Hi there,

Old and new competitors is a horrible way to break it down! (sorry)

What does this split actually get you/help you organize?

Rather, your main objective here it to figure out what we as a company are doing wrong.

When you think about it, "wrong" can be an absolute/internal thing or it can be a relative/comparative thing.

As such, a reasonable bucketing is:

Company

• Have we seen rising costs?
  • FC? VC?
  • Split by store
  • Split by product
  • Split by geography
  • ^i.e. some stores/products/geographies doing well and others not or universal?
• Have we seen falling revenues?
  • Absolute revenues? Margins?
  • Have we lowered our price?
  • Are we selling fewer items?
  • Split by store
  • Split by product
  • Split by geography
  • ^i.e. some stores/products/geographies doing well and others not or universal?

Competition

• Is all of our competition doing well or just a few?
• If all, why?
• If a few, what makes them different?
• If doing well for x, y, z reasons, what are we not doing?
• ^benchmark benchmark benchmark

This is a rough overview. It is not exhaustive nor is it tailored. The independent context, objective, industry, and my clarifying questions completely change what I write in these buckets and how I talk about it, but I hope you get the point :)

Hi,

I have seen numerous candidates develope BS frameworks on this. And here is why:

45% of candidates develop quantitative structures and fail. This is because these structures do not help to isolate a problem when it affects both number of clients and their spending simultaneously.

Another 45% of candidates will use Cheng structures like Clients, Company, Competitors. It does not help to isolate the problem again because the problem affects all drivers simultaneously. Your clients changed their preferences, your company has not reacted on this and your competitors have reacted.

Now what do the winning 10% of candidates do?

1. Understand, that if you lose market share then clients think that your competitor is better at something
2. Understand, that the only way to find out why clients think that competitors are better is to compare your company vs competitors
3. Understand, that you need to be MECE to find the problem and the best way to be MECE in this case is to compare your company’s client journey vs competitor’s client journey

That’s it. Simple and clear.

Best,

Anton

Hi!

This is a nice example why you have to always first align on the definition of your focus metric. You can not just assume something!

"Market Share" is not universally defined. The most common definition is probably "Company Revenue divided by Market Revenue". But the definition differs by industry. Sometimes it is not about revenue, but about number of customers. Or about volume. Or something completely crazy, like balance sheet size (this is the case in Banking!). So before you start with anything, you have to define your focus metric.

And even if it is Revenue - decline in market share does NOT mean that revenue is decreasing! It means that the numerator (Revenue) becomes smaller RELATIVE to the denominator (Market Size). So you can also lose market share with growing revenue - if the market grows faster.

So Step 1 is a numerical analysis: codify the definition, then break down the definition into its numerical drivers, isolate where the problem comes from. This gives you the answer to WHAT the problem is, but not yet WHY the problem exists.

This is analyzed in a second step, which is a qualitative analysis, where you ask qualitative questions exclusively focused on the isolated problem driver to understand, what its underlying reasons are.

Hope this helps!

Cheers, Sidi

Hello!

To add on top what has been shared already, I would break it down into:

• Clients: and see the evolution on who they are, the value proposition they are looking for, etc.
• Competitors: how they have evolved, new value proposition they are offering
• Ourselves: did anything change inside, regarding our product? this can encompass also pricing, services, etc.

Hope it helps!

Cheers,

Clara