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Competitive Analysis Benchmark Report

Competitive Analysis Benchmark Report

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Published by debka
How is your organization faring when it comes to collecting data about your competitors and in creating new competitive strategies? We decided to find out. Read on...
How is your organization faring when it comes to collecting data about your competitors and in creating new competitive strategies? We decided to find out. Read on...

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Published by: debka on Jul 11, 2008
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 © 2008 Sequent Learning NetworksPage 1
Competitive Analysis Benchmark Report
Introduction
One of the most important determinants of product success is the degree to which your product is differentor better than the competitor’s product. However, during our workshops, we invariably ask the followingquestions:1) Who are your competitors?2) Which products do you compete with?3) How do you go about comparing your products with your competitor’s products?4) What are the strengths and weaknesses of the competitor’s product?5) Are they making money?6) What share of the market do they have?You can come up with a long list of questions to ask. The challenge is whether or not you can answer thequestions. Do you have the competitive intelligence you need to get your job done, or do you have to doall of the competitive data gathering and analysis yourself?
We Wanted to Learn More
We decided that we wanted to learn about the current state of competitive analysis, so we posted a surveyto our website and collected responses from November, 2007 until February, 2008. 235 peopleresponded to the survey roughly broken down by industry type: 12% from technology companies, 47%from industrial and manufacturing companies, 9% from medical products/healthcare, 14% from consumerproducts, 18% from services-based companies.
What We Found Out
One of the most remarkable findings was that only 21% of the respondents said there was a
formal competitive intelligence (CI) group 
in their company. This is difficult to comprehend. Other benchmarkswe’ve carried out over the years revealed much higher numbers. Does this mean that companies arecutting back on research? Is it there a conflicting message from companies who assert they’re ‘market-focused’ but are not investing in one of the most important research areas?One could be disappointed in taking a glimpse at this situation and see that individual contributors don’thave the benefit of a strong industry and competitive intelligence research organization to support them. Inmany companies, there are indeed corporate functions that do some of this work in support of corporatemarketing planning. However, at the product or product line level, there is little support. On the otherhand, we do believe that product managers should be able to continually carry out product-levelcompetitive analysis. For example, we recently asked a group of participants in a workshop if they had
 
 © 2008 Sequent Learning NetworksPage 2
their competitor’s products in their labs. They said they did not because there was no budget for this typeof expenditure. You can only imagine how we responded.Further to this, we wanted to know if the respondents’ company had some type of i
ndustry and competitive data repository or archive 
, either physical or online. Surprisingly, 67% said no. We asked if there was astandardized competitor profile document or template available so that everyone carrying out competitiveresearch could be guided to find similar competitor characteristics. 59% said no. Then, when we asked ifit would be helpful in guiding your competitive analysis, to have a standard guideline or template, and 94%said yes. Our recommendation would be for you and your colleagues to collaborate on the creation of astandard template to guide your work in this vital area.We also wanted to find out how often product managers were
scanning the competitive horizon 
. 21% saidthey scanned daily, 15% said they scanned 2-3 times per week, and 64% said they scan a couple of timesa month. Needless to say, we’re all busy. It may not be feasible to just scan trade publications andcompetitor websites. 2-3 times per week is probably a good target. 41% of you said that you spend anhour our less during each scanning session and 24% said they spent 1-2 hours. We like the 35% ofrespondents who spend more than 2 hours at a time when carrying out competitive analysis activities.Since
product level competitive analysis 
is so important to product managers and their teams, we wantedto see if you agreed – and you did – with 76% agreeing. However, less than 50% said that they weredoing a good job at this. Hand in hand with this, we wanted to know if you knew how each competitor’sproducts were positioned. About half said you did and half said you didn’t.In the next section of the survey, we wanted to learn about what was understood about the other
marketing mix elements of the competitor’s products 
, including pricing strategies, promotional activities, anddistribution channels. About 70% of the respondents believe that it’s important to know this. However,when we asked how well you were doing at this, less than 50% said they were doing a good job at thesetypes of analyses. What this tells us is that while there is a belief that various competitive analysisdimensions are perceived as very important, many people could use some help. We surmise that theremay be know-how issues, time issues, and data-availability problems.One of the other questions we thought might be important focused on the
segmentation models of your competitors.
Since more than 70% of you thought that it is very important to know these segmentationmodels, only about 25% of you said you really understood the market segments that they were pursuing.This is of particular concern to us because if a company is competing for similar customer types, it wouldseem that all competitors would have a good sense of their customer constituencies.In the last part of the survey, we asked people the kinds of things they would like to know more about inrelation to their competitors. Here are some of the ones described most frequently:» Their marketing strategies» Competitor pricing» Competitor terms and conditions (in sales contracts)» Market share» R&D investment in productsAlthough most people thought these five items are most important, the main barriers to securing the mostcomplete data rests with time. 44% of respondents say they just have no time to do this work, 24% saidthat there are no human resources available, 23% said that the people assigned to the tasks wereineffective or that there were other barriers.

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