Understanding the strategies of your competitors and developing your marketing approaches likewise, can help your company stay ahead in the game.
There are various approaches to competitive research; choosing the right one or the right combination has helped top global brands become the most visited websites on the Internet today.
To perform efficient competitive research, you must adopt the right competitive research frameworks.
What is a competitive research framework?
A competitive research framework is essentially a model that helps in charting out the path to research your competitors. It helps you to work on relevant information by structuring your market analysis.
There are various competitive research frameworks available. Let us find out the 5 most efficient ones below.
Different competitive research frameworks – explained.
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SWOT Analysis
The SWOT analysis helps you in the evaluation of internal and external factors that have an impact on the business. The SWOT analysis is the short form of:
S- Strength (internal factors that are advantageous for the business)
W- Weakness (internal factors that are disadvantageous for the business)
O- Opportunities (external factors that possess opportunities for the business)
T- Threats (external factors that pose threats to the business)
SWOT Analysis is often used in strategic planning that helps in identifying the potential competitive advantages. For example, having a better relationship with your stakeholders might help you offer your products at a lesser price than your competitors. You can use this analysis to look at your decision’s strengths, weaknesses, opportunities, and threats.
Marketing agencies and managers use SWOT analysis to compare the internal and external factors to determine the competition across different marketing channels like websites, social media, etc. In addition, it helps them to frame an effective strategy for the company they are working with.
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Porter’s Five Forces
Porter’s Five Forces framework examines the competitive forces of the market in a segment. It evaluates the market or industry as a whole according to the give five elements:
- New Entrants- The threats associated with new entries, how easy it would be for new businesses to set up their entry.
- Buyers- The amount of bargaining power that the buyers possess.
- Suppliers- The amount of bargaining power that the suppliers possess.
- Substitutes- How much likely it is for the customers to switch to an alternative product.
- Competitive Rivalry- The intensity of the rivalry includes information like the total number of firms competing, their growth, etc.
These factors help to determine the amount of competition a company faces in the industry.
The framework is beneficial in situations where marketers wish to analyze the industry’s competitive structure. It is a helpful tool that determines whether you should enter a new market and your chances of growing there. In addition, it gives you the right insights to shape up your strategies to survive in the industry.
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Strategic Group Analysis
Yet another competitive analysis framework, the strategic group analysis, helps you analyze cluster-based organizations with similar strategies. Firstly, it is important to identify the cluster for a given strategic dimension. Then, one can easily notice the impact of different strategic approaches; for example, they can analyze the closest competitors.
If you have a hypothesis about the business dimensions, this analysis framework will prove helpful. Creating strategic groups following your digital marketing tactics and analyzing its performance to find out the fault by exploring different dimensions can help you determine the factors related to success. In addition, it would give you information about the position you have in the industry.
This framework analyzes the company’s product and analyses it against the industry’s competitive landscape as a whole. The model is advantageous in deciding which products to invest in based on the competition in the market. The most abundant use of this framework is to help weak farms determine their product portfolios. It helps them to decide the better investment opportunities based on cash flow, production, etc. It can also help in digital marketing strategies by determining the growth of various marketing channels against the ROI. With the framework, marketers will decide which channels to invest in more and which ones to stop using.
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Perceptual Mapping
It can be described as your product’s visual representation of perception compared to the other available alternatives. It helps in showing the position of your brand, product, etc., against that of your competitors. Marketers use this framework to show the results of their collected customer inputs. It helps in understanding how the customer views your business and that of your competitors. It will help in understanding the right marketing strategies that will help to attract your target audience.
Conclusion
Selecting the right competitive research framework is indeed a vital decision since it is bound to affect your overall marketing strategies. It must be based on careful consideration of your specific business needs and targeted objectives.
