Competitor analysis has several important roles in strategic planning:
- to help management understand their competitive advantage or disadvantage
- to generate understanding of competitors’ past, present and future strategies
- to provide an informed basis for the development of strategies to achieve competitive advantage in the future.
- to help forecast the returns that may be made from future investments
Describing the competition means continually covering at least two dimensions:
- identification of companies that do exactly what your company does
- definition of all possible alternatives that could take the place of your product or service in the mind of the potential customer.