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The Lay of the Land
by Jit Agarwal |
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Market analysis is
an activity that most corporations engage in at the launch of a venture. A good
competitive analysis covers the three areas noted below in great depth and
provides the market guidance necessary for a corporation to succeed in the
marketplace. Jit Agarwal writes...
Analyzing the competitive landscape is a core requirement for almost any
enterprise to succeed in the market. Market analysis is an activity that most
corporations engage in at the launch of a venture. However, it should also be
done periodically throughout the life of the company, product or technology,
for mid-course corrections. A good competitive analysis covers the three areas
noted below in great depth and provides the market guidance necessary for a
corporation to succeed in the marketplace.
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The Friendly Plains: A solid competitive landscape analysis should seek
to first identify companies operating in the market that offer products and
services complimentary to your products and services. These companies represent
potential opportunities for your organization to create multiple win-win
engagements, resulting in a mutually beneficial partnership. Often the easiest
mechanism to identify these potential partners is trade organizations or
Specific Interest Groups (SIGs). Scan these sources for organizations which
participate in the market space your products and services target. You will
quickly find those that provide a set of services and products complimentary to
your own. The next steps are to create a winning proposal based on a mutually
beneficial agenda and to solicit support from these partners. In the difficult
marketplace that we are facing today, other similarly minded organizations
should be willing to join your efforts if there is a mutual win-win benefit for
all involved. Often a few small companies that band together in the marketplace
can challenge some of the larger more established players in the market. Think
Raptors versus Tyrannosaurus Rex. There is safety in numbers, seek to find it.
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The Adversarial Mountains: The next area a competitive landscape
analysis should cover is competitors in the market. These are companies that
provide a directly competitive good or service to your own and should represent
the focus of your competitive attention and energy in the market place. Again,
the easiest way to identify your adversaries is similar to the one mentioned
above, SIGs and trade organizations. Once you've identified these companies,
realize that there are multiple perspectives from which you should examine
them. First, you can analyze their customers and market presence, which serves
as an indicator of how seriously you must take this competitor and as also
reveals a potential set of customers for you to target for your products and
services. The second aspect of a competitor to examine is what partners have
they lined up in the market. This serves two purposes, first to understand how
important they are to the market ecosystem and second to create a list of
partners that you may seek to solicit for your efforts as well. Finally, a
competitor should be examined for their weaknesses and strengths. It may be the
case, and this is not uncommon, that a competitor once closely examined reveals
itself to be more of a partner or an ancillary. Deeply examining the true
nature of a so called 'competitor's' strengths and weaknesses versus your
organization may reveal that you have nothing to fear from them in the final
analysis. The fact is sometimes companies can and should combine with their
rivals to augment each other's weaknesses and accentuate strengths. Such a
combination can also create a larger market presence for the collective whole.
In the event that 1+1=3, then a competitive combination makes a lot of sense.
Don't rule out this option.
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The Related Valleys: Finally any good competitive analysis wouldn't be
complete without examining those companies and industries related to your own,
but not directly in your own market space. For example if you make software,
consider the hardware market and vice versa. If you make security products,
consider optimization and virus products. Other examples abound. Simply put
examine complimentary, ancillary, up-market and down-market companies and
industries from your own. The key of this analysis is to examine and identify
other industries and companies, who may at some point in the foreseeable
future, appear on the competitive landscape and determine how to react when and
if they do. This prevents nasty and unwanted surprises when a "new"
competitor enters the field and represents a threat to your organization. Often
proactive management, of this area of the competitive landscape, can result in
a win-win deal for your organization and new entrants. An example of such a
deal might be a set of preliminary agreements that keep new entrants focused on
your competition allowing you both to work together for mutual gain. This is
especially true in fiercely competitive markets. You only have so much
corporation energy and effort available, if you can co-opt the competition
rather than fight it, why not?
Netnet, a good competitive
analysis will enable your organization to successfully establish its position
in the market. If one of the tips mentioned above enables you to effectively
navigate the market's choppy waters, then it may help you reach your desired
end-game.
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