The goal of competitive analysis is to better position your organization to leverage your competitive edge. How is your company different from others? In what way does it stand out? Is there a sustainable value that you can maintain and develop over time?
Competitor analysis is an essential component of corporate strategy. It is argued that most firms do not conduct this type of analysis systematically enough. Instead, many enterprises operate on what is called informal impressions, conjectures, and intuition gained through the tidbits of information about competitors that managers continually receives from surveys. As a result, traditional environmental scanning places many firms at risk of dangerous competitive blindspots due to a lack of robust competitor analysis.
How do you know who your competitors are? What your customers think of you/your products/your comeptitors? Here is an interesting conversation Prof. Mike Smith had at a BestBuy store few years ago:
Mike was looking for a DVD player and he selected one. He tried comparing its price online and found that Amazon was offering lower prices for the same product. He then asked the manager whether they compare prices to offer best deal and he replied 'Yes'. He happily showed him the price at Amazon and asked him to offer that same deal. Manager replied saying that he cannot offer Mike that price saying that BestBuy did not consider Amazon as a competitor. Mike then replied saying "Excuse me, it is not BestBuy who gets to decide who their competitors are; I, as a consumer, is the one who decides this."
I found this conversation very interesting as it shows how important is the perception of customers towards a company, its product/offerings and that of its competitors. It also shows how important it is for companies to measure this correctly in order to strategize and position itself in the competitive space. One common way of doing this is by surveys, especially online surveys. These days online surveys are conducted by paying the internet users for their time or are required to be completed to access free software, service, pirated files, etc. Most of the users would want to complete as many surveys as possible in order to earn more money without giving it a thought. If this is the case, can companies really trust online surveys to decide what is the perception of its customers towards them?
Assessing goals, branding plans, and future efforts in the context of the presumptive goals of your industry rivals, understanding why customers choose competitors over your firm -- both why they like your rivals and why they refuse to work with you? But how dependable are surveys for this purpose?