Competitor matrix: examples and how to use it

No matter what industry you operate in, competitors are vying for the same prospective customers as your organization. You can carve out your niche by adopting more strategic pricing, focusing on a narrow target market, or developing robust selling propositions.

When navigating a highly competitive market, one of the most efficient ways to do this is by researching and analyzing your competitors to understand your relative strengths and weaknesses. Competitor matrices are popular tools for doing this.

In this guide, we’ll explore what a competitive matrix is, some of the most popular and insightful options, and how to create your own.

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A competitive matrix (also known as a competitor matrix or a competitive analysis matrix) is a visual representation of a competitor analysis. By laying out the strengths, weaknesses, and competitive factors between an organization and its competitors, stakeholders can more easily:

• Compare the two organizations

• Identify your organization's position within a market

• Create a strategy that plays to your organization's strengths—or the competitor's weaknesses

Competitive matrices often follow a specific template or format for users to follow, such as using a grid or chart, to enable standardized analysis. Many types of competitor matrix options can help you compare various aspects of your business to competitors by focusing on sales, marketing, pricing, distribution channels, or other elements.

Competitor analysis templates

What are the five types of competitors?

A competitor is any organization trying to establish a greater market share or win over customers in your organization's market space. There are four different competitor types to track, plus the ‘disruptor’: 

1. Direct competitors are similar to your own organization and vie for the same customer accounts. They sell similar products and services that solve the same pain points.

2. Indirect competitors offer different products and services that nonetheless resolve the same pain points that your customers have. For example, if you sell tax assistance software, an indirect competitor would be a tax accountant who eliminates your prospect's need to buy the software.

3. Perceived competitors, which don't offer the same product or services as you and don't address the same pain point; however, customers believe they do.

4. Partner competitors or organizations that may have formerly been referral partners but are now entering your market space.

5. Disruptors, which are businesses or technologies that appear to come out of nowhere and completely change and distort the marketplace entirely, creating an entirely new business model. Examples are Airbnb, Netflix, and Uber. Identify companies in each of these buckets, so your organization can research them and identify the right strategies for competing with them.

Business leaders should prioritize the development of a competitive matrix for each competitor to gain an organized, thorough understanding of their own and competitors' advantages. This analysis provides several benefits through the organization, including:

• Streamlined communication of information: Sales, marketing, and product teams can clearly communicate strategic information in a competitive matrix.

• Identifying actions that are out of alignment: Competitor analysis can uncover problems such as pricing that is higher than your competitors, new markets you haven't explored, or product development that doesn't align with your core demographics.

• Research into the competition: Organizations must have insight into their competitors' strengths, weaknesses, and movement in the market.

• Sales enablement: Salespeople can use these matrices to respond to potential new customers' questions knowledgeably and identify areas where they have a competitive advantage over their rivals and areas where they may be at a disadvantage. This information can shape sales and marketing promotions to ensure the right messages reach customers’ ears.

• Identification of internal weaknesses and threats: Frequently updated competitive matrices allow stakeholders to identify weaknesses within their own organization, so change can be made before they become liabilities.

Everyone within a RevOps (revenue operations) team can benefit from an up-to-date competitive matrix as they strategize. Businesses also see long-term benefits by moving strategically to capitalize on advantages and to shrink or resolve disadvantages with their products or services.

Many competitor matrix types are helpful for different strategic initiatives, teams, or projects, such as the popular SWOT analysis. Each of these common options can facilitate business planning.

SWOT analysis

When you picture a competitive matrix, a SWOT analysis may be the first thing that comes to mind. This distinctive, two by two grid organizes insights into a specific competitor into four key areas: strengths, weaknesses, opportunities, and threats (SWOT). 

In the 'strengths' portion of the grid, users will identify positive attributes of the competitor that makes them successful, such as an established brand identity or a global supply chain. The next section, weaknesses, should list disadvantages such as low customer service reputations or recent scandals. In the lower half of the grid, you can write out opportunities, such as new products they're releasing, and threats, such as competitors with the same strengths, services, and product offerings.

This overview allows people within your organization to quickly gain insight into a competitor and identify how to make your organization succeed.

Each competitor should have their own SWOT analysis so you have a database of up-to-date insights. As you or your team begins to develop a SWOT analysis, use these questions to organize your thinking for each grid on the matrix.

• Strength questions: What do customers love best about this company? What are its achievements? What are their top resources or capabilities? What is the company's unique selling proposition (USP)?

• Weakness questions: What do customers like least about this company? Where is the company slowest? What resources does it lack?

• Opportunity questions: Is the market changing in a way that aligns with the company? Which of its clients or target markets is growing?

• Threat questions: What obstacles does the company face? What new challenges is it not addressing?

For even more insight, create a SWOT analysis matrix for your organization. Then you can identify where you stand in the market compared to other organizations and pivot initiatives to focus on your strengths and competitors' weaknesses.

SWOT analysis template

Competitive advantage matrix

A competitive advantage matrix assesses an organization's competitive advantage—or ability to achieve or hold a superior business position compared to other organizations in the market. Users can gauge a company's position along the x-axis and y-axis. The position along the x-axis measures the size of the company's potential advantage. In contrast, the y-axis measures the number of opportunities the organization has to differentiate or hold the advantage.

Depending on the size and opportunity volume of the competitive advantage, an organization will fall into one of these four categories (moving around the grid in a clockwise fashion):

• Specialized: The company has a high opportunity volume and a big advantage.

• Volume: There are just a few opportunities, but all of them are large.

• Stalemate: The company has little to no advantage, and the advantages only have small potential.

• Fragmented: There are many opportunities, but all are small. 

For critical insights, organizations should use a competitive advantage matrix to plot the position of all their competitors and themselves to identify everyone's relative position in the market.

Competitive profile matrix (CPM)

A CPM is more complex and quantitatively in-depth than other matrices. This tool enables organizations to assess their strengths and compare them with competitors in the market. It achieves this by assigning a numerical weight to key success factors and scoring those factors for each organization.

For example, the key success factors of your organization may be pricing, established brand identity, customer service, and capital or funding; these may be weighted evenly or have different weights adding up to 1.00. Each company in the matrix will receive a score and weighted score for each attribute and a total weighted score.

This matrix cleanly delineates where organizations are successful and how they compare along critical factors.

Sales matrix

A sales matrix can be used as an internal measuring tool for measuring competitors. It assesses prospects and potential sales opportunities, so sales teams can prioritize outreach properly. This grid can be two by two, three by three, or even five by five. The x-axis measures the prospective customer’s interest, and the y-axis measures whether they are a good fit, i.e., if they align with a buyer persona.

For example, extremely interested prospects who are a good fit for a product should be contacted immediately. In contrast, extremely uninterested prospects who are a bad fit shouldn't be contacted. Well-aligned clients who are interested and could be a good fit but are in the middle of a contract cycle, however, should be contacted later.

Sales teams typically use this tool for internal operations. However, ambitious organizations can also create similar matrices for their competitors. This can help identify prospects that are not likely to be approached by competitors.

Product feature and benefit matrix

Product matrices gauge how well a product's features and benefits align with a prospect's (or a hypothetical prospect's) needs. Organizations can utilize a grid structure to evaluate features in consideration of customer needs. The grid can help identify key differentiators that are highly beneficial and key liabilities that pose significant drawbacks. Additionally, it can reveal irrelevant features that customers do not care about. Lastly, the grid can highlight features that customers do not care about but that the organization has overvalued.

Just like a sales matrix, organizations can also create a matrix that outlines the features and benefits of each competitor's product. This provides further insight and understanding of the competition.

Organizations can create a competitive matrix on paper or through a digital program, such as a spreadsheet creator. Many sales enablement and key account management platforms include templates for popular competitive matrices that manage the formatting and may include prompts to help guide thinking.

Follow these basic steps to create a competitive matrix:

1. Decide which matrix you want to create and which organization it will focus on—your own, a competitor, or multiple organizations at once.

2. Research the organization to uncover its USP, reputation, product features, pricing, marketing strategies, customer service, distribution channels, company announcements, etc.

3. Fill out the different fields of the competitive matrix.

4. Repeat steps two and three until all relevant organizations have been covered. SWOT analyses, sales matrices, and product matrices should cover one organization at a time. In contrast, competitive analysis and competitive profile matrices should hold details of multiple organizations to aid benchmarking.

5. Regularly update the matrices monthly or quarterly to keep the details current and accurate.

Competitor analysis templates

Investing time into the development of competitive matrices offers businesses unique benefits, including:

• Training new sales reps on the details of competitors

• Creating a solid foundation for competitive business strategies

• Developing a robust library of knowledge about competitors, competitors' customers, and different markets within your industry

Make developing and updating competitive matrices an ongoing responsibility for sales enablement teams, product developers, and other strategic business teams within your organization.