Competitive Matrix Template

This template helps you identify four different categories of competitors for any market or industry: Direct, Indirect, Emerging and Legacy. Use this template to evaluate various competitors, understand their relative positioning in the market, and develop a better sense of overall market dynamics, trends & shifts.

In a hyper-competitive market, consumers are constantly bombarded with choices: Apple or Samsung, Pepsi or Coca-Cola, KFC or McDonalds, and the list goes on and on (quite literally forever).

But here’s the thing – for individual businesses who are vying for the attention of the same target audience, it’s crucial to know the various types of competitors they are up against. Are you competing with a long-time legacy brand like Ralph Lauren or Armani in the world of menswear – or a budding food start-up operating in your local neighborhood? 

Either way, mapping out your competitive landscape helps you formulate more effective business strategies tailored to countering specific kinds of competitor profiles. After all, every kind of competitor offers a different level of competition. By understanding these different levels, you can put together better sales, marketing, and distribution strategies to outperform them. 

Visualizing Your Competitors

The basic idea of using a competitive matrix, preferably during the early stages of your market research, is quite simple – to identify your main competitors in the market. As a diagrammatic tool, a matrix with four quadrants is a great way to visualize your competition quickly – without the fuss of going over long lists or complicated tables.

In our template, we help you create a competitive landscape matrix by differentiating between four different kinds of competitors – with each quadrant reserved for a particular type of competitor: Direct, Indirect, Legacy, and Emerging.  Now, let’s explore what each type of competitor profile entails and what that means for your business!

Direct Competitors

These are your most obvious competitors in the market as they essentially offer the same products or services as you and to the same target audience. Think H&M and Zara in the clothing industry, or Netflix and Hulu in the global streaming market.

Direct competition is usually characterized by cut-throat competitive practices like price wars, say when one company sets a low price initially to gain market share quickly or matches a competitor’s lower price to avoid losing customers. 

In this constant race to one-up each other, direct competitors are always monitoring and trying to preempt each other’s moves, launching aggressive marketing campaigns or offering better discounts or loyalty programs than their competitors to steal more market share for their own products. 

Use our Competitive Product Feature Analysis to run a comprehensive comparative analysis of your products against those of your toughest rivals!

Indirect

Now, this is when things get a little more interesting. While your direct competitors are obvious & easy to spot, indirect competitors are a whole different ball game.

Indirect competitors do not offer the same products or services as you & often aren’t in the same industry as you either. Why then should you be thinking about them? Well, the reason is that indirect competitors also end up meeting the same customer needs or desires as you do but by offering a different solution altogether, thus effectively creating a substitute way out for your potential customers. 

Let’s say you live in a rainy city like London and want to find a way to keep yourself dry. You have two options: you can either buy an umbrella or invest in a raincoat. While both of these products do the same job (keeping you dry!), they do so in very different ways. 

As a rule of thumb, indirect businesses do not engage in direct price wars; instead, choosing to focus on shaping consumer perceptions and building their brand loyalty, establishing themselves as viable alternatives.

Here are some examples of indirect competitors  across different sectors & industries:

• Smartphones vs. desktop computers
• McDonald’s vs. Domino’s Pizza
• Online learning platforms (like Udemy) vs. traditional learning institutions (universities)
• Uber vs. public transport 
• Bicycles vs. motorcycles

Emerging

Emerging competitors are new players on the scene who are able to gain a substantial amount of customer traction thanks to their innovative business models.

New or sometimes even unknown in your market, emerging rivals can develop quickly and threaten your position as they can differentiate themselves through unique value propositions, and by placing a greater premium on finding innovative ways to meet customer needs without head-to-head confrontation with established companies.

Even though new market entrants are difficult to spot, you should not overlook them as they are often the first signal of upcoming market shifts. In a highly competitive landscape, early identification of emerging competitors is key if you want to maintain your competitive edge & position in the market.

Legacy

Your legacy competitors have established brands that have been around for a while, and have cemented their position as market leaders or industry pioneers.

Think of the most well-known companies that offer the same product or service as you to the same target customer base. These companies boast a strong market reputation and a loyal customer base.

Legacy brands often compete with other legacy brands, such as Coke and Pepsi, which are brick-and-mortar brands that have been around for as long as we can remember.

Here are some examples of legacy brands across different industries:

Who Is Our Template For?

• Business Owners who want to identify competition and refine their strategies.
• Marketing Teams looking to understand competitors’ strengths and weaknesses for better market positioning.
• Product Development Teams who want to find a way to benchmark their performance against competitors.
• Strategic Planners who want to identify gaps and opportunities in the market.

Why Do You Need Our Template?

• Identifying potential threats and opportunities
• Evaluating competitors’ approaches to solving customer problems
• Gaining insights into how to differentiate and improve offerings
• Guiding decisions for market entry, product development, or strategic pivoting

Wrap Up

To sum up, a competitive matrix template is a simple yet incredibly useful strategic tool if you want to systematically analyze and compare competitors within an industry. By identifying, categorizing, and evaluating various competitors, you are not just able to understand their relative positioning in the market, but also develop a fuller sense of overall market dynamics, trends & shifts.

Our free & editable template is available in .ppt format for offline editing and via Google Slides for cloud-based sharing, editing & collaboration!