Reading: Competition Analysis Key Takeaways

The third part of a 5Cs analysis considers competition within the industry or market sector where the company or brand operates. Michael Porter’s Five Forces Model is one of many useful frameworks that can be applied to analyse competition within a sector. The five forces that impact an industry or sector are:

1. Rivalry among existing competitors:
   Define who those competitors are and what are their key competitive characteristics
2. Bargaining Power of Suppliers:
   Define who the main suppliers are and how they influence the sector
3. Bargaining Power of Buyers or End Users:
   Define who the buyers are and how their power influences the sector
4. Threat of Substitutes:
   Define what the most likely brands of substitutes are and why, and how they will influence the sector
5. Threat of new entrants:
   Define recent new entrants to a sector and note why they are likely to succeed

Competitive Analysis can also consider a sample of key competing brands or companies on the basis of what is provided to customers in terms of a value proposition. In this case, the analysis would:

1. Consider value proposition
   A detailed analysis and understanding of the brand’s/company’s value proposition at a point in time, based on its unique characteristics, other market requirements, company strengths and weaknesses.
2. Research key competitors
   Compile a detailed list of direct and indirect competitors within a specifically defined market.
3. Research common customer choice criteria
   This can be done through various marketing research techniques
4. Evaluate each competing brand against the common choice criteria
   For each criterion, each competing brand can be scored to compare likely current performance.