Porter's forces model helps us understand what competitors — in the wider sense discussed earlier — are doing. It also treats competitors mainly as threats. In fact, for many organisations what other similar organisations do can be a source of learning.
Benchmarking in the private, public and non-profit sectors requires seeking out and learning from best practice in similar, and sometimes not so similar, organisations.
Many managers in all sectors learn from what others are doing by attending conferences and joining professional bodies which embrace staff from different and often competing organisations. In this age of the rapid dissemination of information, whatever you do will not be new for long, and your competitors and others will try to emulate and improve on what you do.
You can see competition as one of the spurs that drive you to ensure you give value to your customers.
One approach to analysing competitors is to use the four key elements of competitor analysis put forward by Greenley (1986):
- The nature of competitors and any potential changes: you need to watch your environment constantly, and in particular, note who is moving in and out of it.
- The objectives and strategies your competitors appear to be pursuing: you have to try to interpret their actions. To a degree this means guesswork or, perhaps more correctly, detective work to try to inform your guesses.
- The main strengths and weaknesses of each competitor: they often determine the options open to you.
- The effects of competitors on your own organisation and its marketing operations: this point is a reminder that while you are analysing your competitors, they are likely simultaneously to be analysing you!
You may wish to construct your own framework for the key components of competitor analysis in your sector or industry, based on the factors that determine success or failure in it.
What is important to analyse in your competitors will depend on various factors, such as:
- what is analysable (what you can get information on)
- what is changing in your industry or market-place and the demand for the product or service being competed for
- what factors are unchangeable in the short term
- what factors can be changed
- what customers say they like or prefer, and dislike.
In this way, competitor analysis enables you to address a central theme of this book: how you can help to generate and provide what your customers value.
You should clearly not lose sight of them while you are looking at your competitors. In particular, you should not just copy what your competitors do in the hope that this will ensure that you continue to serve your customers.
You should use competitor analysis to improve your current product or service and find ways to offer a better performance to your customers. If you can understand the key components for success, it should give you additional clues about what your customers value.
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