How To Create Visuals For Your Competitive Analysis
When I got my license, the internet wasn’t what it is today. I had to sit down at my parents’ kitchen table with the Yellow Pages and go through the list of local car insurance companies, pick up the phone and call them to get information and quotes. Then after I compared their offerings, I had to go down in person with a check to get my car setup with insurance.
Can you imagine doing this today?
No way! Businesses are fast and customers savvy these days.
It is not because people have gotten smarter or are better at research, it is because there is so much more information available at our fingertips. Prospective customers comb your website, user reviews and forums to get information.
We said “Adios, Yellow Pages. Hello, Google.” a long time ago.
There is a lot of information out there and customers are used to searching it and using it to make decisions.
These days, more than ever, understanding where your business sits among the competition is essential. Knowing how your business is perceived by current and potential customers enables you to not only continue to improve your offering to meet your customers’ demand but also grow your business quicker.
That’s why creating a visual representation of your competitors will help you to understand where you stand and how you can stand out.
Usually, people do not create a visual of their competitors unless they are creating a business plan for investors or lenders, but it can help you to understand your business and how you can improve it.
There may be a lot of competition in your industry or market, but in many cases it does not really matter. There are plenty of companies who are able to differentiate themselves with a unique offering and that is enough. The key to being competitive is understanding the holes in the market and how you can plug them.
There are two main ways to create a visual representation of your company’s competitive landscape: with a 2x2 chart or a feature table. Each has its advantages and limitations.
To better understand both types of visuals for competitive landscape, let’s use an example. Let’s say you want to start a business that is a high end subscription box for men with beards. The customer will receive high end natural beard care products of their choice plus a bonus trial product piece each month. The price starts at $35 per month.
With a quick search in Google, I found the following. (You will need to take your competitors more seriously and spend time researching everything about them.)
BirchBox Man - An assorted box of men’s grooming supplies with different products each month. Starting at $20/month.
Dollar Beard Club - A recurring box of natural beard products chosen by the customer. Starting at $1/month.
Lucky Scruff - An assorted box of natural and premium beard grooming supplies and products with different products each month. Starting at $20/month.
Gentleman’s Box - An assorted box of luxury grooming supplies with different products each month. Starting at $25/month.
A 2x2 enables you to display how each competitor lines up in the most important two variables.
Here you can see an example of how you might want to visually show your high end subscription box with men's beard grooming products in a 2x2. The two axes are price and product offering. Price is a function of of any high end product so I see it as essential. The x axis is for the subscription boxes’ focus.
For the x axis, I think you have more leeway: maybe you would want to choose customer type, for example: young business professional, hipster, mature man, etc. It really depends on the main differentiation points for your business.
The quadrants are important. This is especially true when you are creating this as a presentation. You want to either be smack in the center of all four quadrants or in the upper right. We are naturally accustomed to seeing the center or upper right as the best and the place where we want to be. You can see that I put your logo in the upper right quadrant to stand out.
Other things that you can play with: the colors and sizes of the competitors logos or adding more details next to the logos. For example, making all of the competitor’s logos grayed out and yours in color or adding the price next to the logos for further detail.
A table enables the reader to compare and contrast multiple criteria with a quick scan.
|Product Range||Assorted grooming||Beard only||Assorted grooming||Beard only||Beard only|
I choose the variables that I think might be the most important to your customers here. At a quick glance the reader can see how your offering is different from the others and which competitor is also the most similar.
In general, 2x2’s make it very easy for the reader to visualize where your business stands among the competition but it is limited to two variables. A table enables you to evaluate the top features how you stack up but it is not as visual as the 2x2. You also need to be careful about the total number of features you review: too many is confusing and too few is not helpful.
There are many ways to create visuals for your competitive analyses, but I recommend a 2x2 or a table. They are the easiest for the reader to understand and these are what investors are used to seeing.
Good luck creating your competitive visuals. Remember, the objective is for you (and the reader) to quickly understand how your business stands out from the rest. Don’t try to complicate it!