Competitor Analysis

Competitor Analysis

Analyzing The Competition — Knowing Their Strengths and Weaknesses

For companies to know their own market fully, they need to look closely at its participants. Besides customers, suppliers, creditors, institutional bodies, and other relevant factors, competitors play a central role. Only those who are well-informed about their competitors, and the competitors’ products, can truly say they know their market.

So how does a company get a thorough picture of its particular market and competitive situation? Through continuous competition analysis that provides comprehensive information and supplies a basis for strategic planning. The primary goal is to research and assess competitor strengths and weaknesses, obtain information about their strategies, market penetration, and customer loyalty, and identify previously unknown market potential and new trends for the benefit of one’s own company.

Objective Competitor Comparison: Important to Business Strategy

To gain a clear picture of the competitive landscape, companies create competitor profiles to help them identify their own company’s most important differentiating characteristics and assess how much of a potential threat individual competitors pose. They strive to obtain information that can benefit the management team in developing and implementing strategies, and can also be used in product development and marketing processes.

Such comparisons focus, in particular, on competitor strategies, performance, and market share. Strategic comparisons provide information on competitors’ portfolios, product quality, price positioning, brand strengths, financial strength, partnerships, and visions. Performance comparisons, meanwhile, offer information on competitor companies’ sales revenues, growth, financial results, assets, liquidity, and creditworthiness. And market share comparisons rank companies within specific markets, giving information about sales volumes and revenues, technologies, and regions in which the competitor is active.

Companies rely upon high-quality data sources to help them obtain these results. Such sources include, in particular, credit reports, annual accounts, analyst reports, and compliance audits, as well as newspaper articles and press releases. Product brochures, price lists, advertising campaigns, locations and branch offices, and patent application can all provide valuable information on competitors’ market behavior. And suppliers, events and trade fairs, sales and industry meetings, seminars and conferences, and social networks can also serve as sources of information and data for use in analyzing one’s competition.  

Competitor Analysis with SAP

Comprehensive, systematic competitor analyses provide companies with valuable information. However, compiling facts, gaining insight into individual competitors, and comparing services are all associated with a wide variety of manual processes. An enormous amount of labor is involved: companies have to obtain, capture, manage, and evaluate data on competitors manually, and then use that data to derive the key figures they need. All of this requires standardized processes and key figures, structured data management, and effective reporting.

Discover SOPLEX CAS (Competitor Analysis System), our SAP competitor-analysis solution.