A competitive matrix can assist you in better understanding your market segment and identifying opportunities to differentiate your brand from the competition, create better products, and develop stronger marketing plans.
Competitive analysis helps you identify your competitors and research their product, sales, and marketing strategies. You will get to know your place in the market, how you can stand out from the competition and how you can improve your processes.
What is a Competitive Matrix?
A competitive matrix is an industry analysis tool that compares the characteristics of multiple brands within their market segment to identify their differences, strengths, and weaknesses.
This information will help you discover your own competitive advantage and identify opportunities to grow your business.
A competitive matrix can be as simple as a chart listing each competitor along with a list of their characteristics and advantages. Or it can be as complex as a chart with x and y axes as they represent unique positioning within a market segment.
Topic: Difference Between digital marketing or traditional marketing.
What Is The Purpose Of A Competitor Matrix?
In other words, A properly constructed and analyzed competitive matrix will provide you with a wealth of quantitative and qualitative data to support your business decisions.
Improving your business, surpassing your competitors, rising to top of your market is the ultimate goal and hence the purpose. However, in order to reach this end goal, smaller goals or milestones must be achieved.
A competitive matrix will also help you achieve them. These milestones include:
- Developing or enhancing your unique value proposition.
- Improving your product by comparing it to aspects or features of competing products that customers value.
- Take advantage of competitors’ weaknesses.
- Get benchmarks to measure your growth against.
- Discover market segments that competitors have not reached.
- Create a new product category by identifying gaps between what your competitors offer and what customers need.
How To Create A Competitive Profile Matrix?
A competitive profile matrix is just another format of a competitive matrix. It helps you highlight the relative strengths and weaknesses and value proposition of both your company and your competitors.
In addition, it helps to discover potential opportunities in the market. Here’s how it looks:
A competitive profile matrix is made up of 4 parts:
1. Critical Success Factors
These vary from company to company but typically include things like marketing, brand reputation, location, product quality, product range, customer service, customer retention, etc.
2. Weight
Therefore, Each critical success factor is assigned a weight from 0.1 to 1.0 based on importance. Lower weight means the factor is not particularly important to a company’s success, and a higher weight means the factor is critical.
3. Score
The score assigned to each critical success factor indicates how strong that factor is. Multiplying the weight and the score gives a weighted score.
4. Total Score
The sum of all weighted scores for each critical success factor gives the total score.
Conclusion:
In conclusion, The key to success in any market segment is differentiation, and differentiation requires knowing yourself and your competitors inside out. In addition, this is the only way you can continuously make your products and services more unique and unmistakable and offer your customers measurable advantages. A competitive matrix is a strong tool for revealing all of this, and it is thus an essential tool on your route to lucrative and sustainable growth.
