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How should a company conduct their competitor analysis?

Competitor analysis is an integral part of the business world and a part of the five Cs: company, consumer, competitor, collaborator and context.  Is there a limit to competitor analysis and can a company being too enthralled in their competitors. In Harari's article, The Hynotic Danger of Competitive analysis is it discussed home being too competitor focused will lull the company into a myopic customer view and cause failures within the company. As Dilbert shows above, the company is too focused on catching their competitor instead of focusing on the customer market. Don't get me wrong competitor analysis is important but don't not become over reliant on the competitor data.

One great way to gain competitor data is to copy WestJet in using an ex-employee of a competitor's password to gain access to Air Canada's database to review flight and customer patterns.

Wait, that is unethical and possibly illegal.  WestJet settled a lawsuit for $15.5million with Air Canada.  This example just show how important it is to get competitor information but there are legal and illegal bounds.   Dumpster diving is legal is the dumpster is on public property which is what happened to Mary Kay.  Company's also seek to reverse engineer competitor products, take facilities tours and many other ways to gather information about a competitor.  But there are many legal ways to gather the data from government reports, Annual Reports and other options.

Working in the aerospace industry, competitor information is very important.  Knowing what technology the competitor is leveraging in their product helps a company direct their R&D and know the market they are looking for.  In the jet engine industry there are only there major competitors Pratt and Whitney, General Electric and Rolls Royce.  There are a few smaller companies Honeywell and Snecma but they do not compete in the same airplane sized market.  As for indirect customers, this scope must be opened to other transportation industries, as the final end customer (plane passengers) chose the use of a plane over buses trains and cars.  So indirect competitors would be the suppliers of alternative transportation options.

How is the competitor defined for a corporation? Is it the consumer or the company?
Customer's define the competing company because they are one who are deciding what products suit their needs the best.  Does the Apple iPhone or a Google Android supply the right answer to their needs for a multifunctional communications device, I mean come on its not like they are just cellular telephones.  Are Pepsi and Coca Cola the only competitor in the soda or beverage industry? No, Arizona Beverage, Snapple and other smaller firms have positioned themselves to gain market shares from Coke and Pepsi.

What can forecasting tell you about the consumer and the competitor?  A lot. By using both, detailed analytics and high level glances, companies can look to market demand, market potential, market growth and many other factors.  By looking at the Four Ps, Product, Place, Promotion and Price, companies can create competitive maps to help a company predict the future of an emerging market new product).   By studying the past values, a company can look to see what a new product may need for features, where it is going to be needed and price. The average price line falls out from the price vs benefit graph.



Overall, the usage of data from customers, industry and competitors is important to a company's success.  The instantaneous data of today's world has changed the process for data gathering and analysis but allows for company's to have an instant snap shot of their customer which is important.