Leveraging Competitor Analysis to Inform Business Strategy: A Comprehensive Guide
by David Giersdorf
Editorial Note: This article is an excerpt from David Giersdorf’s Hard Ships: Navigating Your Career, Industry, and Life through the Fog of Disruption, available from Amazon, Barnes & Noble, and other online retailers March 25th.
In the dynamic world of business, identifying the strategies that work effectively for your competitors can provide valuable insights for your own company’s growth. To do so, one should meticulously observe and analyze the key business metrics of primary competitors and industry leaders relevant to their context. Over time, this allows for the understanding of changes in areas such as product offerings, brand positioning, messaging emphasis, organizational structure, technological adoption, and application. This process also helps in comprehending shifts in the myriad of operating and development metrics integral to your business.
A crucial step in this journey is to pinpoint the metrics that are significant for your business and trace these variables for your competitors over time. The beauty of this approach is that you don’t have to wait for future results; you can immediately delve into the past. Consider what they were doing or offering in the previous years and what has changed since then.
Ponder over the changes, the possible reasons behind these adaptations, and the variables that drove these shifts. Often, these transformations will resonate with your business thinking, providing additional validation for your prospective decisions and actions.
Take the cruise industry as an example. A valuable exercise is to observe changes in ship deployment – past, present, and future. What are the trends in the competitors’ fleets? How are they allocating capacity and supply by destinations, cruise itineraries, and durations? How have the number of departures within those destinations, changes in ports of call, and other itinerary-related variables evolved? These elements often serve as early indicators of demand direction.
Such observations can reveal shifts in demand, indicating potential waning popularity of certain features or emergence of new trends. It can also highlight pricing power variations among different itineraries or sets of ports within an itinerary. By paying close attention, you can seize numerous opportunities for optimization without necessarily undergoing the same challenging experiences or expending the significant time required to gain such insights.
This approach proves particularly useful if your business is still in its infancy, if you’re a startup, or if new competitors are quickly gaining market share while your business stagnates or declines. By effectively utilizing your competitors’ historical track record and investments, you can turn the tides in your favor. The key is to consistently monitor those vital ten variables, track them diligently, look backwards in time, and anticipate future trends based on their “footprints in the future.”
However, bear in mind that your competitors, particularly the astute ones, are likely tracing your moves in a similar fashion. It is thus imperative to be strategic about your actions, the timing of your announcements, and the manner and platforms of your presentation. Stay ahead, stay strategic, and march forward. Your competitors’ strategies can be the key to unlocking your business’s potential, provided you know how to leverage them effectively.
Metric categories to consider tracking:
- Products and Services
- Pricing and Promotions Channels
- Marketing & Sales Spend
- Announcements & Publicity Coverage
- Events Held & Attended
- Customer Mix
- Website Features and Content
- Organization Chart – Changes By Department/Function
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