Steps Outlining Competitor Examination - Summarization of Competitive Assessment
In the dynamic world of business, understanding one's competition is the first step towards strategic success. This article, part of our complete series on Strategy, delves into the intricacies of conducting a comprehensive competitor analysis for the FMCG sector.
The sales force serves as the best source for building and updating a competition portfolio. Identifying current and future competitors in the market involves analyzing target products, including brands and unbranded players in the hair oil sector, as well as potential new entrants or discontinuations.
A robust FMCG competitor analysis is a multi-step process that integrates competitor identification, detailed performance metrics, SWOT and strategic evaluation, market positioning, supply chain analysis, and application of competitive frameworks, culminating in strategic recommendations tailored to the sector’s unique fast-paced market dynamics.
- Define the Purpose and Scope Start with a clear introduction outlining the purpose and relevance of the competitor analysis in the FMCG context.
- Identify Competitors List key direct and indirect competitors. Direct competitors offer similar products targeting the same consumer base; indirect competitors solve the same consumer needs differently.
- Gather Key Metrics and Performance Data Collect relevant quantitative data such as market share, revenue, growth rate, on-shelf availability, out-of-stock rate, and supply chain performance metrics specific to FMCG.
- Conduct SWOT Analysis For each competitor, summarize strengths, weaknesses, opportunities, and threats, ideally using visual tools.
- Analyze Market Positioning Understand how competitors position themselves—target audience, unique selling propositions, geographic focus, and niche markets.
- Evaluate Strategic Moves Track recent competitor initiatives like product launches, pricing changes, partnerships, mergers, acquisitions, or distribution changes to understand their evolving strategies and impact on market dynamics.
- Apply Industry Models Use frameworks like Porter’s Five Forces to assess competitive rivalry, supplier power, threats of substitutes and new entrants, and buyer power in the FMCG industry.
- Distributor and Route-to-Market Assessment Examine competitors’ distribution networks and route-to-market strategies, since FMCG heavily relies on supply chain and distributor efficiency to maximize availability and sales.
- Synthesize Findings and Develop Recommendations Compare competitors against your own company, identify opportunities to exploit weaknesses or gaps, and outline threats and necessary strategic adjustments.
Knowing direct and indirect competition is crucial, as it helps in understanding the preferences of customers for other products over hair oil. If the competition is superior, two strategies can be employed: either replicate the top competitor's strategies slowly or go creative/innovative to challenge the market leader.
Executing strategies effectively is crucial, and a contingency plan should be in place to anticipate competitor reactions. A marketing strategy is necessary to capitalize on the insights gained from competitor analysis and move ahead of the competition.
For a more in-depth understanding, a video on Competitive Analysis is available from Marketing91. Building a competition portfolio that includes each product of competitors, their features, logistics, tangible features (product qualities), and intangible features (product services) is crucial for a comprehensive competitor analysis. This portfolio should be treated like a Management Information System (MIS) and updated regularly.
Finally, understanding the market share and performing SWOT analysis are essential steps for a competition analysis to help organizations outperform their competition. Documenting strategies can be useful for future generations of marketers.
[1] Competitor Analysis: How to Do It and Why It's Important [2] Porter's Five Forces: Analyzing the Competitive Forces in Your Industry [3] How to Identify Your Competitors [4] Key Performance Indicators (KPIs) for Fast-Moving Consumer Goods (FMCG) Brands [5] Competitor Analysis: A Comprehensive Guide for Business Growth
- To strengthen your position in the fast-paced FMCG market, it is essential to conduct a comprehensive investment in understanding your competitors through a financial analysis of their business strategies and performance.
- To gain a competitive edge in the hair oil sector, analyzing the financial aspects of both direct and indirect competitors, including their market share, growth rates, and pricing strategies, will provide valuable insights for making informed financial investment decisions in business-altering strategies.
