| What We Do... Competitive Analysis
and Forecasting |
| Marketplan
assignments are driven by business unit leaders seeking answers and
recommendations to more effectively meet their revenue objectives as well as
addressing problems that have stalled growth. |
| “We
are externalists” is Marketplan’s philosophy; success is measured externally,
whether it is expressed in terms of revenues and profits, growth, or market
share, image, or brand power. Segmentation is the key to marketing success. As
a result, our programs are field-interview driven among customers, channels,
competitors, and others. The information is analyzed in a framework of market
segmentation. |
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Marketplan addresses client needs such as: |
Competitive Analysis
Competitive Analysis is a challenging as well as rewarding aspect of our practice of strategic market planning. Rewarding in the sense of conducting more of an “us vs. them” assignment with the attendant strategic and tactical implications; challenging because the “value information” generally requires a great deal of digging, cross-checking, and confirmation.
The Flavors of Competitive
Analysis
Competitive Analysis can mean different things to different people. In the
purest sense we can aim at…
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A Specific Target Company – creating a portfolio of information detailing all
the relevant aspects of their business with special attention paid to KEY
SUCCESS FACTORS, defined as those items critical to success in the
industry/market of question. Determining how this competitor executes these
factors.
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For example, a Key Success Factor of the automotive battery business is the
sourcing of lead, both as “new ore” as well as recycled batteries.
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In the capital equipment leasing market the balance of equipment
utilization/age vs. depreciation/disposal economics is a key factor.
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Another aspect of Competitive Analysis is a comparison of the client vs. other
major competitors against a market-driven list of key characteristics; we may
also view this as Benchmarking. The exhibit on the following page shows a
comparison among leading HVAC large system providers and their comparative
rating by a decision-maker group.
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One can see that the major players are grouped together fairly tightly, meaning
they all have an acceptable performance in the marketplace.
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Distinctions are in fact slight.
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One key point of differentiation between the leading competitor and the others
is in the rankings of Pre-Sale Expertise and Application Engineering which
reflects an historic position of sharing know-how with the market.
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When examining market trends such as IAQ, indoor air quality, the top three
suppliers are nearly equal in their ability to participate in current hot
topics.
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A third aspect of Competitive Analysis is the initiation on an Internal Data
System which is intended to be an on-going data repository for information on
one or more key competitors. In some cases a baseline study is needed as the
foundation of these systems, with periodic updates.
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Ideally, the information streams grow and expand over time to provide
substantial detail on a timely basis.
A Starting Point – Why?
If a document were delivered tomorrow detailing every aspect of competition,
what exactly would it mean and what actions would it impact? This is the WHY
question. Knowing details about competition is a definite edge and desirable
(especially if they lack your company details). The question becomes how
valuable is that knowledge and how important is it to develop. Will it have a
role in future decision-making, or is it a “nice to know”?
How contributory will this “asset” be in decision-making? Will its utility fade
before actions can be executed? Will the answers be “hard” numbers or will they
be assumptive. Is there a need to continue to track this data, how best is that
done in the future?
All these are factors that should be exhausted to arrive at a Target
Information List; a first-pass at determining what the assignment goals are. If
some information can be expressed in critical terms, this is preferable. This
list may change as a Competitive Analysis program is executed but the more
detailed starting point the better the end product
A Typical Approach
While specific assignments employ a variety of techniques, there are common
aspects. These are illustrative:
Program Initiation Meeting
At the outset we expect to accomplish several items that will be the foundation
of the efforts
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Review of the Key Success Factors that are critical aspects to participation in
the market
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What do competitors have to do well to be successful?
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Discussion of the client’s Target Information List; details, priority of
information, form of information.
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How should the information be expressed?
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Review the client’s perspective on valuable information sources and potential
contacts.
This meeting will allow for the development of a concise work-plan with
deadlines for interim reporting and discussion.
Developing Information
Where do we get competitive input? The simple answer is from all available
sources – everywhere and everybody. The practical answer is from a hierarchy of
potential sources which can include these and others.
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First Tier
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Secondary published documents, reports, articles
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Internet search and sources
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Second Tier
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Customers
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OEMs
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Suppliers
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Support Companies
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Channels of Distribution
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Third Tier
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Academia
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Ex-employees
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Other competition
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Fourth Tier
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Target Company Management
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Field Sales and Marketing
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Departmental
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Executive Management
Each information source has a degree of difficulty in data gathering which is
the reason we “build” information in the tiers shown above. The information
desired defines the source and in many cases the approach. All manner of
techniques can be employed, again depending on source, detail, etc. We may
employ telephone interviews, mail surveys, focus groups, email surveys,
personal interviews.
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LESS |
DEGREE OF DIFFICULTY |
MORE |
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"Dossier" Information |
Market-driven Information |
Strategy Information |
| Name/Location |
Revenues |
Market Viewpoint |
| Number of Employees |
Segmentation by End Use |
Competitive Viewpoint |
| Ownership and Structure |
Major Customers |
Strengths/Weaknesses |
| Management Team |
Special Customer Relationships |
Expected Market Changes |
| Plant Locations |
Quality Levels |
Stated Strategy |
| Product Lines & Specialties |
Pricing Policies |
Product Actions |
| Distribution |
Distribution Policies |
R & D Efforts |
| Plant Equipment |
Image |
Profitability |
| Financial Position |
Technology/Innovation |
Alliances |
| Parent/subsidiaries |
Capacity Utilized |
Expected Actions |
| Union/non-union |
Supplier Relationships |
Reaction to Market Events |
| Analysts’ View |
Perceived Strengths |
Leadership |
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Perceived Weaknesses |
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Apparent Strategy |
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A particular aspect of this approach which we believe is a strength is to
directly interview competitive management as part of the program, generally as
a final field step when all information has been sourced and much of the
analysis has been completed. Our experience has found that if a knowledgeable
and credible case is presented most upper management will entertain a
discussion of their market, competition, trends and issues. The ensuing
discussion meetings will confirm market input and facts gathered but will also
lead to insight into management assumptions, priorities, and future actions.
Companies mostly reflect the people who run them. Cultures and personalities
are very real and are key ingredients of the strategic process.
Deliverables
A program of this type wraps up with a deliverable that returns to the
program’s Target Information List. Most of the items will be answered with hard
data and opinion, others may be group conclusions based upon the best data and
logical assumptions. More importantly, what does the data say? Beyond questions
asked and answered, what actions does the input imply? When and how must the
client take action? Do the program deliverables confirm our assumptions or
raise more issues?
“Management that continually questions its market knowledge consistently
achieves success"
Marketplan Consultants: We help clients find, build and sustain growth opportunities
Marketplan is a marketing consulting firm based in the Chicago area with extensive market research, strategic consulting, and industrial experience. The firm helps companies develop and capitalize on market opportunities. Our value is individualized, objective, and actionable results that help you focus on the success factors.
Marketplan Consultants, PO Box 1513, Lombard, IL 60148 630 620 0882
www.marketplanconsultants.com
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