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Do-It-Yourself Market Research Part I:
Analyzing the Competition
Resource
The Nonprofit Strategy Revolution
Contents
Why Do Research Yourself?
The Competitor Analysis Tool
When is this tool useful?
How will you know you’ve achieved your goals?
How should you use it?
Competitor analysis worksheet
Competitor analysis sample
Next IssueWhere to Learn More
From Becky Andrews, Marketing Manager, Fieldstone Alliance:
Why Do Research Yourself?
THIS TOOLS ISSUE AND THE NEXT focuses on how to do market research. The information is from The Nonprofit Strategy Revolution: Real-Time Strategic Planning in a Rapid-Response World by David La Piana.
One of the main points La Piana makes in his book is that nonprofits need to be more strategic in their thinking on a daily basis—not just during periodic planning cycles.
"The market changes quickly," says David "and our ability to predict the future is poor. In the dynamic nonprofit environment, developing and honing market awareness is the best way to support good strategic decision making."
Market awareness is knowing who else is in the market, their strengths relative to yours, and the state of the market itself. This is where "do-it-yourself" market research comes in.
La Piana asserts that outsourcing market research (also known as the environmental scan) does not help the organization learn how to conduct its own on-the-ground market research—an important element in building its internal capacity to think and act strategically on an ongoing basis.
So, how can you keep tabs on the market? This issue gives you the Competitor Analysis Tool and next issue, we'll give you a tool for tracking trends.
The Competitor Analysis Tool
La Piana's Competitor Analysis Tool helps you compare your nonprofit to other organizations in your market competing for the same resources. The comparison helps you identify your nonprofit’s strengths and those of competitors. It also reveals areas where your nonprofit may want or need to strengthen its organizational capacity. This comparison helps clarify your nonprofit’s competitive advantage.
When is this tool useful?
Competitor analysis is useful when your nonprofit...
- Needs to develop an understanding of the external environment and its "market position"
- Wants to determine whether to expand to new markets (geographic, programmatic, and/or customers)
- Is considering partnering with another organization
- Is in a very competitive and rapidly changing environment
How will you know you’ve achieved your goals?
Indicators and measures of outcomes:
- Better understanding of where the organization is positioned and a stronger foundation for development of strategy
- Improved decision making
- Greater awareness of the market; more proactive decision making
The completed Competitive Analysis Worksheet should be reviewed and updated periodically, such as quarterly, or as competitors enter and exit the market or change their strategies.
How should you use it?
The Competitor Analysis Tool focuses on the nonprofit’s strongest direct andsubstitutable competitors, and consists of two main components: research and discussion or analysis.
The research phase includes completing the Competitor Analysis Worksheet for your own nonprofit and its top three competitors. This phase may be as simple as asking staff and board members to share any knowledge they have of the competition. Or it may be more involved, encompassing online research or primary research (surveys, interviews, or focus groups).
A good first step is to ask board and staff members to complete the tool separately, drawing on their own knowledge, and then have them meet to discuss their findings. The tool is designed to help nonprofits consider their competition from the standpoint of the resources they compete for: customers, media publicity, human resources, and funding. It encourages organizations to consider their competitors’ strengths, and thus helps avoid the natural tendency to dismiss competitors by focusing on their weaknesses.
When La Piana and Associates consultants lead this discussion in their Real-Time Strategic Planning sessions, they often ask participants, “What do you admire about each competitor?” The far-right column of the worksheet is used to summarize the comparison, highlighting your nonprofit’s strengths and areas needing improvement.
Following is a blank worksheet as well as an example so you can get started analyzing your competitors.
[download worksheet - PDF 967K]
| Complete this table for your top three competitors and also for your nonprofit. Think about the competitor’s strengths and weaknesses in each category. How strong a competitor is this? How does your nonprofit compare with its competitors in each area? Is it stronger than others, or not as strong? | |||||
| Resource: | Your Nonprofit What makes your nonprofit strong in this area? |
Competitor A What makes this competitor strong in this area? |
Competitor B What makes this competitor strong in this area? |
Competitor C What makes this competitor strong in this area? |
How does your organization compare? |
| Customers (such as number of customers, customer satisfaction, customer retention) |
|||||
| Media attention/publicity | |||||
Human resources: Staff Board Volunteers |
|||||
| Funding: | |||||
| Programs or services (type, quality, number of services provided) |
|||||
| Mission–related impact | |||||
| Comments | |||||
Competitor analysis sample
Next Issue
In the next issue of Tools we'll continue with "do-it-yourself market research" by giving you a tool for analyzing trends. This tool helps you to identify and analyze trends, and determine their impact on your nonprofit.
Where to Learn More
Here are just a few places that can be helpful for doing market research. Please see our annotated list of links for more.
The Brookings Institution
www.brook.edu
The Brookings Institution, one of Washington's oldest think tanks, is an independent, nonpartisan organization devoted to research, analysis, and public education with an emphasis on economics, foreign policy, governance, and metropolitan policy.
Diversity Data
www.diversitydata.org
Provides metropolitan-area level data regarding a number of indicators of diversity, opportunity, quality of life and health for various racial and ethnic population groups.
Fieldstone Alliance
More about The Nonprofit Strategy Revolution:
View the list of all the tools in the book at:
http://www.nonprofitstrategyrevolution.com/cd-rom.phpRead the first chapter at:
www.NonprofitStrategyRevolution.org
Free articles:
"Organization Assessment: Stepping Back...Taking Stock"
"Real-Time Strategic Planning in a Rapid-Response World"
"Six Generational Trends that Will Affect Your Nonprofit"
GuideStar
www.guidestar.org
A searchable database of more than 700,000 U.S. nonprofit organizations. If your nonprofit isn't listed, it should be.
National Center for Charitable Statistics (NCCS)
http://nccsdataweb.urban.org
This is a program of the Urban Institute. It's the national clearinghouse of data on the nonprofit sector in the United States. If you want to know how many organizations there are in the U.S. or your state, or want a quick answer about the nonprofit sector, check out this site.
All the Best,
Becky Andrews
Fieldstone Alliance
September 24, 2008
Copyright Fieldstone Alliance. For reprint permission, click here