7 Competitive Landscape Frameworks

Competition. It is something every startup of any size has to contend with. As an entrepreneur, you quickly learn that there is not just you battling it out on a level playing field, but a whole host of other companies doing the same. For this reason, understanding your competition is a crucial part of running a successful business. Whether you are a large corporation, a small venture, or a solo entrepreneur, understanding your competitive landscape—and what you can do to differentiate yourself from the competition—is crucial. 

Competitive Landscape Frameworks (CLF) help startups to know the competitive landscape for their ventures. These frameworks also help users identify the types of competitors in a market and outline their strengths and weaknesses. These frameworks are used globally by startups and organizations alike. To help startups understand competition, they often turn to the seven frameworks listed below. These frameworks provide a common language for describing the competitive landscape of space and can help startups identify competitive threats.

SWOT Analysis

The most basic framework used to analyze the competitive landscape. It is a framework first developed in the 1950s when the research was emerging that suggested that companies needed to be aware of their opportunities as well as their weaknesses. The SWOT Analysis has been used in many different ways since its inception. Today, one of the most common uses of SWOT analysis is for business strategy, although it has also been used in marketing, and management and is often used for individual career development. It helps you identify the strengths, weaknesses, opportunities, and threats of your competitors. 

SWOT analysis is a simple analysis that is done to understand the internal and external factors that affect a business. It aims to understand the strengths and weaknesses of a company to enable the business to take the right strategic decisions. The analysis helps a company to analyze its internal strengths and weaknesses, such as internal resources, management, products, and brands. External business factors like market opportunity, competition, and SWOT analysis help a company to determine the strengths and weaknesses of their competitors to enable them to decide on a business plan.

Perceptual Mapping

Perceptual mapping is the next competitive landscape framework after the SWOT analysis. While SWOT analysis looks at the internal factors of a company, perceptual mapping looks at the external factors. A perceptual mapping framework is a graphical representation of how you or your company perceives your competitive landscape and the different companies or products that you or your company will be considered in the eyes of the customer. You start by mapping the competitive landscape of your market and the different products that are currently in the market. Then you map your product and company to the competitive landscape and find where you fit. 

Using the perceptual mapping framework, a company can map the competitive landscape of the industry they are in. They can map the different companies in the industry they are in, and what they offer to the customer. At the end of the mapping exercise, a company can create a map that shows the different ways they can compete with the other companies. This map can be used to create a strategy to compete with the other companies in the industry.

Strategic Group Analysis

You might have come across this competitive landscape framework before and wondered, “What is a Strategic Group Analysis?” Well, it is a competitive landscape framework used to categorize and analyze the internal and external factors that affect a company, market, and industry. A Strategic Group Analysis framework is a type of SWOT analysis that groups companies together based on specific criteria. Each of these “strategic groups” can be analyzed in a variety of ways, including looking at the companies that comprise the group, their products and services, the market segments to which they cater, and the strategies and resources they use to compete with each other. 

The framework helps companies to understand the internal and external factors that affect the business. Internal factors include organizational structure, resources, and capabilities, while external factors include the market, competitors, and government regulations. One way to think of the Strategic Group Analysis framework is that it is a map of the company and its competitive landscape. It helps identify where there may be regions that are strong or weak, where opportunities might exist, or what areas of general strength and weakness might be found. The framework is commonly used in the banking and insurance sectors, as well as in industrial design.

BCG Growth-Share Matrix

The growth-share matrix was first introduced by Boston Consulting Group in 1968 and was later used by GE CEO Jack Welch in the 1980s. The growth-share matrix is also known as the Boston matrix or Boston Box. It is designed to help executives identify the most important factors affecting the profitability and growth of their company. To create the matrix, executives must first identify their company’s two most important dimensions: market attractiveness and competitive strength. Market attractiveness refers to the growth potential of the industry in which a company operates. 

BCG Growth-Share Matrix is a graphical representation that helps to determine the relative importance of factors that affect the success of a company. It helps to determine the critical success factors for a company such as market penetration, growth rate, and profitability. Once the factors are determined, a BCG growth-share matrix helps you to determine the relative importance of each factor. This graphical representation helps to identify the relative importance of a factor for a company’s growth and profitability. The growth-share matrix helps to determine the relative importance of factors that affect a company’s profitability and growth.

Porter’s Five Forces

Porter’s five forces model helps to analyze the competitive landscape of an industry and enterprises in the industry. The model helps to evaluate the competitive landscape in five factors that affect the marketplace and the business. The five factors that are analyzed in the model include buyer power, supplier power, the threat of new entrants, the threat of substitutes, and industry rivalry. Market shares and relative prices of the products and services in the marketplace are analyzed in the model. When all factors are analyzed, a business can decide on an enterprise strategy that could help them to differentiate itself from the competition. 

This model is a competitive landscape framework that analyses an industry as a whole and is a static model that does not show the intuition behind the factors. The model is not a direct competitor of other competitive landscape frameworks such as SWOT, PESTLE, BCG, and Value Chain Analysis. The model uses micro environment factors to analyze the influence of the external environment on a given organization. The five factors are interrelated with each other and the strongest forces in an industry determine the profitability of the industry. An understanding of the five forces model of competition and the concepts behind it is very helpful in competitive landscape analysis.

PESTLE Analysis

PESTLE Analysis is a tool used in competitive analysis to evaluate the health of a company. It is based on the concept that a company has three main factors that are crucial to its success: business environment, product offering, and core competencies. These three factors are represented by different tools called “pestles” to assess their quality. It involves comparing two or more firms on key attributes and then categorizing them based on those attributes. This can then be used to generate insights into how the different companies differ and how these differences might impact their ability to compete in the market. 

Pestles can be divided into two categories: qualitative and quantitative. Qualitative pestles are used to evaluate the business environment, such as financial resources and strategic alliances. Quantitative pestles measure the company’s strength in the product and core competencies areas by using scale scores or standardized scores. With this tool, it is possible to measure how strong a company is against other competitors in terms of financial strength, strategic alliances, and product quality. A pestle analysis is most commonly used in the context of business strategy, where it is used to provide an overall assessment of a company’s position in the market. 

Value Chain Analysis

Value chain analysis is the process of identifying all the key components of a business, from procurement to customer service. Value chain analysis helps businesses identify the various stages of production and understand where their costs are being incurred. By understanding the value chain, companies can improve efficiency and reduce costs. By understanding the value chain, companies can better coordinate their activities, improve efficiency and develop competitive advantages. The goal of value chain analysis is to identify opportunities to increase value while minimizing costs by understanding the entire process from the purchase of raw materials to the sale of the final product.

One way to perform a value chain analysis is to work backward. Start by identifying all the inputs that go into the final product, such as raw materials and labor costs. Next, identify how these inputs are transformed into the final product. Finally, subtract the cost of labor and any other fixed costs (such as rent) to come up with a total cost of production. Once you have identified all the costs in your supply chain, you can analyze where you are spending more money than you should be. This will help you identify areas where you can reduce costs or improve efficiency.

Conclusion

There are several competitive landscape frameworks available to help you analyze the competitive landscape of your industry. It is important to choose the competitive landscape framework that best fits your needs. It is important to understand that the competitive landscape framework should be used to assist the management of your business and not the management of the framework itself. 

The competitive landscape framework should be used to identify strengths and weaknesses to enable the company to take the right strategic decisions. Once you have selected a competitive landscape framework, it is important to understand how to use it to its full potential. With the right framework and the right understanding, you will be able to identify the strengths and weaknesses of your competitors and create a startup marketing plan to differentiate yourself from the competition.

Additional Reading:
– Market Research for Startups