06 Competitive Analysis

Competitive Analysis Skill

Overview

Generate Section 06 of the business plan: the competitive analysis. Use this skill to map the real competitive landscape, test the strength of the business position, and show what actually makes the venture defensible.

Use When

• Use when drafting or revising the competitive analysis section for a plan, proposal, or pitch.
• Use when the business needs a credible account of competitors, substitutes, and market position.
• Use when pricing, marketing, or moat claims need to be tested against reality.

Do Not Use When

• Do not use to make vague claims that the business has "no competition".
• Do not confuse competition mapping with customer segmentation or market sizing.
• Do not claim a moat unless the evidence supports it.

Required Inputs

• Offer definition, target customer, price point, and operating geography
• Known direct competitors, indirect competitors, and substitutes
• Any evidence on competitor features, positioning, channels, and economics
• Adjacent market, marketing, and pricing sections that shape the competitive frame

Workflow

1. Define the competition from the buyer's point of view, including substitutes and inaction.
2. Profile the most relevant competitors and compare them on decision-relevant dimensions.
3. Assess market position, barriers to entry, and the strength of the claimed advantage.
4. Translate findings into a practical positioning argument for the business.
5. Reconcile the analysis with target market, pricing, sales, and risk assumptions.
6. Flag weak or unsupported moat claims that will fail under diligence.

Quality Bar

• Competitors are real, relevant, and analysed on criteria that influence choice.
• The positioning argument is specific and evidence-based.
• Claimed advantages are concrete, not slogan-level.
• The section shows how the business wins, not just who else exists.

Anti-Patterns

• Ignoring substitutes or the customer's option to do nothing.
• Calling routine strengths like "good service" or "quality" a moat.
• Using a SWOT table without real comparative analysis behind it.
• Competitive claims that contradict channel, margin, or execution reality.

Outputs

• A finished or revised Section 06 competitive analysis
• A competitor matrix, positioning argument, and moat assessment
• Explicit assumptions or diligence gaps to resolve before finalisation

Generate a rigorous competitive landscape analysis that honestly assesses the competition and demonstrates a defensible competitive advantage.

Required Elements

1. Direct competitors Companies offering the same solution to the same market
2. Indirect competitors Alternative solutions to the same problem
3. Substitute threats Different approaches customers might take (including "do nothing")
4. Competitor profiles (3-5 key competitors) Detailed analysis using template below
5. Competitive matrix Feature/capability comparison with quantified scoring
6. Market share analysis How share is distributed and measured (Farris)
7. SWOT analysis Strengths, Weaknesses, Opportunities, Threats
8. Competitive advantage / moat What makes the business defensible
9. Barriers to entry What stops new competitors from entering
10. Market positioning Where the business sits relative to competitors
11. Guerrilla positioning How to compete asymmetrically against larger players

Competitor Profile Template

Company:
Website:
Founded / Years in market:
Size/Revenue (estimated):
Target market:
Key products/services:
Pricing model and range:
Strengths (be honest):
Weaknesses (verified, not assumed):
Market share (estimated %):
Revenue share vs. unit share: [Premium / Parity / Volume player]
Digital maturity: [Analogue / Digitising / Digital-first / AI-augmented / Immersive]
Threat level: [High / Medium / Low]
Likely response to our entry: [Aggressive / Moderate / Indifferent]

Competitive Matrix Format

Score each capability 1-5 (1=weak, 5=strong):

Rule: Never score the company highest on every dimension investors will not believe it. Identify 2-3 dimensions where the business genuinely leads and acknowledge where competitors are stronger.

Market Share Analysis (Farris)

How Share Is Measured

Define the relevant share metric for this industry:

Industry Concentration

CR4 = Combined market share of top 4 firms
HHI = Sum of (each firm's share)^2

Types of Competitive Moats

Guerrilla Competitive Strategy

For small businesses and startups competing against larger players:

Asymmetric Advantages

• Speed Launch and iterate faster than incumbents can approve a meeting
• Focus Own a narrow niche that is too small for big players to care about
• Relationships Build personal connections that corporations cannot replicate
• Flexibility Customise solutions while competitors offer one-size-fits-all
• Values alignment Appeal to customers who prefer local, ethical, or authentic brands

Positioning Against Incumbents

Never compete on the incumbent's terms. Instead:

• Redefine the category criteria in the customer's mind
• Compete on dimensions incumbents cannot match (speed, personalisation, community)
• Target underserved segments the incumbent ignores
• Use education-based marketing to position as the expert, not the bigger brand

Generation Process

1. Ask for: industry, key competitors (if known), primary differentiator
2. Research direct, indirect, and substitute competitors
3. Build competitor profiles with honest assessment
4. Calculate or estimate market share distribution
5. Create competitive comparison matrix with quantified scores
6. Conduct SWOT analysis with real weaknesses
7. Identify and articulate the competitive moat with durability assessment
8. Define guerrilla positioning if competing against larger players
9. Assess sustainability of the advantage over 3-5 years

Quality Criteria

• Analysis includes indirect competitors and substitutes (not just direct)
• Competitor strengths are acknowledged honestly investors spot bias
• SWOT weaknesses are real, not disguised strengths
• Market share is quantified or estimated with stated sources
• Competitive advantage is specific and defensible, not "better customer service"
• Moat durability is assessed how long before competitors can replicate
• Positioning is distinct clear blue water between this business and alternatives
• Guerrilla strategy is included for startups and small businesses

Porter's Five Forces Industry Analysis

(Porter, M.E., 1980)

Apply Porter's Five Forces to establish the structural attractiveness of the industry before detailing individual competitors. Five Forces explains why an industry is profitable or not competitor analysis explains who the players are. Both are required for a complete competitive analysis.

Five Forces summary: State whether the industry is structurally attractive (most forces Low = favourable; above-average returns sustainable) or structurally unattractive (most forces High = unfavourable; competition erodes returns to minimum). Then explain how this business's competitive strategy addresses the most unfavourable forces.

Strategic group analysis: Once Five Forces are assessed at the industry level, map competitors into strategic groups clusters of firms following similar strategies. Within-group rivalry is most intense; between-group competition is moderated by mobility barriers. Identify which group this business belongs to and what barriers protect it.

Cross-reference: references/competitive-strategy-porter.md for the full Five Forces framework with assessment questions and Uganda/EA examples. references/industry-structure-porter.md (in 04-market-analysis/) for strategic group mapping and industry evolution analysis. meta-due-diligence/references/osint-business-intelligence.md for methodology on gathering competitor intelligence in low-data EA markets.

Business Model vs Strategy Analysis (Teece)

When assessing competitive position, distinguish between the business model and the competitive strategy they are related but not the same (Teece, 2010):

Application: For each competitor in the analysis, assess:

1. Do they share the same business model as us? (If yes, strategy must differentiate us)
2. What makes our version of the model harder to replicate? (IP, relationships, data, speed, community)
3. Can a competitor adopt our model quickly, or do we have complementary assets (brand, supplier relationships, regulatory approvals, distribution) that they cannot easily acquire?

Value capture mechanisms that create durable competitive advantage (Teece, 2010):

• Intellectual property (patents, trademarks, trade secrets)
• Complementary assets distribution networks, customer relationships, manufacturing capacity
• First-mover switching costs (customers embedded in our platform or processes)
• Network effects (value increases as more users join)
• Complexity and tacit knowledge embedded in processes not visible to competitors

Differentiation Analysis (Kaza)

Beyond standard competitive dimensions, assess differentiation across four experience layers (Kaza, 2025):

The signature touch principle: Small businesses can outcompete on the boundary interactions that large competitors standardise out of existence. Identify 2-3 signature touches specific to this business (e.g., personalised follow-up, handwritten note, proactive update before the customer asks).

Narrow specialisation as competitive moat: A business that commits to one offering, one process, or one customer type achieves operational excellence and a clear customer promise that broad-market competitors cannot match. Document the deliberate trade-offs the business makes what it chooses NOT to do is as strategically significant as what it does.

References

• Competitive metrics and share analysis: See references/competitive-metrics.md for market share calculations, concentration analysis, brand development indices, and competitive benchmarking formulas from Farris
• Positioning and differentiation: See references/positioning-strategy.md for guerrilla positioning tactics, value-based differentiation frameworks, perceptual mapping, and blue ocean positioning approaches
• Porter's Five Forces and competitive strategy: See references/competitive-strategy-porter.md for the full Five Forces framework with Uganda/EA examples, three generic strategies (cost leadership, differentiation, focus), the four-component competitor analysis framework (future goals, current strategy, assumptions, capabilities), market signals, and strategic groups from Porter (1980)
• Industry structure, strategic groups, and industry evolution: See ../04-market-analysis/references/industry-structure-porter.md for strategic group mapping methodology, mobility barriers, industry evolution driving forces, and the product life cycle critique from Porter (1980)
• Competitor intelligence methodology: See ../meta-due-diligence/references/osint-business-intelligence.md for the 5-layer OSINT framework for gathering competitor intelligence in low-data EA markets physical surveys, digital footprint analysis, supplier/distributor conversations, and red flag registers
• Competitive strategy tools: See references/competitive-strategy-tools.md for competitor analysis framework, competitive position rating (0-5 scale), strategy maps, strategic gap analysis, generic strategies, value chain analysis, strategy evaluation tests, competitive life cycle, and Blue Ocean Strategy from Evans, Harris & Lenox, and Fahey & Randall
• Strategy Choice Cascade: See references/strategy-cascade-framework.md for the five-question strategy cascade, five strategy traps, where-to-play and how-to-win choices, activity system mapping, strategy logic flow, reverse engineering strategic choices, and cascade-to-business-plan mapping from Lafley & Martin
• Business model vs strategy distinction, value capture mechanisms, business model archetypes: See ../03-products-services/references/business-models-innovation-teece.md for Teece's full framework
• Differentiation types and signature touch principle: See ../07-marketing-sales-strategy/references/small-business-unconventional-strategy.md for Kaza's four differentiation layers and case studies
• 3C Strategic Triangle and competitive dynamics (Ohmae): See references/mind-of-strategist-ohmae.md for Ohmae's 3C Strategic Triangle (corporation/customer/competition), Key Factors for Success identification method (hypothesis-first + KFS industry table), four routes to strategic advantage (KFS focus, relative superiority, aggressive initiatives, Strategic Degrees of Freedom), Strategic Planning Unit tests, customer segmentation (objectives vs. coverage), profit diagrams, issue diagrams, challenging constraints method, and Uganda/EA application from Ohmae (McGraw-Hill, 1982). Read when defining the competitive positioning logic, especially for businesses that cannot compete on all dimensions and need to identify where to concentrate.
• Layered competitive advantage, Value Net, and purchase cycle (Portable MBA): See references/competitive-dynamics-portable-mba.md for the onstage/backstage competitive advantage model (Coke/Pepsi case), 13-step purchase and consumption cycle as differentiation audit, value chain architecture disruption (Nucor/IKEA/Dell cases), outsourcing risk taxonomy (non-performance/value expropriation/elimination), complementors as sixth competitive force (Brandenburger & Nalebuff Value Net), five determinants of complementor power, and Uganda/EA application from Fahey & Randall, eds. (Wiley, 2000). Read when assessing whether competitive advantages have backstage support, identifying non-obvious differentiation points across the purchase cycle, or evaluating outsourcing risks.
• 24 competitive and business analysis methods (Fleisher & Bensoussan): See references/competitive-analysis-methods-fleisher.md for the complete toolkit of 24 methods across six categories (strategic/industry, competitor intelligence, financial, environmental, futures, analytical process) including Nine Forces, competitive positioning, business model analysis, SERVO, McKinsey 7S, shadowing, win/loss analysis, benchmarking, war gaming, country risk, driving forces, technology forecasting, ACH, and linchpin analysis. Includes FAROUT evaluation framework, Business Plan Application Table, Method Selector, and Uganda/EA adaptations for low-data markets, informal competition, and relationship-based intelligence. Source: Fleisher & Bensoussan (FT Press, 2007). Read when selecting the right analysis method for a specific competitive question, explaining method choice to investors, or stress-testing analytical assumptions.
• SWOT/TOWS, PESTLE, Porter's Five Forces, value chain structured descriptions: See ../meta-market-validation/references/business-analysis-techniques-cadle.md (Chapter 1 and Chapter 4 tools) for precise, step-by-step descriptions of PESTLE (Tool 1), Porter's Five Forces (Tool 2), SWOT/TOWS (Tool 6), Value Proposition Analysis (Tool 33), and Value Chain Analysis (Tool 34) with guidance on correct application and common mistakes Source: Cadle, Paul & Turner (BCS, 2010). Read when setting up the competitive analysis framework or when the client needs the analytical approach explained clearly.

July 2026 Portable Contract

Required Inputs

Outputs

Evidence Produced

Capability and Permission Boundaries

For 06 competitive analysis, the controlling focus is named rivals and substitutes, customer choice criteria, relative position, likely response, concentration, and defensible advantage. This skill may inspect public and supplied competitive evidence in read-only mode; it may not misrepresent a competitor, scrape outside authorised terms, or assert proprietary advantage without proof. Its normal mode is read-only analysis and drafting. Any mutation, external communication, spending, certification, or professional conclusion outside that boundary requires explicit authority and must remain traceable to the approving role.

Degraded Mode

For 06 competitive analysis, loss of evidence about named rivals and substitutes, customer choice criteria, relative position, likely response, concentration, and defensible advantage activates degraded mode. If the controlling 06 competitive analysis evidence is unavailable, the same boundary applies. When competitor evidence is unavailable, state the untested claim and design a verification step rather than inventing a score. Return the verified subset, label the affected decision qualified or not assessed, explain the downstream consequence, and state the smallest evidence request or authorised action that permits recovery. Do not convert the missing check into a pass.

Decision Rules

Workflow

1. Define the exact 06 competitive analysis decision, intended reader, jurisdiction, business stage, and permission boundary.
2. Collect named competitors and substitutes, customer decision criteria, observed offers, and defensibility evidence and map each material conclusion to its source; stop the affected conclusion when an input could change it.
3. Apply the specialist methods and directly linked references already contained in this skill, retaining its domain thresholds, calculations, and Uganda or East Africa context where applicable.
4. Compare the credible alternatives, test the countercase and failure path, and apply the decision table rather than selecting a template default.
5. Produce competitive analysis, positioning choice, and response scenarios with the evidence, exception, and handoff records; reconcile every shared assumption with its owning section.
6. Run the section quality checks, applicable finance or professional review, and anti-slop gate. If a gate fails, correct the evidence or decision and return to the responsible step.

Quality Standards

• Competitive analysis, positioning choice, and response scenarios must answer a real decision for the named bank, investor, DFI, grant, board, or strategic-partner reader.
• Competitor fact cards, source dates, positioning map, and scenario triggers must be source-linked, dated where facts can change, and sufficient for another reviewer to reproduce the conclusion.
• The section exposes its countercase, stop condition, recovery action, and effect on neighbouring sections.
• No unavailable source, calculation, tool, or professional review is reported as passed; finance and statutory judgements follow the governing doctrine.
• Language remains specific to 06 competitive analysis, uses British English naturally, and passes the repository anti-slop gate without promotional filler.

Anti-Patterns

• In 06 competitive analysis, treating an unavailable named competitors and substitutes, customer decision criteria, observed offers, and defensibility evidence as confirmed. Correction: qualify the affected conclusion and issue the named evidence request.
• Producing competitive analysis, positioning choice, and response scenarios that restates the brief but makes no choice. Correction: record the choice, rejected alternative, rationale, countercase, and implication.
• Ignoring a conflicting upstream assumption. Correction: return it to its owning section and resume only from a reconciled version.
• Reporting an unavailable check as passed. Correction: mark it not assessed and narrow the release state.
• Claiming compliance, assurance, bankability, or investor readiness from narrative quality. Correction: run the applicable gate and retain its evidence.
• Copying the worked example into a client plan. Correction: use the method only and replace every fact with verified engagement evidence.

Worked Example

A founder claims superior service but cannot provide response-time evidence. Remove the superiority claim and compare verified service levels and trade-offs.

References

• Use the verified project evidence register and the owning upstream pipeline section for 06 competitive analysis; no local deep-dive reference is declared.
• For 06 competitive analysis claims involving money, tax, grants, reserves, revenue, cost, valuation, or financial statements, apply the Chwezi finance doctrine and record the required professional-review state; illustrative figures never become client facts.