Competitor Benchmarking

Competitor benchmarking is an often overlooked, but vital ingredient in the business mix. Through your business plan, you will already have a pretty sound understanding of the competitors in your market, but it is important to refresh this data and keep up to date with the developments of the market and the innovations provided by your competitors.  Not understanding how your competitors are innovating and transitioning in the market might leave you behind and cause you to relinquish market share by becoming less relevant to customers (think Blockbuster vs Netflix) which in turn is going to be very detrimental to your business’ position in the market.

To keep on top of competitor developments, it is wise to garner information from as many resources as possible including:

• Current News Websites – You can often setup key word or organisation alerts to notify you of any new content concerning your competitors as soon as it is published
• Trade and Industry publications – Trade and industry publications provide a neutral view of the industry and outline the key players along with innovations. Such publications therefore are a reliable source of knowledge that you can definitely apply to your benefit.
• Competitor websites and annual reports – Again you can often setup alerts and many competitors publish their own news/blogs which can help you stay up to date with their plans

Maintaining Market Knowledge

Another vital ingredient when considering competitor benchmarking is maintaining market knowledge. In the same way it is important to loop back and refresh your research on competition in the market, it is also a good idea to keep on top of market developments. Markets tend to develop over time and a customer’s preferences can shift in line with advancements in technology and shifts in social pressures (e.g. sustainability). This can create different dynamics in the market which in turn will create a number of pitfalls and opportunities for organisations that are operating in the space. If you are careful to stay up to date with the developments in the market by using news websites, trade publications and competitor websites you can keep pace with the market developments and ensure you use such change as a platform for opportunity.

Displaying information

If you are looking to secure investment in the future, it is very important that your analysis and research on the market is displayed in a concise and easily readable format. It is therefore prudent to get a few templates together that will ensure you are inserting the latest information into a format that is not only easily identifiable by a potential investor, but also easily managed and digested by you (nobody want’s to read through a wall of text!). Below are a couple of ideas created by simply using Microsoft Powerpoint which could be adapted to suit your needs.

Displaying a Market Analysis

The above template is designed to provide a quick overview of the market for internal business collaboration tools allowing in one very quick snapshot to surmise the following:

1. Nature of the Market – The market space for digital collaboration solutions displays fundamental characteristics of Monopolistic Competition meaning whilst there are a few small competitors, the larger ones command significant market share.
2. Emerging competitors – Despite the dominance of the bigger players, there is still evidence of emerging competitors. Such evidence is indicative of relatively low barriers to entry and is potentially being driven by growth in the market. Such growth is evidenced by the revenues of the major players trending upward.
3. Consumer verdict – The sentiment of the market regarding average user ratings suggests that the customers are happy with the services being provided, to enter the space therefore you would need to offer something significantly more innovative in order to ascertain a following.

Whilst it wasn’t necessary for this market analysis, you may also wish to include a trends section which pinpoints the emerging customer and technological trends in the space which may disrupt the dynamics of the market. For example providing an analysis of the video game space you would look to highlight a divergence from the traditional disc format to the newer streaming formats we are seeing emerge.

Competitor solutions comparison

Understanding the market and the biggest competitors within it is one step, but another key step in competitor benchmarking is to understand what exactly competitors are offering that is helping them to solidify and expand their position. Understanding the key functionalities, unique selling points and overall extensiveness of the competitors solutions is therefore paramount when attempting to derive barriers to entry and key aspects your solution will need to deliver in order to establish a foothold. I find a good and visual method to display such information is the use of the “Booz Balls” consultancy practice which you will often see utilised in many consultancy publications. Carrying on with our digital collaborations solutions analysis, this would look something like the following:

Key Functionalities

Comprehensiveness of solution offer

Using this method of displaying information again gives the reader the ability to make a number of conclusions in one quick comparison snapshot without having to read through pages of research. For instance by looking at the above I can quickly derive the following:

1. Core Functionalities – There are a number of core functionalities in the Digital Collaboration space and there is limited differentiation with many of the big players offering very similar functionality regarding their solution. Importantly there doesn’t seem to be any USP (unique selling point) amongst the solutions on the market.
2. Comprehensiveness – There is no stand out performer displaying a comprehensive offer in all of the areas analysed, however we can identify Workplace, Slack, Asana and Office365 as the best performers. We can also see that Confluence has the weakest offer relative to it’s peers.

Research is therefore a core concept when keeping up with market and competitor trends, but spending a bit of time creating a few templates that can be easily updated is also very important. Such templates can show core information at a glance which can help you to understand and digest the research you have conducted which in turn will allow you to draw conclusions and identify opportunities.

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