What is a Competitive Landscape?

Definition: A competitive landscape is a complete description of competitors and their relative position at a particular market. It is a strategic marketing concept that applies to the conditions of competition and rivalry that a company and its products have to face at the market they are part of.

What Does Competitive Landscape Mean?

Every company should monitor its competitive landscape. This involves embracing information about each of its participants, their products, prices, market share, current strategies and main strengths and weaknesses.

Since the company is not alone in the market, it is indispensable to understand who the rivals are and how they usually perform with the purpose of improving its own market position. Direct and indirect competitors should be identified and analyzed. This valuable information will support decision makers when defining and evaluating company strategies.

The analysis should start by defining the relevant market. Only similar products should be considered as competitors or substitutes. As the company increases the number and variety of products and lines the competitive landscape will become more complex.

Example

Cindy Cakes is a firm that sells pound cakes to supermarkets located in a small city. The General Manager thinks that Cindy Cakes could raise prices in 15-20% because there is no other brand offering pound cakes to supermarkets.

However, the company’s Marketing Manager said that competition comes from other sweet bakeries too. If prices increase considerably, some consumers are likely to shift to other sweet options available on the shelves. He identified that there were at least five companies that offered about 25 sweet bakery products in supermarkets located in the city.

Moreover, he considers that ice cream and ice cream-based desserts are competitors too. After an analysis of the competitive landscape the company decided that prices should be increased only in 5% and that new low-calorie varieties should be developed and sold at higher prices.

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