TGG Service: Competitive Analysis
A “competitor” is anyone or anything that vies for the same dollar spend that would otherwise go to you.
All buyers have established perceptions of value. Every seller’s challenge is to bend buyers’ perceptions in the sellers favor. Doing this successfully is not solely the responsibility of marketing and sales.
Success begins with strategy. Developing strategy must begin with clear-eyed assessment of the value you create. Assessing the value you create requires understanding the nature of the competition you face or will face, because competition acts to reduce perceptions of that value.
It is relatively easy to recognize direct competitors – i.e., those who provide essentially the same kind of offerings – that your organization provides. It is often much more challenging to identify and evaluate non-obvious competitors and their real and potential impacts on your revenues. Examples of non-obvious kinds of competition include:
Substitutes: For example, in New York City, the subway system, cabs, Uber, and walking are substitute transportation solutions that compete with companies that sell automobiles.
Internal groups: For example, if a company sells software solutions, internal software development teams may vie for the same funding the might be spent with that company.
Economic conditions: It can work for you; it can work against you.
Buyer attitudes and habits: Failure to understand what motivates or demotivates buyers can be fatal.
Ignorance and stupidity: These can be powerful competitive forces. Dealing with these effectively begins with recognizing their existence and nature.
Consider these statements:
“Why should I buy this pair of very expensive shoes when these less expensive ones look just as great.”
“Why should I buy this unknown brand of shoes, even though they do look pretty great, when all my cool friends are buying these?”
What is the real competition in each case? Now consider how much more complex and how much less obvious buyer attitudes and behaviors are in the business world.
At TGG, we begin competitive analysis with a look at the current state-of-play in the market place. To frame our analysis, we use Michael Porter’s 5-Forces model to understand direct competitor rivalry, threats of substitutes and new market entrants, and the bargaining power of suppliers and customers. In the process we are constantly working to ask tough questions like:
“How could our client turn competitor X into a customer or partner?”
“What’s happening here that is not obvious?”
And most important of all: “Why? Why should anyone buy from our client rather than from someone else, anyone else?”
By framing the analysis carefully and by asking a lot of tough-to-answer questions, we are able to develop a point of view about the nature of competition each client faces. With this point of view, we are then able to develop concrete recommendations regarding strategy.
We believe this is the kind of critical homework that every company that wants to be successful must do. We bring the expertise and experience to do the work!