This segment is about Competitive Analysis in general and about the strategic importance of differentiation (being different from your competition and better). It discusses Perceptual Mapping – a tool for understanding customer-perceptions of brands and for finding unique and differntiable brand positions (white spaces).
A measure of competitive intensity in an industry is the Herfindahl-Hirschman Index (HHI). It is a commonly accepted measure of market concentration. Prof. Andrew Chin, of The University of North Carolina School of Law, has an online calculator for calculating HHI. The smaller the HHI number the more competitive an industry is. Conversely, the larger the number the more concentrated the industry. An industry with HHI below 1000 is considered unconcentrated, 1000-1800 moderately concentrated, over 1800 highly concentrated
Differentiation is about securing a unique position in your customers’ mind; it is about owning and occupying valuable “real-estate” in your customers’ minds. The strategic value is that differentiation provides insulation against competitive threat and long term sustainable competitve advantage (and hence profitability).
Overview on competitive analysis process and tools. This is a good primer for both online and “brick and mortar” businesses.
Using Internet to do competitive analysis : 10 new ways!
Obsess over CUSTOMERS not COMPETITORS. An inspirational and cautionary tale from Jeff Bezos of Amazon. This puts in perspective Competitive Analysis.
The Brand Gap slide presentation is an excellent (and easy to follow) presentation on the strategic importance of differentiating your product and brand from competition
Perceptual Maps and Positioning:
bam–Brand Association Map…a detailed visual ONLINE identity of a brand. Perceptual Mapping technique applied to the Internet in identifying online brand identity.
campaign-2000-blog is an interesting example of Perceptual Mapping technique applied to positioning Presidential candidates during the 2000 Presidential campaign.