competitor-analysis

Competitor Analysis

It’s possible to identify the key players that overlap with a company’s business model with a competitor analysis. This overlapping can be analyzed in terms of key customers, technologies, distribution, and financial models. When all those elements are analyzed, it is possible to map all the facets of competition for a tech business model to understand better where a business stands in the marketplace and its possible future developments.

Why competition in the business tech world looks slightly different

There are several ways to look at competition. However, in a digital world, the concept itself (for now) has become more fluid. Indeed, when you look at companies like Amazon, Tesla or perhaps Google, where would you start?

True, each of those companies has a main market/industry (Tesla = electric cars, Amazon = e-commerce, Google = search), and yet when we have a closer look at what those companies do we realize there is more to it.

Indeed, as those companies operate at the edge of business and technological innovation, often times they place bets on new markets and industires that if prove to develop, can become whole new industries.

So where do we start?

Understanding competition in the business tech world

business-model-template
A tech business model is made of four main components: value model (value propositions, mission, vision), technological model (R&D management), distribution model (sales and marketing organizational structure), and financial model (revenue modeling, cost structure, profitability and cash generation/management). Those elements coming together can serve as the basis to build a solid tech business model.

In the VTDF framework, I broke down tech companies business models in four main parts:

  • Value.
  • Technology.
  • Distribution
  • And Financial model.

Each of those parts is essential to build a viable long-term tech business model.

Thus, we can leverage on this same model to also analyze competition in the business tech world.

Breaking down competition in the business tech world

When it comes to competition in the business tech world, we’ll analyze it from a few perspectives:

  • Current Customer Overlap: who are the key customers that are currently getting value and sustaining the business?
  • Current Technology Overlap: what is the key technological advantage that sustains the value proposition of the business?
  • Current Distribution Overlap: what is the key distribution channel the company is using to enhance the use of the technology that enhances the value proposition?
  • Current Financial Model Overlap: is the company using equity/capital, debt/financing to grow or perhaps is it bootstrapping?

Once looked at the four components above, we can look at a fifth one:

  • Future Technology Development: what technologies is the company developing that can help develop a whole new market?

Let’s see each of those elements in details.

Current Customer Overlap

Who are the key customers that are currently getting value and sustaining the business?

Current Technology Overlap

What is the key technological advantage that sustains the value proposition of the business?

Current Distribution Overlap

What is the key distribution channel the company is using to enhance the use of the technology that enhances the value proposition?

Current Financial Model Overlap

Is the company using equity/capital, debt/financing to grow or perhaps is it bootstrapping?

Future Technology Development

What technologies is the company developing that can help develop a whole new market?

Case Study: Tesla

tesla-competitors
As an electric automaker and builder of sports cars and now trucks, Tesla’s competitors comprise companies like Ford, Mercedes-Benz, Porsche, Lamborghini, Audi, Rivian Lucid Motors, Toyota, and more. At the same time, Tesla is an electric energy production and storage company (SolarCity); it competes with Sunrun, SunPower, and Vivint Solar. And as an autonomous driving company, it competes with companies like Zoox, Waymo, and Baidu with the self-driving software.

Tesla isn’t just an automaker. Its business model spans across the electric-only car industry (a once blue ocean market that Tesla helped open up).

Tesla is also an electric generation and storage company, with SolarCity’s acquisition, which is an essential element of the Tesla business model‘s future success. It is enabling the ecosystem that will make Tesla sustainable as a company in the long-term.

In addition, Tesla is also investing on autonomous driving player. For that, we’ll have to analyze Tesla from these three perspectives.

Automaking

Within the automaking segment, Tesla has over the years diversified its products‘ lines, to cover different segments of the market. When Tesla entered the market, as a go-to-market strategy it had to enter it (nonetheless Elon Musk’s long-term vision to make the electric car available to the masses) with the Roadster model.

Sport & Performance

The primary models covering this segments are:

  • Roadster: here some of the competitors are Dodge Challenger, Porsche Chiron, and Bugatti
  • Model S: in this segment, Tesla competes with players like Mercedes S-Class, BMW 7 Series, Porsche Panamera, Audi A7 & A8 and more.
Suv

The primary models covering this segments are:

  • Model X: here some of the competitors are BMW X5, Mercedes-Benz GLS-Class, Volvo XC90, Porsche Cayenne.
  • Model Y (compact SUV): in this segment, Tesla competes with Renault Zoe, Nissan LEAF, Volksvagen e-Golf, Audi e-tron and more.
Truck

In this segment, Tesla just launched the Cybertruck:

cybertruck-preorder-tesla

Cybertruck’s competitors comprise Rivian, Ford, Bollinger.

City Car

Tesla has finally its mass-market product, the Model 3. This model competes with models such as BMW Series 2,3,4,5 Mercedes Class C, CLA, CLS, Audi A3, A4, A5, Lexus, ES, GS, and many others.

Energy Generation & Storage

Tesla acquired SolarCity back in 2016, for $2.6 billion, and with that, it competes in the electric production and storage industry with players like SunRun, SunPower, Vivint Sonar, Trinity Solar, and SolarWorld to mention a few.

Autonomous driving

Tesla’s Autopilot is one of the key ingredients of its technology and one of the most interesting future developments for the company. In this segment, Tesla competes with other autonomous driving companies like Zoox (bought by Amazon), Waymo (an Alphabet bet), and Baidu.

Read Also: Tesla Competitors, Amazon Competitors.

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Published by

Gennaro Cuofano

Gennaro is the creator of FourWeekMBA which target is to reach over two million business students, executives, and aspiring entrepreneurs in 2020 alone | He is also Head of Business Development for a high-tech startup, which he helped grow at double-digit rate | Gennaro earned an International MBA with emphasis on Corporate Finance and Business Strategy | Visit The FourWeekMBA BizSchool | Or Get in touch with Gennaro here