Competitive Landscape Analysis: A Data-driven Guide to Staying Ahead of Industry Rivals

Strategic competitiveness is at the heart of the free market. To survive and get their market share, businesses compete for the hard-earned money of their target audience.

Thus, before entering a new market or attempting to achieve sustainable growth, companies must understand the competitive landscape they are up against. The best method to do this is a data-driven competitive landscape analysis.

In this article, we will examine the competitive landscape definition and what makes competitive landscape analysis important. Additionally, you will find different frameworks for conducting competitive market research that produce actionable insights.

What is competitive landscape analysis?

Competitive landscape analysis is a method for recognizing and analyzing your competitors. It's an ongoing process that shows the overall industry trends and enables data-driven planning based on your position in the market.

The most common data points of competitive landscape analysis include your competitors' profiles, available products along with their prices, branding and communication, and market share.

How to do competitive landscape analysis?

Before moving on to specific frameworks, we first need to discuss the 5 steps you will have to take to do a competitive landscape analysis.

1. Know your company

If you own a business or manage a firm's key departments, you will most likely know its vision, mission, core values, and objectives from the outset. As the business evolves, however, your understanding of yourself has to evolve along with it.

Thus, before analyzing your competitors, it is worthwhile to take another thorough look at your business's strengths and weaknesses. First, this means knowing your product well and having a clear vision of the customer.

Of course, the way you look at this portion of the market landscape will also be affected by the insights you will draw from your competitive intelligence. However, to identify your competitors, you need to have a coherent vision of who you are from the outset.

2. Identify your competitors

Go over the companies you share your industry and market with. These are all businesses that can conceivably sell to the same people and organizations as you do, especially those offering similar products.

Segmentation of Competitors: Not all competitors pose the same level of threat or operate in the same market segments. Segmenting your competitors can help in understanding the competitive landscape better:

• Primary competitors. Your primary competitors are companies that sell essentially the same product for the same target audience. These are also your direct competitors, while all the following types are your indirect competitors.
• Secondary and tertiary competitors. These firms serve slightly different market needs and have unequal marketing capabilities. They might target a niche within your market landscape or a different geographic area. You can score firms based on what they target and their assets to distinguish secondary competitors from tertiary ones.
• Replacement competitors. Also known as perceived competitors because the customers might perceive a different kind of product or service as an alternative option to yours. For example, streaming services are your replacement competitors if you run a cinema.
• Future competitors. These are real or hypothetical companies that might become your rivals by leveraging future technological developments. In 2016, Uber identified whoever was first to utilize autonomous cars as its biggest future competitor. Similarly, marketing agencies today can assume that their biggest future competitors are those best at utilizing AI for content creation.

3. Collect data for competitive analysis

After the initial firmographic segmentation of your competitive landscape comes the time to get to know your competitors better. You will need to collect all kinds of data points on the competing businesses to determine which ones pose the biggest threat and which ones you could learn from. This data can include:

• Firmographic Information. Basic data about each company's size, location, and market presence.
• Financial Reports. Publicly available financial data for analysis.
• Technology Stack. Information on the technological tools and platforms used by competitors.
• Social Media Performance. Insights from competitors' social media activity.
• Market and Industry Trends. Understanding broader trends that might impact your market position.

4. Analyze Data

Look at the data you have to see if it answers your main questions about the competition. These questions will depend on the framework you choose for your competitive landscape analysis, but a few main ones are:

1. Threat Level: Which competitors pose the most significant threat?
2. Learning Opportunities: What can you learn from your competitors' strategies?
3. Market Position: Where does your company stand in comparison to your competitors?

Some of the data might be useless, low-quality, or insufficient. In that case, you might want to gather additional data and remove sources that do not produce valuable competitive insights from your list.

5. Adjust Your Market Landscape

After data analysis, you are ready to improve your initial view of the competitive landscape. You may find out that some companies are not as important competitors as it seemed while others are a rising force. Adjust your market landscape accordingly and work with your teams to develop strategies that will allow you to compete effectively in these conditions.

Top 6 competitive landscape analysis frameworks

1. SWOT analysis

SWOT stands for strengths, weaknesses, opportunities, and threats. It is an analytical framework for discovering a particular firm's competitive potential within its market landscape. A business's strengths and weaknesses are internal factors affecting its position and potential, while opportunities and threats are external. 

• Strengths. These are all the things that give the company a competitive advantage. It can be its technological innovations, loyal customer base, strong online presence, or anything else that makes it stand out in a positive way.
• Weaknesses. Anything that stops the business from performing to its full potential. Lack of capital, inexperienced management, and high employee turnover are all examples of weaknesses that an analyst should note.
• Opportunities. Favorable external conditions that might enable a business to increase its market share. For example, another firm closing its branch in a particular area.
• Threats. External factors that create an actual or potential problem for the firm. This includes new alternative solutions becoming available to the customer base, stricter regulations that, for example, complicate the supply chain procedures, or natural disasters.

SWOT analysis can be turned inward to probe your own company or outward to analyze competitors. Effective competitive landscape analysis requires both. 

2. Porter's Five Forces

If you find the SWOT analysis too company-specific, Harvard professor Michael E. Porter developed a competitive landscape analysis framework that starts with the entire industry. Thus, Porter's Five Forces described below provide an encompassing way to examine an industry.

1. Competition in the industry. The number of competitors and their competitive capabilities.
2. Bargaining power of suppliers. The firm's dependency on particular suppliers and how easily they could raise the costs of crucial supplies.
3. Bargaining power of customers. How much leverage do the customers have to negotiate better deals for themselves?
4. The threat of new entrants. The fewer resources it takes to enter an industry and compete for its market share, the greater the threat of new entrants.
5. The threat of substitutes. See whether there are close substitutes for the company's or service.

3. BCG growth-share matrix

Boston Consulting Group's growth-share matrix allows you to compare your products and services with those of the competitors. The matrix evaluates products along two dimensions – growth rate and market share. This creates four product categories:

• Cash cows. Competing with you is hard when you have a sizable market share and the growth rate in the industry is low. Thus, you should milk your product for profit.
• Stars. These products have a high market share in a high-growth market. Competition is fierce, but so far, you are winning. If you can keep it up with this product, it might become a cash cow when the market growth rate declines.
• Question marks. These are products in a high-growth rate market where your share is not that great. Your position is not that strong now, but since conditions are volatile, you might rise if you can beat the competition.
• Pets. A low market share and low growth rate mean there is not much hope for this product. Companies are usually advised to liquidate or reposition such products.

4. PEST analysis

Political, economic, social, and technological (PEST) factor analysis examines external macroeconomic forces that might affect the company's competitiveness. Big businesses are more likely to use this framework as they are the first to be directly influenced by macro-factors.

PEST analysis does not concern itself with the competitors' strengths and weaknesses. Thus, it is more effective as a competitive landscape analysis tool when combined with another framework, like SWOT analysis.

5. Perceptual mapping

Perceptual mapping uses an axis of two criteria to compare different brands based on how they are perceived by customers. For example, you can ask your client base how they perceive brands in your industry regarding price and quality.

This creates a comparison matrix that shows how close or far you are from particular competitors and your strengths and weaknesses against them.

6. Strategic group analysis

With strategic group analysis, you organize your competition into groups based on similar strategies that they might have. This includes marketing strategies, geographic coverage, pricing models, and similar characteristics.

Grouping competitors enables you to position yourself as well, adjust your business strategy, and plan your steps with entire clusters in mind instead of over-focusing on specific firms.

Where to source data about the competitive landscape?

Your competitive landscape analysis is only as good as the data it is based on. Utilizing the following data sources is crucial for extracting valuable competitive insights.

Company website and other content

Web data is the primary source of information for competitive landscape analysis. Your competitors will communicate a lot about themselves on their official websites. Here, you can learn basic information about their product features and prices.

Looking at their ads, blog posts, white papers, and similar content will inform you about what keywords they target, the brand voice they are creating, and their general marketing strategy.

Firmographic web data

If you are still exploring the players in your competitive landscape or need data about other companies at scale, one of the best types of data you can use is firmographic web data.

For example, at Coresignal, we offer over 92 million firmographic data records. Companies leverage this data to filter and group relevant companies based on specific criteria and to extract actionable insights about them.

Social media

Monitoring competitor social media accounts is crucial because it is easy to monitor their content. Perhaps even more importantly, social media monitoring will provide data on how your competitors engage with their customers and how their brand is perceived.

Additionally, tracking which competitors' social media platforms they concentrate on will help analyze their marketing strategy and industry marketing trends.

Internal data about yourself

Your firm is the central point of your competitive landscape. Becoming a data-driven organization that constantly collects and analyzes data on internal procedures, results, strengths, and weaknesses is beneficial in many ways. It's definitely the straightest road to effective competitive landscape analysis.

Customer interviews

A few competitive landscape analysis frameworks depend directly on customer perception. Even if you are not using those particular frameworks, audience insights are crucial for accurately comparing your product and content with what your competitors produce.

Career-oriented websites

Job-oriented web data, including job search sites, professional social media platforms, and company review websites, can tell a lot about a firm's competitive capabilities. Such data can provide competitive insights by informing you about your competitor's growth trends, the results of their hiring efforts, and which areas they are focusing on.

Insights from competitive landscape analysis

You can extract various types of competitive insights through rigorous analysis of your competitive landscape.

Firstly, comparing yourself with competitors will help you clarify your unique value proposition (UVP). Whether it is quality, convenience, or particular features, knowing what exactly makes your offerings stand out will allow you to communicate it precisely and confidently to the customers.

Looking at competitor content will also produce other marketing insights, such as what works and what does not when using particular channels.

Furthermore, by analyzing performance data on various products, you will know where to invest your financial resources for the greatest chance of sustainable returns.

Additionally, by examining various pricing methods, you will gain insights into how to adjust or diversify your pricing model.

Finally, competitive landscape analysis will tell you both what is missing from your efforts and the activities of your competitors. The former will inform you about what technological solutions you overlooked or what your customer base cares about that you did not address.

The latter will give insight into your competitive advantage, enabling you to strategically double down on it when an opportunity presents itself.

Summing up

Competitive landscape analysis allows you to see your position in the market more clearly and leads to better business decisions. It is also an ongoing process that can result in different competitive insights every quarter, if not more often. As long as you have reliable data, your competitive analysis is bound to uncover growth opportunities.