Have you ever been playing a game and had to look around to check out the competition?
Whether you currently own or you’re looking to start your own business, you need to do the same thing. Luckily, there’s a methodical way to do that: by conducting a competitive analysis and creating a competitive matrix.
A competitive matrix will help you identify your competitors and lay out their products, sales, and marketing strategies in a visual format. By doing this, you’ll learn where you’re positioned in the market, how to differentiate yourself from your competition, and how to improve upon your processes so you can beat them in the marketplace.
Below, you’ll learn what a competitive matrix is and review some templates and examples.
Competitor Matrix Types
Before you dive into the world of competitive matrices, it’s important to understand that there are different types you can use to compare your company to your competitors:
- SWOT analysis
- Competitive Advantage Matrix
- Competitive Profile Matrix
- Sales Matrix
- Product Feature and Benefit Matrix
- Price Matrix
A SWOT analysis is a technique used to assess how your business compares to its competitors. The acronym stands for strengths, weaknesses, opportunities, and threats. It analyzes internal and external factors that affect the current and future potential of your business. By identifying these elements, you create a space to capitalize on your strengths, improve your weaknesses, take advantage of opportunities, and eliminate threats.
If your company has an excellent profit record, this is a strength. If your company offers a small variety of products to its customers, this could be seen as a weakness. How do you determine what information goes into your SWOT analysis? Below are some questions you can use to guide you.
The following questions should help you discover where your company excels. This information will help you attract and draw in new customers as well as maintain existing ones.
- What are your assets?
- What is your unique selling proposition?
- Do you have a strong customer base?
- What resources do you have?
- What makes you better than your competitors?
- What do your customers like about your product/services?
It’s difficult for your organization to improve if you have no system to determine your weaknesses. To remain competitive within your industry, you need to discover these faults to correct them.
- What do your customers dislike about your products/services?
- What areas do your competitors have an advantage in?
- Do you or your employees lack knowledge or skill?
- What resources do you lack?
- Are you making enough profit?
Keeping an eye on your competition is necessary; however, watching for available opportunities will give your business a competitive advantage. These opportunities can come from both monitoring your competitors as well as industry trends.
- What are the current trends?
- What is the market missing?
- Is there available talent that you could hire?
- Are your competitors failing to satisfy their customers?
- Is your target market changing in a way that could help you?
Threats can come up within a business at any time. These can be internal or external factors that potentially harm your company and its operations. Identifying these threats will help your business run efficiently.
- Who are your competitors?
- Has there been an increase in your competition?
- What are the obstacles you are currently facing?
- Are your employees satisfied with their pay and benefits?
- Are government regulations going to affect you?
- Is there a product on the market that will make yours outdated?
As demonstrated by these questions, a SWOT analysis matrix can help your company identify elements that are often overlooked.
Competitive Advantage Matrix
A competitive advantage matrix analyzes your company’s competitive advantage by assessing volume production and differentiation. Its purpose is to determine how your company can grow.
This matrix has two axes — vertical and horizontal. The vertical axis evaluates the number of opportunities available for achieving a competitive advantage, while the horizontal axis measures the potential size of the competitive advantage. Using this information, the competitive advantage matrix is segmented into four boxes:
- Stalemate – Few advantages with small potential
- Volume – Few advantages with great potential
- Fragmented – Many advantages with small potential
- Specialized – Many advantages with great potential
Using this information gives you the tools to determine where your competitive advantage comes from.
Competitive Profile Matrix
A competitive profile matrix is a tool your company can use to directly compare your strengths and weaknesses to industry competitors. For this matrix, you will use four elements: critical success factor, weight, rating, and score.
Critical success factors are areas that will determine your success. Examples are brand reputation, range of products, customer retention, and sales per employee. Once you have selected these factors, you will assign a weight. This is a measure of their importance, ranging from 0.0 (low importance) to 1.0 (high importance). Each factor should have its own weight, as each varies in importance. Avoid assigning a weight of 0.3 or more, as most industries are determined by many factors. This high value can decrease the number of factors you’re able to list in your matrix. When assigning weight, make sure the sum of all weights equals 1.0.
The third step is to rate your company and its competitors from 1 to 4 in each critical success factor. Rate:
1 – Major weakness
2 – Minor weakness
3 – Minor strength
4 – Major strength
The final step is to calculate the score. First, evaluate each critical success factor by multiplying the weight by the rating. Once this has been done for all, add each company’s score for the total score. This, when compared to your competitors, will show if you’re behind the curve, ahead of the curve, or on par with the industry.
A sales matrix is a tool used to help gauge the urgency and viability of sales opportunities. It evaluates potential customers’ interest in your business against their fit for your product or service.
Imagine focusing all your efforts on a potential customer. You send content and numerous promotions only to discover that they aren’t interested in your company and are a bad fit. It’s unlikely you’ll get that sale, and it feels like time wasted. Now, imagine giving all that energy to someone interested and a good fit. The sale becomes a lot more likely. A sales matrix uses interest and fits to help you decide how much attention to give your potential clients at any given time.
Product Feature and Benefit Matrix
The product feature and benefits matrix evaluates how your offer matches customer needs. It’s weighted by its importance versus its perceived distinction or advantage. When using this matrix, your features fall into the following categories:
- Irrelevant – Low importance and low distinction
- Overinvested – Low importance and high distinction
- Key liabilities – Low importance and high distinction
- Key differentiators – High importance and high distinction
This information tells you what features to keep, what features to get rid of, and where you might be able to save money. Consider an iPad. Say Apple spends a large portion of the manufacturing budget to produce a high-quality camera, only to find out that most users don’t even use it. The camera has a high perceived distinction, yet it’s of low importance to iPad users. This information would tell Apple that they overinvested in this feature and could potentially reduce it to save costs in the future.
A price matrix is a tool used to define product costs, features, and tiers. It allows you to determine how much you will charge for specific levels of service. Unlike the other matrices on this list, a price matrix is a customer-facing competitive matrix type. You are creating it for your potential customer.
When building your price matrix, start with your tiers. It’s common to lay out two or three levels. Once you’ve named them, create a short description. Depending on the industry, you might find it easier to include a few features associated with the category. Once you do, list the prices. If not, create a call-to-action (CTA) for your potential customer to contact you for a quote.
Remember, as you build your tiers, the price will go up with each one. To stay on par with the perceived value, ensure you offer additional features or benefits to justify the cost.
The Benefits of Competitive Matrices
Essentially, you can use a competitive matrix to compare any characteristics of your company with a competitor.
Sometimes these matrices will be more visual in nature (a plotted graph), but sometimes it’s just an Excel document with the information listed in columns.
The goal of the competitive matrix is to see at a glance the competitive landscape and your position in the marketplace. This will help you see gaps in the marketplace and hone in on your unique value proposition.
Perhaps, after looking at a competitive matrix, you brainstorm new product ideas or new tools or features that you hadn’t considered before. Or maybe you come out of it with a ton of ideas on how to improve your content marketing strategy.
Regardless, you can use a competitive matrix for a lot of reasons. You can use it to develop new ideas, or you can use it to train sales staff on how to differentiate your company from the competition.
After figuring out what you’re going to do with the information, make sure you write down your ideas, develop KPIs, and regularly conduct this analysis to stay up to date with your strategy.
Now that you know what a competitive matrix is and how to use one, let’s review some templates you can use for your own strategy.
Competitive Matrix Templates
Competitive matrices are used to facilitate the process of comparing your business with other industry competitors. They help you take advantage of strengths and opportunities, while identifying weaknesses and threats before they become detrimental. Ultimately, a competitive matrix is an industry-analysis tool that makes your life easier. To make the process even easier, use the following competitive matrix templates.
1. Two-Feature Competitive Landscape Chart
One type of competitive matrix you can do is a simple comparison of features. You can use this information to plot where your company is compared to competitors.
The features could be something like price or customization potential. Then, you’d place the logos of each company (including yours) on the graph, depending on how well a company executes a certain feature. The point of this matrix is to visualize who does what better, so you can see what you have to work on and how to differentiate yourself against the competition.
2. Content Marketing Analysis Template
As a content marketer, this is my favorite template. With this, you can compare social media followers, blog strategy, email strategy, SEO, etc. This will help you decide where you need to focus your content strategy. Should you place emphasis on Twitter rather than Facebook? If you download this template, it also includes a graph and more strategies to analyze.
3. SWOT Analysis Template
A basic competitive matrix is the SWOT analysis. Conducting a SWOT analysis will help you identify areas where you could improve. You should conduct a SWOT analysis for yourself and your competition. Knowing what weaknesses your competition has will help your sales reps and help you make improvements in those areas.
4. Review Tracker
A review tracker matrix will help you see at a glance the types of reviews you get versus your competitors. It’s important not to forget about reviews because they can have a significant impact on a business. With this template, you can also use a scoring system to normalize the averages.
After reviewing those templates, it’s time to see what a competitive matrix looks like in action. Here are some examples below.
Competitive Matrix Examples
This is a public HubSpot competitive matrix comparing the overall pricing of our CRM versus Salesforce. It’s a standard matrix meant to help people see the difference between the CRMs at a glance.
This is a great example of what a feature matrix might look like. SugarSync compares its feature offerings against the competition in an easy-to-understand visualization.
In this example, 360iResearch reports on survey management software. This is a competitor grid showing which companies have the best product satisfaction and business strategy.
No competition, no progress.
Innately, competition feels unpleasant; however, that’s not all it has to be. It can lead to growth and make you look deeper into your business to find ways to improve. Competitive matrices are great tools to help you uncover how you’re different from your competitors. They show areas of improvement and where you excel. If you’re having trouble evaluating your company’s position in your industry, use this article and the above tools to help.
Editor’s note: This post was originally published in January 2021 and has been updated for comprehensiveness.