Strategic Frameworks for Competitive Positioning

Defining Competitive Positioning

Competitive position charting: By charting your competitive position, you can show how well your solution fulfills a customer's need in a visual way and, at the same time, make a comparison of this against how your competitors do it.

• Direct competition: Companies doing very similar things to your own.
• Indirect competition: Companies selling different products or services but fulfilling the same need or solving the same problem.

Visual Tools for Market Analysis

• Value Curves: Create a value curve by plotting the alternative offers in relation to the identified dimensions of value (those most prioritized by your persona).
• The Petal Diagram: A diagram that considers that we may be creating a new market or operating within one that is at the intersection of several different markets.

The Reality of Market Competition

The Inevitability of Competition

"We have no competition." This quotation is one of the biggest tell-tale signs that an entrepreneur has not done sufficient homework related to their business concept.

Behavioral Shifts as Competition

Sometimes this competition can be direct or indirect. In reality, this might not be a simple switch between product A and product B but can also include shifts in behavior or technology use, as discussed when addressing market timing. For example, when email was first introduced, the challenge was to switch behaviors into a completely new way of doing things. There was nothing similar that existed in the market at the time that allowed for comparison.

Step-by-Step Competitive Mapping

How to Show Competitive Position (X/Y Graph)

1. Divide the x and y axis into two halves.
2. On the x-axis, include the most important priority of your persona.
3. On the part of the axis closest to the origin, write the negative and unwanted state of this priority.
4. On the other side of the x-axis, write the positive and desired state of this priority.
5. On the y-axis, write the second top priority of your persona.
6. Plot your startup on the graph alongside your competitors.

How to Build a Value Curve

1. Identify their specific dimensions of value.
2. Identify any alternative solutions that exist (competitors and substitutes).
3. Create a value curve by plotting the alternative offers in relation to the identified dimensions of value.
4. Clarify in an explicit way how your solution can create value that is distinct from these alternatives.

How to Build a Petal Diagram

1. Place the startup in the center of the diagram.
2. To indicate where their customers for this new market would come from, draw the five adjacent market segments.
3. Fill in the market spaces with the names of the companies that are representative players in each of the adjacent markets.
4. Finally, you could show the current and projected market sizes of the adjacent markets.