How to Build a Competitive Matrix that Sets You Apart

They say you should pave your own road -- but in business, existing in a bubble and not minding the competition at all can be pretty dangerous. Obsessing over your competitors isn't healthy -- but knowing what they're doing absolutely is. Which is precisely why creative a proper, detailed competitive matrix is so important for your business.

Want to learn more about that?

Keep reading, we've got the most comprehensive guide on competitive matrixes.

What is a competitive matrix?

A competitive matrix is a strategic tool businesses use to evaluate and compare their products or services against their competitors. It provides a comprehensive overview of the competitive landscape by highlighting the strengths and weaknesses of various competitors. This matrix helps organizations identify opportunities for differentiation, potential threats, and areas where improvements can be made, and it is an essential part of a healthy digital marketing strategy.

The 5 types of competitors

To build a solid competitive strategy, it's important to understand the different types of competitors:

Direct

Direct competitors are companies that offer the same or very similar products or services to the same target market. They compete head-to-head with your business for the same customers.

Direct competitors influence pricing, market share, and customer loyalty within your industry. Analyzing direct competitors can provide critical insights into market trends and customer preferences. This type of competitor typically leverages similar marketing strategies to capture the interest of the same audience.

Some real-life examples of direct competitors include:

• Pepsi and Coca-Cola: Both offer a vast array of carbonated beverages appealing to a similar consumer base.
• McDonald's and Burger King: These fast-food giants compete for customers seeking quick, affordable meals.
• Apple and Samsung: They are key players in the smartphone industry, constantly innovating to attract tech-savvy customers.

Indirect

Indirect competitors provide alternative solutions to the same problem your product or service addresses. While they may not offer the exact same product, they satisfy a similar need or want.

Analyzing indirect competitors involves understanding their overall impact on your market, including their pricing strategies, marketing approaches, and customer engagement practices. This analysis can help your business identify opportunities to differentiate itself and address customer needs that are unmet by these competitors. Furthermore, keeping an eye on indirect competitors allows you to recognize emerging trends and shifts in consumer preferences, which can be crucial for adapting your strategies and strengthening your market position.

Some real-life examples of indirect competitors include:

• Netflix and Hulu: While they both offer subscription-based streaming services, Netflix focuses on original content, while Hulu specializes in live TV.
• Zipcar and Lime: These companies provide alternative transportation options to car ownership by offering car-sharing and electric scooter rental services.
• Fitbit and Apple Watch: These wearable technology companies compete for customers seeking fitness tracking devices with different features and price points.

Perceived

Perceived competitors are businesses that consumers believe are similar to yours, even if the products or services vary significantly. This perception impacts consumer choice and buying behavior.

Perceived competitors are influenced by branding, marketing, and consumer misconceptions. These businesses often operate in adjacent markets but are seen by customers as viable alternatives to your product or service. Understanding perceived competitors can help tailor marketing strategies to clarify your unique value proposition and differentiate your offerings in the eyes of consumers.

To illustrate the concept of perceived competitors, consider the following examples:

• Starbucks and Dunkin': While Starbucks focuses on a premium coffee experience and Dunkin' emphasizes affordability and convenience, they are often perceived as direct competitors in the coffee market.
• Nike and Adidas: Despite differing brand philosophies and product lines, consumers frequently compare the two as direct competitors in the athletic apparel and footwear industry.
• LinkedIn and Facebook: LinkedIn is a professional networking platform, while Facebook is a social networking site, but users sometimes perceive them as competitors for online engagement and user attention.

Partner competitors

Partner competitors are companies that might compete in some areas while also collaborating in others. They can become allies in specific scenarios, such as joint ventures or strategic alliances.

These collaborations can lead to valuable synergies that benefit both businesses, such as expanding market reach or combining unique expertise to offer enhanced products or services. However, while partnering, these companies must also remain vigilant of the competitive aspects of their relationship. Balancing cooperation and competition requires clear communication and strategic agreements to ensure mutual benefit and minimize conflicts.

Examples of partner competitors in real life include:

• Microsoft and Intel: They collaborate closely on developing compatible software and hardware while still having individual strategic goals and competitive areas.
• Google and Apple: These tech giants often collaborate in areas like email and app services, although they fiercely compete in the mobile operating systems market.
• Sony and Microsoft: Both companies develop gaming consoles but may also partner on various technology and standards initiatives within the industry.

Disruptors

Disruptors are innovative companies that change industry norms by introducing breakthrough technologies or business models. They create new markets or significantly alter existing ones, posing a considerable threat to established players.

Disruptors often challenge traditional market leaders by offering unique value propositions that resonate with increasingly tech-savvy and demanding customers. These companies typically leverage cutting-edge technology or novel business models to deliver more efficient, cost-effective, or user-friendly solutions. As a result, disruptors can rapidly gain market share and force established companies to innovate or risk obsolescence.

Examples of disruptors in the market include:

• Uber and traditional taxis: Uber revolutionized the transportation industry with its ride-sharing platform, providing a more convenient and accessible option compared to traditional taxi services.
• Airbnb and hotels: Airbnb disrupted the hospitality industry by allowing homeowners to rent out their properties, offering travelers a wider variety of accommodations at competitive prices.
• Tesla and automotive manufacturers: Tesla's electric vehicles and focus on renewable energy have compelled traditional car manufacturers to invest in electric vehicle technology to stay competitive.



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Why should you create a competitor matrix?

Creating a detailed competitor matrix might feel like the kind of extra work you don't want on your plate, but it can provide you with many advantages:

Position your brand strategically

A competitor matrix allows your business to identify where it stands in the market and how it can position itself to maximize its strengths and minimize its weaknesses. By understanding the competitive landscape, you can tailor your branding efforts to highlight what sets you apart and attract your target audience more effectively.

Make informed decisions

By analyzing competitor data, businesses can make more informed decisions regarding product development, marketing strategies, and pricing models, ensuring they stay competitive. This critical analysis enables organizations to identify gaps in the market and seize opportunities that align with their strengths.

Predict or assess competitor changes

A competitor matrix helps businesses anticipate changes in the competitive landscape and prepare for potential shifts in market dynamics or competitor strategies. This foresight can empower companies to proactively adjust their tactics and maintain a competitive edge, rather than merely reacting to changes as they occur.

Training and onboarding

A comprehensive competitor matrix can be an invaluable resource for training new employees by providing them with a clear understanding of the competitive environment. This foundational knowledge equips new team members to contribute more effectively from the outset, fostering a culture of informed decision-making across the organization.

Clarity & the same source of truth

Having a centralized competitor matrix ensures that all departments within a business are working from the same information, leading to better coordination and strategic alignment. When everyone is on the same page, it minimizes misunderstandings and promotes collaboration towards common goals.

Tracking evolution

Regular updates to the competitor matrix enable businesses to track their progress and the evolution of competitors, identifying trends and making necessary adjustments. This ongoing monitoring not only informs strategy but also helps to cultivate a culture of agility and responsiveness in the face of changing market conditions.

Types of competitor matrixes

If you have decided to build your competitor matrix, you should also know there are different types you can choose from (or combine), as follows:

SWOT matrix

A SWOT matrix analyzes the strengths, weaknesses, opportunities, and threats related to your business and competitors, offering a complete view of internal and external factors.

Essentially, a SWOT matrix will be based on:

Strengths

Strengths are internal factors that give your business an advantage over competitors. These could include resources, capabilities, and positive attributes.

Questions to consider for identifying strengths:

• What resources do we have that are unique or superior compared to our competitors?
• What do our customers say we do better than anyone else?
• What efficiencies do we have in our processes?
• What talents or skills does our team possess that are difficult for others to replicate?
• What successful products or services have we introduced that distinguished us in the market?

Weaknesses

Weaknesses are internal factors that place your business at a disadvantage relative to competitors. Addressing these is critical to improving performance.

Questions to consider for identifying weaknesses:

• Where do we lack resources or capabilities compared to our competitors?
• What do our customers identify as areas for improvement?
• What inefficiencies exist in our operations?
• Where are we experiencing skill or talent gaps?
• What products or services have underperformed in the market?

Opportunities

Opportunities are external factors that your business could exploit to its advantage. These often emerge from market trends, changes in technology, or shifts in consumer preferences.

Questions to consider for identifying opportunities:

• What market trends can we leverage for growth?
• Are there emerging customer needs that we can meet before our competitors?
• What new technologies can we adopt to enhance our offerings?
• Are there partnerships or alliances we could form to expand our reach?
• What regulatory or economic changes could benefit our industry?

Threats

Threats are external factors that could cause trouble for your business. These can include market changes, economic downturns, or aggressive actions by competitors.

Questions to consider for identifying threats:

• What are our competitors doing that could negatively impact our business?
• Are there any regulatory changes that could pose challenges for us?
• How could shifts in consumer behavior affect our products or services?
• What economic factors could hinder our growth?
• Are there technological advancements that could render our offerings obsolete?

For a better understanding of how SWOT analyses work in competitor analysis, let's take a look at a SWOT competitive matrix analysis example for an imaginary product we called "FizzUp":

Strengths

• Unique flavor: The proprietary blend of natural ingredients offers a distinct taste not available in existing market options.
• Health-focused ingredients: Our drink contains less sugar and no artificial flavors or colors, appealing to health-conscious consumers.
• Eco-friendly packaging: Recyclable and minimalist packaging reduces environmental impact and appeals to environmentally aware customers.
• Brand heritage: Leveraging a strong heritage story that resonates with a younger, more socially aware demographic.
• Strong distribution network: Backed by partnerships with well-established distributors ensuring broad and effective market coverage.

Weaknesses

• Brand recognition: As a new entrant, FizzUp lacks the brand recognition and established customer loyalty of Coca Cola and Pepsi.
• Marketing budget: Limited financial resources compared to the colossal marketing budgets of the competitors.
• Established competitor loyalty: High customer loyalty towards existing brands makes market entry challenging.
• Limited flavor varieties: Currently, the product range offers limited flavor options compared to the extensive varieties from Coca-Cola and Pepsi.
• Small retail footprint: Compared to competitors who dominate shelf space, FizzUp faces an uphill battle to secure prominent retail placement.

Opportunities

• Health trend: Increasing consumer demand for healthier beverage options can be leveraged to capture market share.
• Digital marketing: Efficient use of social media and influencer partnerships to build brand awareness and attract a younger audience.
• Partnerships: Potential collaborations with health and wellness brands to fortify the health-centric positioning of the product.
• Market expansion: Exploring underpenetrated markets and niches where large competitors have little presence.
• Innovative product extensions: Developing additional product lines such as zero-sugar variants, flavored waters, or energy-boosting drinks.

Threats

• Aggressive competitive tactics: Promotional blitzes or price wars initiated by Coca Cola and Pepsi to protect their market share.
• Regulatory changes: Potential changes in regulations regarding sugar content and labeling could impact product formulation and marketing claims.
• Economic downturn: A recession could reduce discretionary spending on premium beverages.
• Supply chain disruptions: Dependence on specific natural ingredients could cause vulnerability to disruptions.
• Changing consumer preferences: Rapid shifts in consumer tastes and preferences can lead to quick obsolescence of the product.

Competitive advantage matrix

This matrix assesses how well a company can differentiate itself from its competitors, and it can be used by businesses to discover areas where they can create a competitive advantage.

The elements to consider for a competitive advantage matrix include the following:

Cost advantage

A cost advantage refers to having lower costs than competitors, which can significantly enhance a company's profitability. This advantage allows firms to offer competitive pricing, attract more customers, and increase market share. Ultimately, maintaining a cost advantage can lead to sustained business growth and long-term success in the marketplace.

Specialized

Focusing on businesses that excel in a specific niche or segment allows them to tailor their products and services to meet the unique needs of their target audience. This specialization often leads to stronger brand loyalty, as customers appreciate the expertise and dedicated attention they receive. By honing in on a particular area, these businesses can differentiate themselves from competitors and create a more impactful presence in the market.

Volume

This concept emphasizes how companies can gain a competitive edge by maximizing their production efficiency and achieving substantial sales volumes. By focusing on high production, these businesses can lower their costs and enhance their profit margins, allowing them to offer better prices or invest in further innovation. Ultimately, this strategy not only drives growth but also positions them favorably against competitors in their industry.

Stalemate

This describes markets where competitors operate on a level playing field, showcasing similar strengths and weaknesses. In such environments, no single company dominates, leading to intense rivalry and innovation as each player strives to capture market share. This balance can create opportunities for customers, as they benefit from competitive pricing and diverse options.

Fragmented

In certain industries, numerous small players vie for market share, creating a vibrant and competitive landscape. This environment fosters innovation and diversity, as each company brings unique offerings to the table, catering to niche markets and consumer preferences. As a result, no single company can dominate the market, ensuring that customers benefit from a wide array of choices and services.

For a more in-depth understanding of how this matrix works, this table provides an example of how StepUp positions itself against major competitors such as Adidas and Nike by leveraging various competitive advantages.



Competitive profile matrix

A competitive profile matrix identifies key success factors and ranks competitors against these criteria, providing a visual representation of where each business stands relative to the others.

The competitive profile matrix (CPM) is particularly useful when a business needs to evaluate its market position relative to its competitors. It aids in identifying strengths and weaknesses, which can then be leveraged or addressed to enhance competitive standing. By visually displaying key success factors, companies can better understand where they excel and where improvement is needed.

When to use a competitive profile matrix

• During strategic planning sessions to make informed decisions
• When entering a new market to assess the competition landscape
• In performance reviews to benchmark against competitors
• For identifying opportunities for differentiation and growth
• When preparing for potential mergers or acquisitions

As an example, let's consider the smartphone market and evaluate the competitive profiles of three major players: Apple, Samsung, and Google. This table showcases the key success factors and how each company ranks against these criteria.



Note: Each company is rated on a scale from 1 (worst) to 5 (best) for each key success factor, but this has been done solely with the goal of showcasing the competitive matrix. No data should be taken as such, as it is all used as examples for the purpose of showing an educational example in this article.

Sales matrix

A sales matrix is a powerful tool that helps businesses analyze and compare their sales performance against competitors, providing valuable insights into market share and growth trends. By organizing data in a structured format, a sales matrix enables businesses to visualize their position in the market, identify areas for improvement, and make informed strategic decisions.

For example, a sales matrix might include key metrics such as total sales volume, revenue growth rate, and customer acquisition costs for both your business and its competitors. This comparative analysis can reveal strengths and weaknesses in your sales strategy. If you notice that a competitor has a much lower customer acquisition cost, it may prompt you to investigate their marketing tactics or sales processes to identify successful strategies you can adopt.

To create an effective sales matrix:

1. Identify key metrics: Determine which performance indicators are most relevant to your business objectives. Common metrics might include sales volume, market share, customer retention rates, and average deal size.
2. Collect data: Gather sales data not only from your business but also from competitors. This may involve market research, industry reports, or insights from sales teams.
3. Visual representation: Organize the data in a matrix format, clearly labeling rows and columns for easy reference. This could be done in a spreadsheet or using specialized software.
4. Analyze trends: Look for patterns in the data. Are there specific competitors that consistently outperform you in certain areas? Are there trends over time that indicate shifts in market share?
5. Develop actionable strategies: Use the insights gained from the sales matrix to inform your sales strategy. For instance, if you find that competitors are gaining market share due to superior customer service, consider training your sales team to enhance customer interactions.

In summary, a sales matrix is an essential tool for any business looking to enhance its competitive edge. By providing a clear comparison of sales performance, it enables businesses to make data-driven decisions that can lead to improved sales outcomes and sustained growth in a competitive marketplace.

Now, let's take a look at a sales matrix example to illustrate how this tool can be used effectively.



Product feature and benefit matrix

A product feature and benefit matrix is an analytical tool that helps businesses illustrate the relationship between the features of their products and the corresponding benefits to the customers. This matrix serves as a bridge, conveying how specific attributes of a product directly translate into practical advantages for the user. Creating a compelling product feature and benefit matrix involves several steps:

1. Identify product features: Begin by listing all the key features of your product. These are the attributes, functionalities, or characteristics that differentiate your product from competitors. Examples include unique design elements, advanced technological capabilities, or superior materials used in manufacturing.
2. Determine customer benefits: For each feature, identify the specific benefit it provides to the customer. Benefits are the positive outcomes or value that customers experience from the feature. For instance, a product feature like "water-resistant design" translates into the benefit of "extended product lifespan even in wet conditions," enhancing durability and customer satisfaction.
3. Create the matrix: Structure your matrix with two main columns – one for features and one for benefits. This visual format makes it easy to see the direct linkage between what the product offers and how it helps the customer. You can also add additional columns for each customer segment if your product serves multiple audiences, highlighting tailored benefits for each group.
4. Provide detailed descriptions: Within the matrix, offer detailed descriptions and real-world examples to elaborate on how each feature meets customer needs. This could include case studies, testimonials, or hypothetical scenarios that show practical applications. For example, if your product feature is "energy-efficient technology," elaborate on how it results in "lower utility bills and a reduced environmental footprint."
5. Use visual aids: Include visuals such as icons, images, or infographics to make the matrix more engaging and easier to digest. Visual aids help to quickly convey the connection between features and benefits, especially for complex products.
6. Highlight unique selling points (USPs): Emphasize the features that set your product apart from the competition. Highlight these USPs to ensure they stand out, as they are often key decision-making factors for customers. If a feature is proprietary or patented, underscore the exclusivity and additional value it brings.
7. Update regularly: A product feature and benefit matrix should be a living document. Regularly update it to reflect new features, customer feedback, and evolving market conditions. Keeping it current ensures that it remains a valuable tool for sales teams, marketers, and product developers.



Incorporating these tips into your product feature and benefit matrix will not only make it a more compelling document but also a powerful tool in demonstrating the value your product brings to the market. Whether used in sales presentations, marketing materials, or strategic planning, a well-crafted matrix can significantly enhance your ability to communicate the advantages of your product effectively.

How to create a competitive matrix

Creating a competitive matrix might feel overwhelming but, if you follow a set process, things can be managed much easier. This process involves several steps:

1. Identify your competitors

Begin by researching the market to pinpoint who your main competitors are. Look for businesses that offer similar products or services and target the same audience. Understanding your competitive landscape is crucial for effective analysis and strategy development.

2. Choose the factors you want to compare

Decide on the specific criteria that matter most to your business goals, such as pricing, product features, customer service, or market share. Selecting relevant factors will help you make meaningful comparisons that can inform your strategy. Focus on aspects that directly impact your competitive advantage.

3. Gather data on these factors

Collect data from reliable sources, including competitor websites, customer reviews, and industry reports. Utilize tools like surveys and market research to obtain firsthand information. Ensure that the data you gather is comprehensive and current for accurate analysis.

4. Analyze the data to identify strengths and weaknesses

Examine the collected data to uncover insights about your competitors' performance. Look for patterns that reveal their strengths, such as superior customer service, or weaknesses, like high pricing. This analysis will guide your strategic decisions and help you identify opportunities for improvement.

5. Create a visual representation of your findings

Transform your data analysis into easy-to-understand visual formats like charts or graphs. Visual representations can highlight key comparisons and make your findings more accessible to stakeholders. This step is vital for presenting your insights clearly and effectively, facilitating informed decision-making.

How to find competitor data

You can use different methods to find competitor data, and some of the most effective ones include:

Market research

Conducting surveys and focus groups is essential for gathering valuable insights into customer preferences and behaviors. These methods allow businesses to understand the needs and desires of their target audience, ensuring that products and services are aligned with market expectations. By effectively analyzing the data collected, companies can make informed decisions that drive growth and success.

Public records

Utilizing public records, such as financial reports, press releases, and annual reports, can provide crucial information about competitors and industry trends. These documents often reveal insights into a company's financial health, strategic direction, and market position. Accessing this information allows businesses to benchmark their performance and identify opportunities for improvement.

Online tools

Online tools like SEMrush, Ahrefs, and Google Analytics are invaluable for conducting comprehensive market analysis. They enable businesses to track website performance, analyze competitors' SEO strategies, and discover keywords that drive traffic. Leveraging these tools can help companies refine their online presence and enhance their digital marketing efforts.

Customer feedback

Collecting feedback from existing or potential customers about competing products is vital for understanding market positioning. This feedback can highlight strengths and weaknesses in both your offerings and those of your competitors. By actively listening to customers, businesses can adapt their strategies and improve their products to better meet market demands.

Social media

Monitoring competitor activity on social media platforms is crucial for gauging their strategies and customer engagement. Social media insights can reveal how competitors are positioning themselves and interacting with their audience. By observing these interactions, businesses can identify trends, best practices, and areas where they can differentiate themselves in the market.

Time to get competitive

Whether you like it or not, your business doesn't exist in a void. Unless you're in a "category of one", chances are you have competition.

Analyzing your competitors' strengths and weaknesses is key to developing a successful strategy that sets your business apart and enables you to build a better marketing strategy and a healthier approach to sales.

If you need help with your digital marketing, don't hesitate to contact Mayple. We work with the best digital marketing agencies and we'll match you with the perfect one for your business' specific needs!