5.5. Competitive Analysis

One of the most crucial types of analysis is competitive analysis. Together with the SLEPT analysis and customer analysis, it is one of the three key analyses which the company should implement prior to setting their strategy.

When conducting a competitive analysis (de Witt, Meyer, 1994, Johnson, Scholes, 1993) it is, from a pragmatic point of view, beneficial to decide which competitors are worth monitoring. This does not necessarily mean direct competition, i.e. competitors with identical products and services, but also indirect competition – competitors with similar products that are not entirely identical. An example of indirect competition is fee-based university programs vs. other, short-term courses and education programs. It is beneficial to monitor indirect competition in the event that competing products or services have the potential to cause your customers to switch to the competing brand or vice-versa - to attract these customers to your brand/product.

In terms of the competitive analysis, it is advisable to consider which specific competitors are worth analyzing – usually an analysis of the several closest current or potential competitors is sufficient.

The competition can then be analyzed from various different angles:

• Products or services that the competitor offers – quality, options, additional services and other aspects

• Pricing policy – how high/low prices are, pricing policies etc.

• Analysis of other competitive aspects – i.e. distribution

• Customers’ perception of the competition– image (how to competitor is perceived in general)

• The competition’s marketing activities – where and how the competitor places ads, if and how they engage in media activity, what they share about themselves etc.

• Many other aspects, depending on what is relevant for the company

In terms of sources of information, the internet is undoubtedly the primary resource, as company websites can be a very useful source of data, not only in terms of products and prices, but they can also provide an idea of the competition’s marketing as well as other aspects – what the competition explicitly reveals about themselves, their overall image (i.e. the quality of their website, graphic design, quality of the information provided etc.)

Apart from online resources, information about competitors can be gained, for example, by way of more or less formalized customer surveys – primarily with the intention of finding out the customers’ expectations and what improvements can be made in light of the competition. Another alternative is to gain experience with the competitor directly, allowing for (in keeping with ethical norms), mystery shopping with the competition. Direct contact with the competition in particular, as well as the quality of their products, services, and general approach to the customer can be a very valuable source of information.