Competitive Assessment 101- aka "how long is a piece of string"

I was asked a simple question the other day by a colleague just starting up a new business- he wanted to know how much time and effort he should expect to put into completing a market assessment. Simple question, right? My initial thought was to say something smart like “how long is a piece of string”, or “how long have you got”, but he was being serious. Anyway we talked for about an hour or so and I thought I would try to capture the main points we discussed.

A market assessment typically covers the following:
-Target market size (broken down to sub-segments to be targeted)
-Segmentation analysis, including any additional segments served by your competitors
-Key industry groups and associations
-Decision makers (by job function)
-Supply chain and distribution channels
-Competitive analysis
-Pricing trends and market forecasts

The good news I told him was that these steps did not have to be completed sequentially, however aspects of many of these streams of work are inter-related, so it is likely that he would cycle through each step more than once as more and more information is gathered.

After talking for a while we decided the piece of string was much shorter than initially thought since he already had spent a great deal of time scoping and sizing the market opportunity. However his biggest gap was really the competitive analysis piece of the puzzle. We sketched out the follow outline:

Key issues to examine:
- Identify major competitors in each sub-segment
- Identify major potential customers, and promising startups

- Determine who is involved in the customer’s decision making process
- Understand the buying process- purchase frequency and cycles

- Uncover key product/service performance attributes
- Uncover customers’ selection criteria (decision making model)

- Gather ratings against those attributes and criteria for you and your competitors
- Understand barriers to switching

After we had this all down on paper my friend asked another simple question- “how long will it take you to find out all this information for me”? I thought about that piece of string again, but instead we set a date for another meeting to scope out the work and develop a detailed time-line.