business faces in an industry.

The Threat of New Entrants: The degree of ease for a competitor to establish a rival business in the vicinity.

  • Buyer(Customer) Power: The impact your customers have in your need to reduce pricing.

  • Supplier Power: The amount of power your suppliers hold and their ability to influence your profitability through pricing and potential discounts.

  • The Threat of Substitution: The possibility of your product or service being replaced by a substitute supplier.

  • Competitive Rivalry: The number of, and level of influence your competition has in the industry.

Once you have a basic understanding of the model the next step is the implementation of this analysis. The first step is to gather information on each of the five forces as shown in the figure below. Indicate whether each finding is in your favor or against and its effectiveness (High, Medium or Low). Analyze each finding and comment on the areas that will affect your operating position, regardless of whether it will enhance or decline your position. Focus on using this model to improve your position through strengthening a weakness, capitalizing on an opportunity, or creating a new strategy to combat a potential threat. Once done, the final step is to put forward your strategies based on your findings to achieve your competitive advantage.

This framework is useful when you want to analyze the competitive structure of an industry. The model is easy to apply and helps in assessing whether an industry is viable to enter. Porter's model is very effective when used in conjunction with other analysis tools. The model, however, is solely designed for industry analysis cannot be used for individual analysis.

Strategic Group Analysis

Strategic Group Analysis is a competitive analysis framework that lets you analyze organizations in clusters based on the similarity of strategy. By identifying the cluster your firm falls into for any given strategic dimension, you can get a sense of the impact of the different strategic approaches. Strategic groups can be created based on several dimensions:

  • Product Quality

  • Price Policy

  • Financial or Operational Leverage

  • Service

  • Size of Organization

  • Degree of Vertical Integration

  • Research and Development

Many times, groups are differentiated based on how they compete and where they compete within the industry. Make sure you use criteria, which are of high importance in terms of the behavior of your competitors. After the selection of evaluation criteria, it is useful to design a map to visualize the segmentation of strategic groups. The next step is to divide the companies into strategic groups. The companies which are closest to each other form a strategic group. Additionally, you can illustrate the market share of the strategic groups by the size of the circles. The following figure shows an example of strategic group analysis applied to the automobile

industry with product price and breadth of production line being the criteria of evaluation.

One the map is constructed, the attractiveness of each group is analyzed by applying Porter’s five forces. Mobility barriers are group-specific entry barriers that restrict the shifting of strategic groups from one position to another. Mobility barriers prevent quick imitation of successful strategies. The most important aspect of any strategic group analysis is identifying the mobility barriers that impede movement between groups. This helps in understanding the strategic dynamics and shifts of the industry. By exploring different dimensions, you can surface key factors for success and evaluate your position relative to others in the industry. This not only helps to access the probable strategic shifts of the competitors but also determines the profitability in the market. This method requires a complete understanding of a competitor's goals and strategies to use trial and error to find useful dimensions.

Growth-Share Matrix

The Boston Consulting Group (BCG) growth-share matrix is a planning tool that uses graphical representations of a company’s products and services in an effort to help the company decide what it should keep, sell, or invest more in. The tool is used internally by management to assess the current state of value of a firm's units or product lines.

The matrix plots a company’s offerings in a four-square matrix, with the y-axis representing the rate of market growth and the x-axis representing market share. The matrix is based on four categories: Star, Question Mark, Cash Cow, and Pet. Each category has its own set of unique characteristics as explained below.

A product that has a low market share and is at a low rate of growth is termed as PET. This category is placed in the lower right quadrant of the grid. Pets don't generate much cash for the company and should be sold or liquidated immediately.

  • Cash Cows are the Products that are in low-growth areas but for which the company has a relatively large market share are considered “cash cows” This category is placed in the lower left quadrant of the matrix.

  • Stars are the products that are in high growth markets and that make up a sizable portion of that market are considered “stars” and should be invested in more. In the upper left quadrant are stars, which generate high income but also consume large amounts of company cash.

  • Question Marks are the opportunities with high growth rate markets but in which the company does not maintain a large market share. Question marks are in the upper right portion of the grid. They typically grow fast but consume large amounts of company resources.

Growth-matrix is a decision-making tool, and it does not necessarily take into account all the factors that a business ultimately must face. The framework is easy to perform and helps to understand the strategic portfolio of your business venture. However, the matrix does not include the external factors which might completely change the situation. And the model does not acknowledge the synergy that exists between different units. The following figure grades the promotional strategy according to the growth-share matrix.


Each analysis as discussed above provides a road map to conduct a competitor analysis and gain control over the market. Every framework has certain limitations but if correctly applied the method ensures improvement in your business strategies. The major role of competitor analysis is to give you the ability to set yourself apart. Once you've learned what your competitors are doing, you can build a difference in your business. Focus on what makes you different in your marketing, and sell the benefits of that difference. Know who's around you, so you can figure out how to stand out. If you start out this way, it will make the entire process much easier.


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