Competitive Market Analysis Essay ⋆ Business Essay Examples ⋆ EssayEmpire

Competitive market analysis (CMA) is the analysis of the competing companies within a given industry, usually focusing on the top performers. A CMA of the American soft-drink industry, for instance, would usually focus on The Coca-Cola Company, PepsiCo, and the Dr Pepper Snapple Group; an analysis focusing on the New England region might also include Polar Beverages, Adirondack Beverages, and Cornucopia Beverages, the makers of Moxie. CMAs give interested parties—usually one of the companies in the industry—a lay of the land, a sense of the market landscape that goes beyond just the performance of a given company. Depending on the industry and the size of the company, CMAs may be prepared in-house or by outside analysts.

CMAs include, first of all, quantitative data— everything from publicly available information of the sort provided to shareholders (sales figures, capital, number of employees, expenses, et cetera) to figures derived from that data (the biggest sellers in the industry, the fastest-growing companies) to figures derived from both quantitative and qualitative data (ranking and rating the companies). Various metrics may be assessed for each company in the analysis, data that is only of interest when compared laterally among the companies in the field—for instance, in the case of the soft-drink industry, the transportation costs associated with product distribution, or the amount of money spent on sponsorships like Little League scoreboards. In the 21st century, CMAs will usually include search engine data in the analysis, noting the search engine rankings of the included companies with respect to various relevant keywords (which can be an exhaustive list, especially if the CMA concerns an industry that conducts a significant amount of business online, like mail order vendors or domain name services).

Qualitative data forms a significant part of the CMA. This can include everything from visual information—product and logo designs, branded merchandise, Web site screenshots—to consumer surveys. The emphasis of the qualitative data is to examine the points of similarity and difference among competing companies, and to evaluate their strengths and weaknesses relative to one another in as many areas as possible. Efficiency, consistency, and clarity are things looked for in the examination of qualitative data; visual information should convey what the company wants to convey, interactions between the consumer and the company should be consistent and should help to establish user expectations that the company can match, and the overall message should be clear. In the case of large companies or niche markets, these messages are necessarily more complicated than “Coca-Cola is better than Pepsi.”

A competitive market analysis provides a business with an understanding of its competitors’ strengths, liabilities, goals, and methods of reaching those goals, while putting its own operations in perspective. The business can learn from its competitor’s mistakes—avoiding a coffee-cola since there seems to be little market for it, or marketing it differently if they are already committed to it—while also evaluating its competitor’s strengths and seeing whether they can be emulated. At the same time, individual corporate identity, what defines competitors in the same field, might be brought into sharper focus. Television networks tend to strengthen their appeal to their existing demographic base, for instance, as well as competing with other networks—and in so doing, they decide which time slots are the most important to them, which audiences they most wish to attract. When fledgling network Fox moved its young animated sitcom The Simpsons to a new timeslot to compete directly against NBC’s popular and well-respected Cosby Show, it was a deliberate move informed not by factors within the company but by factors in the larger market.

The final form of a CMA is a lengthy report that generally places raw data at the back. A summary of findings precedes a list of recommendations or critical findings, followed by less prioritized information organized by category. Analyses can also be conducted on a specific aspect of business operation, such as the popularity of soft drinks among senior citizens, or the effectiveness of Web presence for a soft-drink company.

Competitive market analysis can also be used in the process of price-setting, and is a common process in the real estate market (where the term “comparable market analysis” is sometimes used).

Bibliography:

Lee G. Cooper and Masako Nakanishi, Market-Share Analysis: Evaluating Competitive Marketing Effectiveness (Springer, 1989);
Rainer Michaeli, Competitive Intelligence: Competitive Advantage Through Analysis of Competition, Markets and Technologies (Springer, 2009);
Adrienne Schmitz, Real Estate Market Analysis: A Case Study Approach (Urban Land Institute, 2001).

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