Your construction business needs KPIs to measure goals and strive for success. In particular, what you need to be most aware of is where your construction company stands in relation to others in the market.
This is where competitor analysis comes in handy. Competitor analysis provides an organized and structured way to evaluate your current competition, enabling you to spot gaps in the market, seize new opportunities, and gain helpful insights for your future campaigns. The goal is to gain a competitive advantage! This is no surprise since, according to Forbes, 57% of companies cited gaining a competitive edge as one of the top three priorities in any industry.
Read on this blog to learn something interesting about competitor analysis. We will also cover the seven popular competitor analysis frameworks you can use for your construction business. Use them all before your competitors will do!
But What is a Competitor Analysis?
For the majority, competitor analysis is simply defined as the art of knowing your enemy.
In simpler terms, it is a systematic process of comparing your business to its nearby competitors using a set of criteria. This method, when used, allows you to gather some of the most critical information you need about your business and your competitor’s business.
Information such as your competitor’s products, service offerings, business strategies, marketing efforts, and others are easy to obtain. Ultimately, a competitor analysis framework helps you develop a structured visual model. You only need the right frameworks tailored to your business in order to know exactly the information you have to gather from your competitors.
Benefits of Using a Competitor Analysis Framework
There are a lot of competitor analysis advantages, and we will discuss each one below:
1. Keeping a pulse of your competition
When done regularly, competitor analysis allows you to track rival brands. Like what we stated earlier, you will have the opportunity to obtain so many types of information. This information about your competitors will give you an edge over the others.
In addition, you can always track the major market trends, which helps you strategize your company’s goals.
2. Determine market gaps
When conducting a competitor analysis, you can see what areas your competitors lack or fall short in. This occurrence is usually called a market gap, enabling you to determine unserved and underserved markets for your construction business.
Your competitor analysis framework helps you determine these existing gaps and capitalize on the areas where your closest competitors are falling short. Next, you can come up with ways to penetrate in the market by offering the service/product gaps that your competitors are not offering!
In short, they did not meet the demands or fulfill the target market, so you do it instead!
3. Create better products and service offerings
Another benefit of competitor analysis for your business is product development. Any types of businesses are always in the race of developing better, newer, and more efficient products/services.
So, when you conduct a competitor market analysis, you will have more opportunities to create better versions of what you offer. For instance, you may try to enhance your construction service offerings when it comes to:
- Quality
- Price
- Efficiency
Another thing you need to remember when you try to improve your services is to be careful not to cross legal boundaries. You do not want to dwell on legal conflicts.
4. Discover possible threats
One of your duties as a business owner is to defend your brand against potential threats. With competitor analysis, you can spot potential threats that are harming your business. Moreover, using a framework helps you become prepared to face these threats.
Conducting a competitor analysis and using the right framework helps you make changes to protect your brand and business in the future.
5. Provides a benchmark to track growth
The need to determine ways to measure growth is crucial for your business. Measuring and tracking your company’s growth can only be possible with competitor analysis. It will provide a benchmark for you to measure and help you find ways to improve your brand, see how your brand awareness improves, how your ROI has increased, and so much more.
What are the Most Used Competitor Analysis Frameworks?
1. SWOT Analysis
The SWOT Analysis has been useful for decades already and for so many good reasons. It simply organizes a company’s information in different categories:
- Strengths: This information focuses on the internal factors that usually bring in benefits, such as trained staff, and so on.
- Weaknesses: These are external factors that result in disadvantages, such as a small marketing budget.
- Opportunities: These are external factors that pose opportunities, like higher demand for a service offering.
- Threats: They are external factors that pose challenges, such as the increasing costs of supplies.
If you want to understand your competitors’ strengths and weaknesses, we always recommend SWOT analysis. This framework is particularly helpful for determining potential competitor benefits your business may acquire over others and for seeking areas for improvement.
2. Porter’s Five Forces
Another useful framework is Porter’s Five Forces, which is a competitor framework that helps you assess the five existing market forces in your industry:
- Intensity of competitive rivalry
- The threat of new entrants
- Bargaining power of suppliers
- Bargaining power of suppliers
- Threat of substitutes
This framework for competitor analysis is very useful for analyzing the competitive structure of the whole market and industry. Therefore, such information can be helpful when reshaping and refining business strategies and setting targeted goals in the midst of an ever-growing competitive landscape.
3. Strategic group analysis
This competitor analysis framework does exactly what it says: it organizes your competitors into groups based on the similarities of their strategies.
You can set apart or group your competitors in a range of ways. Perhaps you would like to group them by their pricing methods, construction marketing strategies, or range of service offerings. Do not forget to include your own business in the overall analysis. It helps you better understand who you are most closely competing in the market. Additionally, you can better understand the impact of all the existing strategies from these different companies/competitors.
If you find out that the three most successful companies within your niche are all grouped with the same pricing method, it might be the perfect time to determine whether doing the same thing can benefit your own business.
4. Growth-share matrix
The growth-share matrix organizes your company’s products against the growing competitive landscape. This particular competitor analysis framework is found to be very useful for large-scale companies with massive portfolio of products and services.
Moreover, the growth-share matrix is a framework divided into four major quadrants:
- Stars: This quadrant points to the products with high market share and continuous growth.
- Question marks: These are new products in the market with higher growth yet lower market share.
- Cash cows: These are products with lower growth yet with higher market share. These are usually used to fund investment in the quadrant star:
- Pets: These are products with both lower growth and market share. You can then decide whether to reposition them or give them up.
Using this market analysis framework helps determine which items to prioritize more, which to reposition, and which to discard.
5. Perceptual mapping
Also known as positioning mapping, this framework visualizes a company’s view and rival companies on a plot graph. In order to successfully use this framework, you can start by choosing two factors and make them the basis for the comparison. You can choose quality and price as the two factors you want to compare. Next, you can plot where your business and its competitors fall on these two factors.
Perceptual mapping is very useful for getting a bird s-eye view of how your construction clients perceive your company in relation to your competitors. When you use this framework, your company can definitely determine market gaps and trends, which can then help create adjustments if necessary. As a result, it improves your existing positioning strategy!
6. Business model canvas
A business model canvas is a type of framework that breaks down your current business model, enhancing overall clarity and focusing on the most critical factors. This framework is a single-lone analysis that is typically divided into nine elements:
- Value proposition: Why do customers buy the proposition?
- Customer segments: Who are the customers?
- Channels: How are the propositions marketed, sold, and delivered?
- Customer relationships: How is the customer treated in the entire buyer journey?
- Activities: What unique strategies does the business use to deliver its propositions?
- Revenue streams: How is the revenue generated?
- Resources: What strategic assets are necessary to compete?
- Core structure: What are the main cost drivers, and how are they associated with the revenue?
- Partnerships: What can the company outsource so it can solely focus on its main activities?
7. Customer journey map
The customer journey map, also known as the user journey map, is a framework that offers a visual story of the customer’s interactions and engagements with your brand.
You can start with this framework by mapping all the customer channels. It can be your construction website, social channels, newsletters, email support, paid media, and more. You can map a customer journey across the channels we mentioned, and you have to do this for every single buyer persona. The customer experience in every touchpoint has to be in the map, alongside engagement metrics those customers hit!
Using customer journey maps as your competitor analysis approach definitely helps you get insights into the most common customer pain points and find ways to better improve them.
Take Your Business to New Heights using Competitor Analysis!
Now you finally know what competitor analysis is, the different frameworks accessible today, it is high time to decide which ones works best for your business! The right framework depends on what you are trying to accomplish – whether you want to achieve a goal, to accomplish something, or solve a problem!
If you do not know how to pick the right competitor analysis, we’ve got you covered!
We are ConstructionMarketing.io, a full-service digital marketing agency that will help you ultimately beat your competitors! Our agency believes that an effective competitor analysis offers critical insights into your business rivals. Our team helps you drive your construction business by examining the marketplace and slowly building your competitive edge!
Locally, nationally, and even internationally, your biggest competitors are out there! So, we will help you get to know more about them. The more you know about your competitors, the clearer you know their moves and the better you understand what it takes to beat them!
Also, as a full-service agency, we offer a complete suite of online marketing solutions that you may want to avail: