Competitor analysis frameworks: which to use, when

A competitor analysis framework is a structure for sorting what you know about rivals so that it answers one specific question. Seven frameworks, or models, for competitor analysis are worth knowing. Each answers a different question, and most teams only need two of them.

The short version: a competitive matrix for "how do we compare", a positioning map for "where is the room", and Porter's five forces only when the question is "should we be in this market at all".

The seven frameworks at a glance

The times are rough guides for a small team that has already collected its evidence. Collecting the evidence is the bigger job, and it is the same job whichever frameworks you pick.

Which competitor analysis framework to use

Start from the question, not the framework.

• "Should we enter, or stay in, this market?" Five forces, plus a strategic group map if the market is crowded.
• "How do we compare?" Competitive matrix.
• "Where can we position?" Perceptual or positioning map.
• "What is this one rival up to?" Competitor SWOT.
• "How do they win customers?" 4Ps.
• "Who are we really up against?" Jobs to be done.

If you cannot name the question, no framework will help. You will fill one in, present it, and change nothing.

SWOT

Strengths, weaknesses, opportunities and threats, for one company. Used on a competitor, it organises evidence about where they are strong and where they are exposed.

Good for: a one-page view of a single rival that anyone understands at a glance.

The trap: four lists of adjectives filled in from memory. Every line needs a source and a date.

Templates: the SWOT analysis template, with the competitor version explained step by step in how to do a competitor SWOT. To turn a SWOT into strategy options, follow it with a TOWS matrix.

Porter's five forces

From Michael Porter's 1979 Harvard Business Review article, How Competitive Forces Shape Strategy. It looks at an industry rather than a competitor: rivalry among existing firms, the threat of new entrants, the threat of substitutes, and the bargaining power of buyers and of suppliers.

Good for: business plans, market entry and questions about pricing power. It stops you treating your three named rivals as the only threat.

The trap: scoring each force high, medium or low and stopping there. Each force should end in a consequence: "Buyers can switch in a day, so we cannot raise prices without adding value first."

Template: Porter's five forces.

Competitive matrix

Rows are buying criteria, columns are you and your rivals, and the cells hold evidence or a score. The weighted version, the competitive profile matrix, gives each criterion a weight.

Good for: almost everything. Sales, positioning, pricing, the competition slide in a pitch deck.

The trap: rows chosen to flatter you, usually features you have and they lack. Take the rows from what buyers mention in reviews and sales calls, and score from evidence.

Template: competitive matrix.

Perceptual map and positioning map

Two axes that matter to buyers, with each company plotted on them. The terms are often used interchangeably, and the useful distinction is the data behind them. A perceptual map plots how buyers see companies, from surveys or reviews. A positioning map plots where companies place themselves, from their own messaging and pricing.

Good for: finding empty space, and showing it in one picture.

The trap: axes that put you alone in the top-right corner, such as "quality" against "price". Choose axes buyers genuinely trade off, like "done for you" against "do it yourself", or "specialist" against "all-in-one".

Templates: perceptual map and positioning map.

The 4Ps

Product, price, place and promotion: the marketing mix in the form E. Jerome McCarthy set out in 1960. As a competitor framework it gives you four columns for describing how a rival goes to market.

Good for: a structured description of a rival's marketing, especially in retail and consumer goods, where place (distribution) matters a great deal.

The trap: it describes and never prioritises. Four tidy columns, no conclusion. Use it as a checklist inside a marketing-focused competitor analysis rather than as the output.

Strategic group map

Plot every player in an industry on the two dimensions that most separate them, such as price level and breadth of range, then circle the clusters. The term "strategic group" was coined in 1972, in a study of the appliance industry. Companies inside a cluster compete directly; moving from one cluster to another is hard.

Good for: crowded markets, such as restaurants in one city or a software category with thirty vendors, and for spotting a cluster nobody occupies.

The trap: sizing the bubbles with revenue estimates that are guesses. Use something you can observe, such as number of locations or review count, or keep every circle the same size.

Jobs to be done

Set out by Clayton Christensen and colleagues in Know Your Customers' "Jobs to Be Done" (Harvard Business Review, September 2016): customers hire a product to get a job done. Your competition is anything else they could hire for the same job, including a spreadsheet, a freelancer or doing nothing.

Good for: finding the competitors you cannot see because they are not in your category.

The trap: guessing the job in a workshop. It only works with interviews. Ask five to ten recent buyers what they used before, what they nearly chose instead, and what finally made them switch.

Which frameworks to skip

Most small teams can safely skip three of the seven:

• Five forces, unless you are writing a business plan, entering a market or deciding whether to stay in one. For the plan itself, see competitive analysis for a business plan.
• Strategic group maps, unless you have more than about eight real rivals.
• The 4Ps as a deliverable, if you already keep a one-page profile per competitor.

The minimum set that covers most decisions: a one-page profile per competitor, one competitive matrix and one positioning map.

One evidence log, many frameworks

The common mistake is collecting fresh evidence for each framework. Keep a single log instead, with four columns: date, competitor, fact, source link. Each framework then becomes a different view of the same facts.

Say a hypothetical rival raises its entry price from $29 to $39 and adds a seat limit. In their SWOT, that is evidence of pricing power or of a margin problem. In the matrix, it updates the price row. On the positioning map, it moves them up the price axis. In five forces, if their customers do not leave, it tells you something about buyer power.

The log is also the part that goes out of date first. Re-date it monthly, or let a tool collect the public changes for you. Our own Figo collects pricing, page, ad, ranking, social and review changes once a week. Ours, so judge accordingly. If you need a framework for one presentation rather than an ongoing view, you do not need a tool at all, and choosing and filling the frameworks stays a human job either way.