Competitive Analysis Skill

Overview

Use When

• Use when drafting or revising the competitive analysis section for a plan, proposal, or pitch.
• Use when the business needs a credible account of competitors, substitutes, and market position.
• Use when pricing, marketing, or moat claims need to be tested against reality.

Do Not Use When

• Do not use to make vague claims that the business has "no competition".
• Do not confuse competition mapping with customer segmentation or market sizing.
• Do not claim a moat unless the evidence supports it.

Required Inputs

• Offer definition, target customer, price point, and operating geography
• Known direct competitors, indirect competitors, and substitutes
• Any evidence on competitor features, positioning, channels, and economics
• Adjacent market, marketing, and pricing sections that shape the competitive frame

Workflow

1. Define the competition from the buyer's point of view, including substitutes and inaction.
2. Profile the most relevant competitors and compare them on decision-relevant dimensions.
3. Assess market position, barriers to entry, and the strength of the claimed advantage.
4. Translate findings into a practical positioning argument for the business.
5. Reconcile the analysis with target market, pricing, sales, and risk assumptions.
6. Flag weak or unsupported moat claims that will fail under diligence.

Quality Bar

• Competitors are real, relevant, and analysed on criteria that influence choice.
• The positioning argument is specific and evidence-based.
• Claimed advantages are concrete, not slogan-level.
• The section shows how the business wins, not just who else exists.

Anti-Patterns

• Ignoring substitutes or the customer's option to do nothing.
• Calling routine strengths like "good service" or "quality" a moat.
• Using a SWOT table without real comparative analysis behind it.
• Competitive claims that contradict channel, margin, or execution reality.

Outputs

• A finished or revised Section 06 competitive analysis
• A competitor matrix, positioning argument, and moat assessment
• Explicit assumptions or diligence gaps to resolve before finalisation

Required Elements

1. Direct competitors Companies offering the same solution to the same market
2. Indirect competitors Alternative solutions to the same problem
3. Substitute threats Different approaches customers might take (including "do nothing")
4. Competitor profiles (3-5 key competitors) Detailed analysis using template below
5. Competitive matrix Feature/capability comparison with quantified scoring
6. Market share analysis How share is distributed and measured (Farris)
7. SWOT analysis Strengths, Weaknesses, Opportunities, Threats
8. Competitive advantage / moat What makes the business defensible
9. Barriers to entry What stops new competitors from entering
10. Market positioning Where the business sits relative to competitors
11. Guerrilla positioning How to compete asymmetrically against larger players

Competitor Profile Template

Company:
Website:
Founded / Years in market:
Size/Revenue (estimated):
Target market:
Key products/services:
Pricing model and range:
Strengths (be honest):
Weaknesses (verified, not assumed):
Market share (estimated %):
Revenue share vs. unit share: [Premium / Parity / Volume player]
Digital maturity: [Analogue / Digitising / Digital-first / AI-augmented / Immersive]
Threat level: [High / Medium / Low]
Likely response to our entry: [Aggressive / Moderate / Indifferent]

Competitive Matrix Format

Market Share Analysis (Farris)

How Share Is Measured

Industry Concentration

CR4 = Combined market share of top 4 firms
HHI = Sum of (each firm's share)^2

Types of Competitive Moats

Guerrilla Competitive Strategy

Asymmetric Advantages

• Speed Launch and iterate faster than incumbents can approve a meeting
• Focus Own a narrow niche that is too small for big players to care about
• Relationships Build personal connections that corporations cannot replicate
• Flexibility Customise solutions while competitors offer one-size-fits-all
• Values alignment Appeal to customers who prefer local, ethical, or authentic brands

Positioning Against Incumbents

• Redefine the category criteria in the customer's mind
• Compete on dimensions incumbents cannot match (speed, personalisation, community)
• Target underserved segments the incumbent ignores
• Use education-based marketing to position as the expert, not the bigger brand

Generation Process

1. Ask for: industry, key competitors (if known), primary differentiator
2. Research direct, indirect, and substitute competitors
3. Build competitor profiles with honest assessment
4. Calculate or estimate market share distribution
5. Create competitive comparison matrix with quantified scores
6. Conduct SWOT analysis with real weaknesses
7. Identify and articulate the competitive moat with durability assessment
8. Define guerrilla positioning if competing against larger players
9. Assess sustainability of the advantage over 3-5 years

Quality Criteria

• Analysis includes indirect competitors and substitutes (not just direct)
• Competitor strengths are acknowledged honestly investors spot bias
• SWOT weaknesses are real, not disguised strengths
• Market share is quantified or estimated with stated sources
• Competitive advantage is specific and defensible, not "better customer service"
• Moat durability is assessed how long before competitors can replicate
• Positioning is distinct clear blue water between this business and alternatives
• Guerrilla strategy is included for startups and small businesses

Porter's Five Forces Industry Analysis

references/competitive-strategy-porter.md

references/industry-structure-porter.md

04-market-analysis/

meta-due-diligence/references/osint-business-intelligence.md

Business Model vs Strategy Analysis (Teece)

1. Do they share the same business model as usSection (If yes, strategy must differentiate us)
2. What makes our version of the model harder to replicateSection (IP, relationships, data, speed, community)
3. Can a competitor adopt our model quickly, or do we have complementary assets (brand, supplier relationships, regulatory approvals, distribution) that they cannot easily acquireSection

• Intellectual property (patents, trademarks, trade secrets)
• Complementary assets distribution networks, customer relationships, manufacturing capacity
• First-mover switching costs (customers embedded in our platform or processes)
• Network effects (value increases as more users join)
• Complexity and tacit knowledge embedded in processes not visible to competitors

Differentiation Analysis (Kaza)

References

• Competitive metrics and share analysis: See

  references/competitive-metrics.md

  for market share calculations, concentration analysis, brand development indices, and competitive benchmarking formulas from Farris
• Positioning and differentiation: See

  references/positioning-strategy.md

  for guerrilla positioning tactics, value-based differentiation frameworks, perceptual mapping, and blue ocean positioning approaches
• Porter's Five Forces and competitive strategy: See

  references/competitive-strategy-porter.md

  for the full Five Forces framework with Uganda/EA examples, three generic strategies (cost leadership, differentiation, focus), the four-component competitor analysis framework (future goals, current strategy, assumptions, capabilities), market signals, and strategic groups from Porter (1980)
• Industry structure, strategic groups, and industry evolution: See

  ../04-market-analysis/references/industry-structure-porter.md

  for strategic group mapping methodology, mobility barriers, industry evolution driving forces, and the product life cycle critique from Porter (1980)
• Competitor intelligence methodology: See

  ../meta-due-diligence/references/osint-business-intelligence.md

  for the 5-layer OSINT framework for gathering competitor intelligence in low-data EA markets physical surveys, digital footprint analysis, supplier/distributor conversations, and red flag registers
• Competitive strategy tools: See

  references/competitive-strategy-tools.md

  for competitor analysis framework, competitive position rating (0-5 scale), strategy maps, strategic gap analysis, generic strategies, value chain analysis, strategy evaluation tests, competitive life cycle, and Blue Ocean Strategy from Evans, Harris & Lenox, and Fahey & Randall
• Strategy Choice Cascade: See

  references/strategy-cascade-framework.md

  for the five-question strategy cascade, five strategy traps, where-to-play and how-to-win choices, activity system mapping, strategy logic flow, reverse engineering strategic choices, and cascade-to-business-plan mapping from Lafley & Martin
• Business model vs strategy distinction, value capture mechanisms, business model archetypes: See

  ../03-products-services/references/business-models-innovation-teece.md

  for Teece's full framework
• Differentiation types and signature touch principle: See

  ../07-marketing-sales-strategy/references/small-business-unconventional-strategy.md

  for Kaza's four differentiation layers and case studies
• 3C Strategic Triangle and competitive dynamics (Ohmae): See

  references/mind-of-strategist-ohmae.md

  for Ohmae's 3C Strategic Triangle (corporation/customer/competition), Key Factors for Success identification method (hypothesis-first + KFS industry table), four routes to strategic advantage (KFS focus, relative superiority, aggressive initiatives, Strategic Degrees of Freedom), Strategic Planning Unit tests, customer segmentation (objectives vs. coverage), profit diagrams, issue diagrams, challenging constraints method, and Uganda/EA application from Ohmae (McGraw-Hill, 1982). Read when defining the competitive positioning logic, especially for businesses that cannot compete on all dimensions and need to identify where to concentrate.
• Layered competitive advantage, Value Net, and purchase cycle (Portable MBA): See

  references/competitive-dynamics-portable-mba.md

  for the onstage/backstage competitive advantage model (Coke/Pepsi case), 13-step purchase and consumption cycle as differentiation audit, value chain architecture disruption (Nucor/IKEA/Dell cases), outsourcing risk taxonomy (non-performance/value expropriation/elimination), complementors as sixth competitive force (Brandenburger & Nalebuff Value Net), five determinants of complementor power, and Uganda/EA application from Fahey & Randall, eds. (Wiley, 2000). Read when assessing whether competitive advantages have backstage support, identifying non-obvious differentiation points across the purchase cycle, or evaluating outsourcing risks.
• 24 competitive and business analysis methods (Fleisher & Bensoussan): See

  references/competitive-analysis-methods-fleisher.md

  for the complete toolkit of 24 methods across six categories (strategic/industry, competitor intelligence, financial, environmental, futures, analytical process) including Nine Forces, competitive positioning, business model analysis, SERVO, McKinsey 7S, shadowing, win/loss analysis, benchmarking, war gaming, country risk, driving forces, technology forecasting, ACH, and linchpin analysis. Includes FAROUT evaluation framework, Business Plan Application Table, Method Selector, and Uganda/EA adaptations for low-data markets, informal competition, and relationship-based intelligence. Source: Fleisher & Bensoussan (FT Press, 2007). Read when selecting the right analysis method for a specific competitive question, explaining method choice to investors, or stress-testing analytical assumptions.
• SWOT/TOWS, PESTLE, Porter's Five Forces, value chain structured descriptions: See

  ../meta-market-validation/references/business-analysis-techniques-cadle.md

  (Chapter 1 and Chapter 4 tools) for precise, step-by-step descriptions of PESTLE (Tool 1), Porter's Five Forces (Tool 2), SWOT/TOWS (Tool 6), Value Proposition Analysis (Tool 33), and Value Chain Analysis (Tool 34) with guidance on correct application and common mistakes Source: Cadle, Paul & Turner (BCS, 2010). Read when setting up the competitive analysis framework or when the client needs the analytical approach explained clearly.