Competitive Analysis Terms:

Barrier to Exit

The difficulties or costs associated with leaving a market or discontinuing a product. High barriers can make companies more cautious about competitive moves.

Barriers to Entry

Obstacles that make it difficult for new competitors to enter a market, such as high startup costs, regulatory hurdles, or strong brand loyalty among existing customers.

Benchmarking

The practice of comparing a company’s products, services, or processes with those of leading competitors to identify best practices, gaps, and opportunities for improvement.

Blue Ocean Strategy

A business strategy that focuses on creating a new market space or "blue ocean" rather than competing in an existing one. It aims to make competition irrelevant by innovating in ways that create uncontested market space.

Brand Equity

The value and strength of a brand based on consumer perceptions, brand loyalty, and awareness. Strong brand equity can be a competitive advantage.

Competitive Advantage

The unique edge a company has over its competitors that allows it to generate greater sales or margins or retain more customers than its competition.

Competitive Analysis

A systematic process of evaluating the strengths and weaknesses of current and potential competitors to identify opportunities and threats in the market.

Competitive Audit

A thorough review of a competitor's strategies, strengths, weaknesses, market positioning, and brand to identify areas where a company can outperform or differentiate itself.

Competitive Benchmark

A standard or point of reference against which the performance or success of competitors can be measured.

Competitive Convergence

The phenomenon where companies in an industry adopt similar strategies, products, or processes, reducing differentiation and intensifying competition.

Competitive Intelligence (CI)

The process of gathering, analyzing, and using information about competitors, market trends, and external business environments to make informed strategic decisions.

Competitive Intelligence Tools

Software or platforms used to collect and analyze competitive data, such as Crayon, SEMrush, SimilarWeb, and Klue.

Competitive Landscape

The overall view of the competitive market, including all competitors, their market positioning, product offerings, and strategies.

Competitive Monitoring

Ongoing surveillance of competitors’ activities, market trends, and customer feedback to adapt and respond quickly to changes in the competitive environment.

Competitive Parity

A situation where companies have similar competitive advantages, making it difficult for any one competitor to dominate the market. It requires firms to continuously innovate to gain or maintain an edge.

Competitive Positioning

How a company distinguishes itself from its competitors in the market in terms of product features, price, brand image, and customer perception.

Competitive Response

The strategic actions a company takes in reaction to the movements or initiatives of its competitors, such as a price drop or a new product launch.

Competitive Saturation

The point at which a market is highly crowded with similar products, making it hard for new entrants to succeed without significant differentiation or innovation.

Competitor Benchmarking

The practice of comparing a company’s performance, product offerings, or processes with those of direct competitors to understand relative positioning.

Competitor Profiling

The process of collecting and analyzing detailed information about a competitor’s business operations, market positioning, strengths, weaknesses, and strategic goals.

Core Competency

A defining capability or advantage that sets a company apart from its competitors. Core competencies are often difficult to replicate, providing a sustainable competitive edge.

Cost Leadership

A competitive strategy where a company seeks to be the lowest-cost producer in the industry to attract price-sensitive customers and gain market share.

Customer Acquisition Cost (CAC)

The cost associated with acquiring a new customer, including marketing and sales expenses. In competitive markets, lowering CAC can be a key advantage.

Customer Churn Rate

The percentage of customers who stop using a product or service during a given period. It’s an important metric for SaaS companies in highly competitive markets, indicating customer satisfaction and loyalty.

Customer Lifetime Value (CLV)

The total revenue a company expects from a single customer account throughout the relationship. Understanding CLV helps companies focus on retaining high-value customers in competitive markets.

Customer Persona

A semi-fictional representation of a business’s ideal customer, based on market research and real customer data. Building personas helps companies tailor their competitive strategies to different customer types.

Differentiation Strategy

A strategy in which a company focuses on offering unique features or benefits that set it apart from competitors, allowing it to charge premium prices.

First-Mover Advantage

The competitive advantage gained by the first company to enter a specific market or introduce a new product. This advantage can include brand recognition, customer loyalty, and market share.

Go-to-Market (GTM) Strategy

A plan that outlines how a company will reach its target customers and achieve competitive advantage when launching a product or entering a market. It includes marketing, sales, distribution, and pricing strategies.

Low-End Disruption

A market disruption strategy where a company enters at the lower end of the market with a simpler, lower-cost product that meets the basic needs of underserved customers. Over time, these products improve and capture market share from established players, who typically focus on serving high-end customers with more complex, premium offerings.

Market Entry Strategy

A plan devised by a company to enter a new market, which often includes an analysis of competitors, potential customers, and industry conditions.

Market Penetration

The degree to which a product or service has been adopted by the market in comparison to the total potential market, often used to assess a company's market dominance.

Market Segmentation

The process of dividing a market into distinct groups of buyers with different needs, characteristics, or behaviors. It helps companies tailor their products and marketing efforts to specific segments.

The percentage of a market controlled by a specific company or product compared to its competitors.

Perceptual Mapping

A visual tool used to display customers' perceptions of different brands or products within a market. It helps businesses understand where they stand relative to competitors on specific attributes (e.g., price vs. quality).

Porter's Five Forces

A model that identifies and analyzes five competitive forces that shape an industry: competitive rivalry, threat of new entrants, bargaining power of suppliers, bargaining power of customers, and the threat of substitute products.

Positioning Statement

A brief description of how a product or brand fulfills the needs of its target market better than its competitors. It usually includes the target audience, product category, and unique selling proposition (USP).

Price Elasticity of Demand

A measure of how sensitive the demand for a product is to changes in its price. Knowing this helps companies understand if a price change will impact sales relative to competitors.

Product Differentiation

The strategy of making a product stand out in the marketplace by offering unique features, benefits, or quality that competitors don’t provide.

Red Ocean Strategy

Competing in an existing market with defined competition (a "red ocean"). This strategy focuses on outperforming competitors to capture more market share in a highly competitive environment.

Sentiment Analysis

The use of natural language processing and data analytics to assess the public's or customers' attitudes toward a brand or competitor through online reviews, social media, and other forms of communication.

A metric that measures the proportion of the conversation a company owns in a particular market or industry compared to its competitors.

Strategic Group

A cluster of companies within an industry that follow similar strategies or have similar competitive positions.

SWOT Analysis

A framework used to evaluate a company’s Strengths, Weaknesses, Opportunities, and Threats, both in relation to itself and to its competitors.

Threat of Substitutes

A force from Porter's Five Forces, referring to the likelihood that customers will switch to a different product or service, thereby diminishing demand for a particular company’s offerings.

Total Addressable Market (TAM)

The total revenue opportunity available if a product or service achieves 100% market share. Understanding TAM helps businesses size up their potential in a competitive market.

Unique Selling Proposition (USP)

A specific advantage or benefit that makes a product or service stand out from its competitors. The USP highlights what makes a product unique in a way that appeals to customers.

Value Proposition

A statement that explains why a customer should buy a product or service over a competitor’s, typically by emphasizing unique benefits or advantages.

Win-Loss Analysis

A review of why sales deals are won or lost, providing insights into what works against competitors and where improvements are needed.