One of the best tools you can use to define new opportunities for growth is the Competitive Matrix Analysis. Using it will help you find opportunities to innovate with new or improved products, services and marketing strategies.
A competitive matrix is used to critically profile and compare your company against your known competitors. It is an analytical tool that helps you establish your company’s competitive advantage in an easy to use and read format. At one glance you should be able to see your company’s competitive landscape, your position in a given market and possible opportunities to differentiate your company’s products and services from the competition.
If you’ve been following my recent columns on Innovation Mapping, the Competitive Matrix is another tool to identify “White Space” opportunities for new or existing markets.
How to Build a Competitive Matrix:
This matrix can be just a simple chart or table and typically starts with evaluation factors that are pertinent to your company’s industry and that will help you begin to differentiate your products and services from your competitors. You can also include features and, more importantly benefits in these comparative factors. For features, answer simply Yes or No, and for benefits go deeper and assign a ranking versus your competitors of 1 – 5, with 1 being low and 5 being high. Ultimately, you will want to define those features that deliver significant benefits to your customers when compared to the competition.
Here’s an example of a Competitive Matrix
Analyzing the Competitive Matrix
Your matrix will undoubtedly be longer than the example above. Try to identify all of the key features or benefits that are important to your existing and potential customers and then rank how your company compares with your competitors.
Now that you have completed the competitive matrix it’s time to analyze what it means to your company’s Profitable Growth strategy. Here are a few things the matrix may reveal:
- Improve your service function to help customers use your products more effectively
- Train your sales team on selling benefits not features
- Develop a customer training function that trains the people who will use your products how to use them in the safest and most effective way
- Develop new ways to easily customize your products to meet the differing needs of customers and will differentiate your products from the competition
- Develop a new marketing campaign linked to a revised sales plan to communicate your message of cost effective benefits more clearly to potential customers
- If you find an opportunity to develop a new product that will further differentiate your company, form an internal team, set a time line and find available and affordable resources to help you get this done as quickly as possible
- Use this competitive matrix as an internal sales training tool to help your sales staff and outside reps communicate your company’s competitive advantage more clearly to customers
- Use the matrix to find ways to improve your products or services when compared to your competitors
Why This is Important
One thing we know about profitable growth is that companies that design and deliver more distinctive products can command a higher margin and are therefore more profitable. If your company is competing today only on cost then your future is at risk, this should be a Red Flag. Your products can easily be outsourced to lower cost producers either in the US or off-shore.