Developing a Successful Strategy Starts with a Competitive Audit
The truly great brands that revolutionize their industry all do one thing really well: they understand their competition by analyzing their opponents strengths, vulnerabilities and anticipated next move. Learning about which brands your customer is also considering as intimately as your own business, gives you an unparalleled advantage to outpace the competition.
"The ability to learn faster than your competitors may be the only sustainable competitive advantage." -- Arie de Geus, Shell Oil
Why do people buy your brand?
As simple as this question may appear on the surface, there can be a lot to unpack and explore. Given the buying journey looks dramatically different than just a few years ago, and with consumer preferences shifting, it remains critical to be customer-obsessed in order to accelerate growth. And if you are thinking about or currently focused on selling to Gen Z - well let’s save that topic for another day and maybe we do it over Tik Tok or in the metaverse.
By taking steps to unlock insights as to why customers decide to choose your product (or not), this can effectively reframe and hone your Unique Selling Proposition to ensure clear and meaningful differentiation in the market. While your sources for gathering intelligence are nearly limitless, be it social media listening, or surveys and customer data across every channel, it boils down to applying and being able to have the confidence to act. Remaining in lock-step with consumers as their needs evolve will set your organization up for long term success.
Leaders are always fine-tuning
To unlock new and untapped opportunities, requires a transformational mindset. When analyzing your direct competitors, there are some key dimensions to help identify where you might need to bolster or refine your approach to capitalize on changing dynamics.
To kick start the process, here is a diagnostic list. Remember to always look at it from multiple perspectives - your own and through your customers eyes too:
How does your product offering stack up on relevant features and benefits that are most influential in the final purchase decision? Are any of your competitors retooling or expanding their product mix? Are new entrants making waves that would cause you to pivot?
On a relative basis, is your brand better positioned to own a specific segment? Is the category attracting new players, making future growth a challenge?
Looking at the market share leader, is there anything you should borrow from their playbook? In the face of stiffening competition, do you need a blunting strategy to fend off upstarts and preserve pricing power?
As consumers become increasingly more empowered and shift behaviors online, how is this affecting your channel mix and tactics? Do you see competitors over relying on promotions to maintain share? Based on the trendline, a refreshed marketing strategy might be the key to achieve your goals.
Now it’s time to be really honest with yourself (and your team). How strong is your brand reputation? Look for some “voice of your customer” feedback and online reviews to inform your perspective and see if this is trending in a positive direction. Do consumers perceive your brand in the ways that drive long term loyalty and repurchase intentions? Which of your competitors is enhancing their value perception and should you be worried?
Audit and assess every aspect of your customer experience - both offline and digital. Then compare this against your peers. Where might they struggle and how can you best take advantage?
Given the recessionary concerns and persistent inflation, it's a business imperative to consider your pricing strategy too. Are your competitors raising prices? Is your category experiencing “shrink flation”? Watch closely for consumer dissatisfaction and respond if your solution better aligns with their new expectations.
Based on key findings, you will uncover ownable white space amongst an audience with a much higher likelihood to purchase from you. With the guidance and outside perspective of a marketing services firm, your organization will be poised to reshape your strategy, messaging and brand experience to unlock your full revenue potential.
I Don’t Own a Crystal Ball
Although it would be cool to add fortune teller to your CV, most of us rely on reading the proverbial tea leaves and marry that up with relevant data points to paint a picture.
Take for example the recent Deloitte Canada Report which projects a YoY consumer spending decrease of 11% this holiday season. With mounting debt, rising interest rates, and inflation still running hot, household costs are substantial enough that Canadians are pessimistic about the short term and approaching discretionary spending with caution.
As a savvy marketer, our job is to anticipate how this will play out in real time to help weather the storm and rebalance brand versus demand tactics so the entire marketing funnel is primed appropriately.
And while consumers will be making trade-offs and hard choices, there are categories where consumers are choosing to spend more such as travel (11% uptick) and 25% more on experiences such as attending a sports event or a concert.
In response to these rapidly evolving conditions, it is time to think of competitors outside your category, into adjacencies, as consumers seek out substitutions that may fall beyond your typical set, given the weight of their financial realities. Successful companies seize this moment to consider if their brand is durable and can expand beyond its current role in the lives of consumers. Are your new ideas and approaches viable? Begin by assessing how you might deliver incremental value and then validate for commercial acceptance before fully committing to this new go-to-market solution.
Measuring up in the digital world
For ambitious companies looking to level up, take advantage of freely available (or low cost) digital tools to establish benchmarks with your competition. This type of deeper analysis across key touch points really helps pinpoint what is working and where untapped opportunities exist to reach your customers.
Website - An effective audit takes into account both highly subjective and measured factors such as ease of navigation, optimized for mobile browsing including load times, overall design and is it user friendly, messaging and key visuals as well as various types/format of digital assets.
SEO - Review keywords by traffic share and cross tab with geography, search intent, etc., to inform and improve your future content marketing efforts
Socials - It is best to be platform specific as not every brand commits equally. When looking at each individually, go beyond vanity metrics to dissect their strategy around posting frequency, how they respond in comments and the types of content such as a breakdown of promotional vs brand/product vs culturally relevant topics. Uncovering patterns as to where your competitors are more active becomes actionable as you build out your own social media playbook.
To introduce a layer of objectivity, creating a scoring system (a scale from 1 to 5) for each aspect of your audit will make comparisons more meaningful and easier to monitor changes over time.
A Proven Framework for Success
To gain a deeper understanding of your competition, start your market analysis with one of the many frameworks available to help focus your efforts. While many of us have a good instinct for what’s happening in the market, it’s important to not solely base decisions on intuition alone no matter how good your gut feeling is.
While there are probably a dozen or more frameworks to choose from, here are two that help unlock actionable insights to grow your audience, launch into a new market, or increase market share. And not to worry if it might seem daunting; with the right tool, you will remove the guesswork - think of it as cooking 101 with instructional support to become a master chef.
SWOT Analysis
Arguably the most commonly used as it has been a management consultants go-to for decades, and for good reason. Ask any strategic planner and they will swear by using this before making any critical business decisions.
Once you complete your SWOT analysis for each major player (including your company), hone in by identifying potential competitive advantages your business may have over others, as well as finding areas for improvement.
Strengths: focus on internal factors such as IP or proprietary tech, employee engagement and training, customer experience as well as brand awareness, familiarity/recognition and trust. With the growing importance of digital and socials, do you see any advantages here? What qualities and capabilities separate you from the rest? Consider financial conditions and customer relationship management to build loyalty.
Weaknesses: what are your inherent disadvantages, any constraints like a small marketing budget or lack of engaging digital assets? Any communications gaps either internal or external? Are consumers clear on your value proposition? Focus on areas your competitors do well. Any talent gaps or resource constraints?
Opportunities: consider category trends, changes in consumer behaviour and lifestyle shifts. With the increasing role digital plays in every buying decision, how might you further advantage your company. Are you building strong communities online and involving influencers to credibly amplify your voice? Is there a new use case or reason to consume your product or service? Can you further leverage the power of earned media with PR? Is there real potential for new market expansion?
Threats: there are external factors that pose challenges such as rising input costs and labour. Waning consumer interest, dissatisfaction with the brand experience or negative sentiment online reviews or across social media beyond your own channels are also areas to consider. What about emerging competitors on one side and lack of access to market expansion. Are consumers changing behaviours in the face of an economic downturn?
As your business grows, you will face increased competition and challenges to overcome to meet expectations. Using this tool will reveal elements from your environmental scan that will directly benefit your business and give you the strategic rigour to move with speed and confidence.
Porter’s Five Forces
If you are looking to shape or finetune your business strategy, Porter’s Five Forces is especially useful for analyzing the competitive structure of an entire industry or specific market segment.
This emerging micro environment framework, created by Michael Porter, a professor at Harvard Business School, is a model that identifies and analyzes five competitive forces that shape every industry and helps determine an industry's weaknesses and strengths
By examining these key market forces, it helps gauge industry competition levels and effectively identifies opportunities for business expansion.
Here is a guide to get you started:
Intensity of competitive rivalry - refers to the volume of competition and their ability to undercut to steal share. The more similar products or services available lessens the power of any single brand in the industry. In the case of a low rivalry, greater pricing power dynamics exist with the ability to scale more quickly.
Threat of new entrants - lower barrier to entry means more effective competition can easily weaken your established position in short order. Ideally, an industry that is harder to break into offers advantages to entrenched incumbents given the stronger barriers to entry exist.
Bargaining power of suppliers - how able and likely are suppliers to drive up costs which may affect your margins? When fewer suppliers exist, you might become dependent on a single provider which increases risk. How unique are your inputs and is it difficult or expensive to switch vendors if necessary? If the power rests upstream, the supplier can negotiate more favourable terms versus a scenario where low switching costs between rivals exist.
Power of consumers - if you have a strong and loyal customer base, this correlates to ability to increase price and maintain long term profitability. If the consumer is more empowered, they will vote with their wallet and this can drive prices lower or risk losing to a competitor. Consider your most profitable customers and how they might be changing their behaviours.
Threat of substitutes - any time customers can easily substitute a product or service, this poses a significant threat. It is much more enviable to be in a segment which offers fewer substitutable alternatives to ensure you maintain pricing power.
Understanding Porter's Five Forces and how they apply to an industry, can enable a company to continuously monitor conditions and adjust its business strategy to better use resources to accelerate profitable growth for years to come.
For time-starved clients that recognize the value of a strategically sound go-to-market plan, we can help navigate these unprecedented and challenging times. Bringing world-class capabilities, insights, and high touch service to address clients’ most complex business challenges, we are dedicated to helping achieve your growth ambitions. Spanning multiple industries, we carefully craft marketing solutions built around your business priorities to remain successful and deliver transformative results.
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