Funding Formula Stage 1

Competitor Analysis

1. What is a Competitor Analysis?

A competitor analysis means identifying your competitors and evaluating their strategies, and is an important first step in your organization’s Resource Mobilization.

A competitor analysis will help determine the strengths and weaknesses of competitor organizations, compared to your own. By gaining information about others’ priorities, activities, clients, services, financial status and strategies, you are in a better position to assess the reasons for both their successes and failures, as well as how you can potentially collaborate with them. Once you know this you can find out what makes your organizations’ products or services unique, and which you want to promote to your donors.

2. Why should you undertake a Competitor Analysis?

You should know what your competitors are doing! Many organizations believe they are providing a good service, but do not have reliable information showing how clients perceive their service, or how it compares to services provided by other organisations. Instead, they operate based on guesses and intuition. This places many organizations at risk of competitive blind spots when it comes to resource mobilisation, as well as missing opportunities for learning and partnership between organisations to improve services to clients and maximise donor funding.

A competitor analysis is an invaluable tool because it can help you identify ways to attract new clients, as well as keeping your current clients satisfied with your services. It can also help you identify ways to attract new donors, as well as keeping your existing donors happy.

3. What types of organizations should you consider as competitors?

Any organization providing a product or service similar to your organisation’s products and services in the same geographic area is a direct competitor. Organizations offering dissimilar or substitute products and services are indirect competitors. Competitors are also potential partners.

4. Conducting a Competitor Analysis

4.1 Where to find information about your competitors

Professional marketing research, such as focus groups and questionnaires, can provide valuable information about your competition, but you can also find information in the following sources:

Recorded Data: this is easily available in published form	Observable Data: this must be actively sought, often from several sources	Opportunistic Data: some of this data is anecdotal, from discussions with suppliers, clients and donors
• Annual report and accounts • Press releases • Newspaper articles • Presentations/ speeches • Donor annual reports and/ or donor websites	• Pricing / price lists • Advertising and awareness raising campaigns • Referral systems	• Meetings with donors • Seminars / conferences • Recruiting ex-employees • Social contacts with competitors

4.2 What information to collect

Use this template to collect key information about your competitors.

4.3 How to use the information

Once you have gathered data, you can begin your analysis and identify your competition’s strengths and weaknesses

Competitive objectives and strategies

For each of your competitors, identify their objectives and determine the strategies they are using to achieve them. For example, are your competitors trying to:
• maintain or increase reach and coverage?
• maximize short-term or long-term funding?
• introduce technologically improved products/services/equipment into your field or geographical area?
• establish themselves as leading providers or sector leaders?
• develop new markets for existing products/services?

Once you have identified your competitors’ objectives, decide what type of strategy they have employed and how that should factor into your own resource mobilisation strategy. Your competitors may be:
• reducing their prices or providing more free services
• advertising or conducting awareness raising activities in new forms of media, or more frequently
• improving a product/service with a new innovation

Product/service evaluation

Feedback from your service delivery points and clients will tell you the features and benefits of your services that are most important to your clients (and potential clients). It is important to see how your product or service is different from its competition.
Make a list of your products and services in order of importance, and prepare a table, using the template below, to compare with your competitors. You can find out how your clients rate your organization compared to your competition as: fair, good or excellent.

Template – Competitor Comparison

4.4 Competitor profiling

After conducting the analysis, you can create detailed profiles on each of your organisation’s competitors, including:

Background	– location of offices, branches and online presence – history, eg. key personalities, dates, events and trends – governance and org structure
Finances	– financial ratios, liquidity and cash flow – income and funding streams – especially which donors are supporting them, how much and for which projects?
Services	– flagship projects – the range of services offered, eg. types of contraception – quality of services – cost of each service – any key focus programming areas
Marketing	– advertising themes, online promotional strategy – marketing strategies – marketing materials – for clients and donors – quality of website
Personnel	– number of employees, key employees and skill sets – strength of management and management style – compensation, benefits and employee morale and retention rates
Other	– any recent changes in governance, directors, programming strategies – networking: membership or presence of alliances, working groups

4.5 Determine your organisation’s competitive position

By now it should be clear that your organisation is either:
• a leading provider
• one of several followers
• new to your marketplace

Now you understand your organisation’s competitive position, you can:
• identify and discuss key areas of competitive advantage and disadvantage, for example price, location of service delivery points, quality of services
• review the competitive environment for your product or service
• summarize the major threats and opportunities facing your organisation which may require action: you could use a SWOT Analysis in the next Block in this Stage
• develop and implement a marketing and awareness raising strategy: this should integrate your analysis of the competition with an assessment of your clients (what more/else do they want or need?) – this will strengthen your position
• you could use a PESTLE Analysis which looks at Political, Economic, Social, Technological, Legal, Environmental factors.

4.6 New competitors

In addition to looking at current competitors, think about what the competition may look like in the future. New organizations often bring new ideas and innovations to the marketplace and can quickly become major players. Don’t underestimate anyone. The most common sources of new competitors are:
• organizations competing in a related services/market
• organizations using related technologies
• new start-up organizations
Schedule a competitor analysis on a regular basis, perhaps once a year: remember your competitive research and analysis is never finished; it is an on-going process. Your competition can change quickly, new players can emerge tomorrow, and potential funding may upswing or downswing at any moment. Only when you clearly understand your competition can you can evaluate your own resource mobilisation position, and your competitive advantage, and seek to improve your own promotional efforts with both clients and donors.

Appendix I: Checklist

Donors, Networks and Partnership Mapping	Answer
Have you identified your organisation’s direct and indirect competitors?
Do you know how the clients in your target market rate your products/ services in comparison with your competitors’?
Have you compiled the intelligence you have gathered on each competitor in a format that fosters comparison of features and market positions?
Do you have strategies for building on your organisation’s strengths and minimizing your vulnerability where you have weaknesses?
Do you have strategies for coordination and maximising partnership opportunities with your competitors to minimise duplication?
Have you communicated the competitor information and your strategies to every employee who needs to know?
• in programmes and development?
• in finance?
• in service delivery?
Have you established procedures for keeping your competitor profiles current?