Because of the transparency of financial information, and the amount of data it can yield to a trained eye, accountants are ideally suited to a wide range of competitor analysis activities. We are well qualified to undertake a variety of different competitor analysis projects ourselves and also have an extensive network of contacts in diverse areas of business. At the simpler end we can guide you through the process of compiling your own competitor matrix, or complete one for you, we can access and interpret competitor’s accounts and returns from Companies House, and we can help you identify opportunities within your market.
More complex projects might include an analysis of a rival’s advertising and media output, or an in-depth look at the likely response of competitors to your own strategy for the coming year. Whatever you need, our first port of call will be an initial consultation (free to new customers) to discuss the best way for us to help you. From there we’ll set a time-frame and a cost for the project, as well as establishing the kind of interaction that you want from us along the way. At the heart of our approach to work is an holistic view. Above all else we believe in providing high quality data [link to systems] that accurately reflects the needs of the organisation it serves.
Competitor analysis means using legitimately available information to assess the strengths and weaknesses of rivals and potential rivals in your industry. For the trained individual, this information is everywhere, in the form of press releases, advertising media, budget statements, mission statements, annual returns and accounts, to name just a few and accountants are ideally placed to interpret much of this information in light of our understanding of how it’s compiled.
Analysis of competitors is a much neglected field in modern business and can provide significant offensive and defensive advantages when used correctly. In-depth knowledge of a competitor’s position and strategy can not only allow you to better predict their actions, but also their responses to your own. This, in turn, allows you to plan one step ahead of that response.
Competitor analysis can be used offensively – that is, to take advantage of available opportunities – and defensively – in order to protect your company from the offensive strategy of others, and improve on its weaknesses. Both approaches can yield significant benefits in market share, and therefore profit. This applies not only to existing competitors but potential threats and opportunities arising from small or even non-existent companies in your market. Simply put, competitor analysis provides the means for your company to offer a superior product or service to your customers than your competitors do.
One simple example of competitor analysis that can be easily understood and utilised is the construction of a competitor matrix. This is a simple 2 dimensional table that contains information about competitor performance across key domains. The information is given in numerical form e.g. as a rating out of 10 and subject to a multiplying factor based on the importance of that domain as a proportion of 1.0. For example:
[Table 1 As Attached]
The value in this is not just in the way it reveals who amongst your competitors is performing the best, and why, but also in that, during the process of researching and building this table, there is an inevitable requirement to think critically about your area of business, and to identify the strands within it that really make the difference. Some of the questions that this process will answer are:
What is your industry?
Who are your competitors?
Who are your customers?
What benefits do your customers expect?
What are the key factors for success in your industry?
These questions alone can act as a stimulus for radical and productive change in your own company.
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