The objective of competitive analysis is to acquire a deep understanding of your competition
When is it useful?
Competitive analysis is a key input into strategic thinking, since it is relative performance vs competitors that matters.
How do you do the analysis?
The easiest competitive analysis to conduct is generic – describing a competitors’ products, business units and financials on the basis of publicly available data. It can highlight areas for additional research, but has limited ability to provoke strategic insight.
More valuable, but requiring industry expertise, is to identify the few questions that would make a difference to your strategy if you knew the answers and then build the analysis from industry sources. Where does the competitor make most of their profit? For similar products, what is their comparative cost position? What are the competitor’s future growth avenues?
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