Gain A Winning Edge Through Competitive Analysis
How can you gain a competitive advantage if you don't know what you're up against?
“It’s not the will to win, but the will to prepare to win that makes the difference.” – Bear Bryant
Football season is finally here! For many fans of the sport, this means wearing your lucky jersey, participating in fantasy football and cheering on your favorite team to victory. For players, this means plenty of drills, practice, and film study. In the NFL, film study has two objectives – to provide a learning opportunity for the team to dissect and improve upon their performance from the last game, and to prepare for the week’s upcoming opponent. Taking film study seriously can mean the difference between an A and B player, and the difference between winning and losing the game.
So how does this relate to business? Like professional athletes, it is impossible to be at the top of your game without first understanding what you are up against. Ask anyone that sells a “commodity”, and they will tell you that their customers are often confused about what differentiates their product from that of their competitors. Why?
Because after awhile, every business starts to sound the same – promising the same benefits, in the same time frame at roughly the same cost. In order to achieve a sustainable competitive advantage in the market, you need to conduct a thorough analysis of your competition, just like athletes and teams do with film study.
Why you need to gather competitor intelligence
Think about football legend Peyton Manning. When he stepped up to the line of scrimmage, most times he knew exactly what he was going to do with the ball. In other words, depending on what he learned about the defense, he may have yelled out “OMAHA, OMAHA” to flip the play to go the opposite direction. This is because he’s watched hours and hours of film on every defense and every defensive formation, gathering strengths and weaknesses, and deciphering trends. Ultimately, this provided him with a killer advantage over his opponent.
A web search on “Competitor analysis” brings up mostly advice for small business owners preparing a business plan. Imagine if your organization never looked at the competitive landscape after they put together an initial business plan. This approach would likely land you in the same spot as the Taxi industry when Uber came on the scene. Yet strangely, most large organizations have no interest, much less a formal process for collecting competitor intelligence on a regular basis.
The benefits of collecting intelligence on your competitors include:
- Gaining knowledge around who else your customers are considering when making the decision about your product offering
- Understanding what products your competition is promoting and how they are communicating to prospects
- Knowing where your competitors are spending their marketing dollars (online ads, social media, sales events, etc)
- Recognizing your competitors’ strengths and weaknesses
- Understanding how to position your offering so that it stands out
- Increasing intelligence and insight on where to focus and how to push your business to new levels
Conducting a competitor analysis doesn’t have to be a year-long, complex process. In fact, you are far more likely to make this part of your regular business approach if the process is simple and uncomplicated. NFL teams and players don’t take a week off to study endless amounts of past games. Rather, they have a regimented but integrated approach each week to watch film in order to gain critical knowledge about their next competitor.
Think about how you can start to gather competitor insights as part of your regular business routine. For example, browsing your competitors’ websites and press releases, seeking opinions about your competitors from industry experts and research firms, and asking your customers directly what they think about your competitors are all simple ways to gain a better grasp of what you’re up against.
Understanding your competition is a team sport
Great football teams don’t just make the coaches or star players study their opponents. They know that every player has a different job to perform on the field. This means the quarterback is studying the opponents’ defense and when they blitz, while the cornerback is focused on understanding where the wide receivers line up and what patterns they run.
Likewise, everyone in your organization can benefit from understanding who your competitors are and how they operate. Your marketing team should understand how your products are positioned relative to the competition, which markets they serve and which marketing strategies and tactics are being utilized. Whereas your HR team will want to understand how your competitor stacks up in the area of benefits, compensation and advancement opportunities. Even your Accounting department may come up with creative billing options to offer customers just by understanding how your competitors do business.
Ultimately the purpose of understanding who your competitors are and what they are doing is so that you can position your business for success. The information you collect will help determine where your company may have a unique value proposition, which you can then provide and communicate to your prospective customers.
In a future post, I’ll cover exactly how to conduct a competitive analysis and share a template that you can use to get started.
In the meantime, as you cheer on your favorite NFL team this week and your defense snuffs out that screen play to the half-back, realize that the defense didn’t just get lucky. Rather, they knew from their film study and competitive analysis of the opposing team that the offense runs that play five times a game and always on 3rd down. And stopping that 3rd down conversion is what allows your team to win. And aren’t these insights what we all strive for in our business?