Competitive Analysis Breakdown - Essential Guide to Examining Rivals' Strategies
In the highly competitive world of fast-moving consumer goods (FMCG), understanding the competitive landscape is crucial for success. Here's a comprehensive guide to performing a competitive analysis in the FMCG sector.
**1. Identify Competitors**
Start by identifying both direct and indirect competitors. Direct competitors are businesses offering similar products and targeting the same customer segments. Indirect competitors, on the other hand, offer different products that satisfy the same core consumer needs. A shortlist of 2–3 key direct competitors is recommended to avoid information overload, with the option to broaden as needed. Leverage market research tools, traffic analytics, and sales/customer feedback to build your competitor list.
**2. Analyze Market Share**
Estimate each competitor’s market share using industry reports, sales figures, point-of-sale (POS) data, and regular retail audits. Deploy consumer panels or surveys to assess brand penetration and purchasing frequency. Compare your brand’s performance against total category sales to calculate share.
**3. Conduct SWOT Analysis**
Perform a SWOT analysis for each competitor, identifying their strengths, weaknesses, opportunities, and threats. For your own brand, conduct an internal SWOT analysis to benchmark against competitors.
**4. Build a Competition Portfolio**
Document each competitor’s product range, pricing, promotion, and distribution ("4Ps"). Analyse their advertising, digital presence, and promotional campaigns. Track new product launches, R&D investments, and patents for insights into future moves. Use brand awareness studies and trackers to understand how consumers view each competitor.
**5. Plan Strategies**
Identify gaps in your brand's performance and areas where competitors are outperforming. Leverage pricing studies and consumer price sensitivity data to set optimal price points. Prioritise innovations that address unmet needs or differentiate from competitors, using consumer testing and quantitative feedback. Develop an omnichannel approach, as companies with broad distribution gain higher loyalty. Plan campaigns that capitalise on competitor weaknesses or market opportunities.
**6. Execute Strategies**
Launch new products, adjust pricing, roll out promotions, and expand distribution as planned. Ensure cross-functional coordination between marketing, sales, supply chain, and finance. Monitor early results and be ready to pivot tactics if needed.
**7. Follow Up**
Track changes in market share, sales volume, brand awareness, and customer loyalty. Watch for competitor countermoves such as price cuts, new launches, or increased promotions. Gather insights from retailers and distributors on shelf execution and competitor activities.
**8. Continuous Analysis**
Schedule periodic competitive analysis updates to stay current. Continuously conduct brand tracking, pricing studies, and consumer surveys to detect shifts in the competitive landscape. Use data from sales, customer service, and social media to refine strategies. Maintain a steady stream of consumer-driven product development to stay ahead.
By following these steps, FMCG companies can systematically understand their competitive environment, make informed strategic decisions, and adapt to maintain or grow their market position. Regular, structured analysis is essential in FMCG due to rapid market changes and high competition. Leverage both qualitative and quantitative data and stay agile to adjust strategies based on real-time market feedback and competitor actions. Innovation and distribution are critical levers for gaining and maintaining competitive advantage.
- For effective investment and financial growth in the FMCG sector, it is essential for businesses to understand the competitive landscape by analyzing the market share, product range, pricing, and distribution of direct and indirect competitors, as well as conducting SWOT analyses.
- Adopting an omnichannel approach, setting optimal price points, and continuously refining strategies through brand tracking, pricing studies, and consumer surveys can help FMCG companies maintain a competitive edge and maintain or grow their market position.
