Exploring Competitors
This article shows project teams how to explore competitors as basis to find their sweet spot later on. We introduce the perspective to take and provide tools to support the analysis.
Gabriele Bacher
Team Coach
Sabine Schoen
Team Coach
Content
1. Purpose
Exploring competitors is a core activity to explore your innovation space and goes hand in hand with Exploring Customers. Your starting point should be your Target Groups matrix. Who else is currently helping your target group(s) to get their job done? Think of the example of the milkshake which is competing with a banana instead of other milkshakes. With this research question in mind you should begin exploring competitors through the eyes of your customers.
The first step is usually desk research to identify relevant competitors and map them to your Target Groups matrix. Depending on your selected target group you get familiar with your core competitors within your target group segment. The Competitive Landscape Analysis allows you to analyse competing factors within this segment. The second step to generate more detailed insights is to immerse yourself in the competitive landscape from the customers' point of view by the help of DIY activities, e.g. ordering and using the products of your top 3 competitors. Your insights from these activities will fuel the Ideation Workshop and, later on, the discussion about finding the right positioning for your new market offerings and a Business Model supporting this positioning.
Two perspectives matter when you research a competitor. First, understand their business model: the target group(s) they address, the brand & message they use to do so, the channel(s) they selected to get in touch with customers and maintain their customer relationship. Have a look at their offering(s) and the core value they create with them as well as their pricing & profit formula (e.g. by checking numbers from their annual financial statements). Finally, try to understand their unfair advantage / "magic factors" why they are successful on the market.
Second, identify customer perception: it is crucial for us to understand how the business model of the competitor is perceived by customers. What do their customers and users think about their offerings, pricing, customer relationship, etc? Discussions in forums and customer feedback / ratings can help you to generate insights. Can they help their clients to get their job(s) done properly? Try to find as much information as possible about it and combine it with insights from your Exploring Customers activities.
In an early exploration, you look at competitors from a broader perspective than you will later, once your level of knowledge has grown. That is quite normal. Just make sure you dig deep when analysing your competitors to generate surprising and relevant insights. A list of your 100 potential competitors is not the kind of information that helps anyone to find a sweet spot.
It's also fun to research your worst competitor and ask yourself what you can do better than they do. Be honest to yourself!