How strong is our competition?

When making Marketing Plan one of the activities being carried out is the analysis of competition. How strong is our competition? There are several ways to find this out, and this is perhaps most easily accomplished by tracking revenue and profit of competitors over several years. The following text will show you several Excel charts which should show where is our company and where are competitors on the market.

Competitive analysis will use the example that shows the operating results of fictitious company engaged in production of fruit juice (“Juice” doo). And we’re going to compare it with business results of several other virtual companies (“Fruit One”, “Extra Fruit,” “Berries,” “Organic”). Balance Sheets and Income Statement are publicly available information, so in practice it won’t be difficult to find and use them for competition analysis.

First, let’s make two simple charts. The prime should show revenue growth, and second rise in profits in the last three years. It is necessary to select the columns that contain data on income, and then in the Insert ribbon select the chart type Line. We should have also selected the first column containing the names of companies.

When the chart is shown you need only to choose the option Switch Row / Column to show revenue growth over the years. Furthermore, this procedure should be repeated to analyze profit.

An even better way to analyze revenues and profits is when we can see them in the same place. For this purpose we will use a Scatter chart, and we will be using business results from year 2015. This time should you select the just the last two columns of the earnings and profits (the names of companies that will be added later), and then within Insert ribbon choose a Scatter chart.

After the chart is shown we can beautify it a little bit, and to do that we can format the appearance of axes and the background. Also, it would be nice to add some labels to distinct the companies within a chart. First, we should add labels (Design / Add Chart Element / Add Labels). Then we should select the data series in the chart, right-click, and from the context menu select Format Data Labels option. Furthermore, it is only necessary to indicate that the inscriptions found in the first column match labels within a chart, and then mark the company “Juice” in red. This is achieved by highlighting the point that shows the company’s business and then right-click to open the context menu and select Format Data Point. The color of the marker should be crimson red.

We received a representative chart. Would it be nice to further see profit growth within the same chart? For this purpose we will create a Bubble chart. If you pay attention, the last column in the data table is called “RAST” (GROWTH) and it represents the difference of profits in the last two years of operation. We will use this data „to give width“ to our data points within a Scatter chart by modifying it to Bubble. To change a chart type we should go to Design ribbon and then select Change Chart Type. Bubble chart has two varieties: Bubble and 3D Bubble. We will choose the latter, it looks a lot nicer! In order to get the circles of different diameters, which represent different growths of profits, it is necessary further to activate option Select Data, and to modify the data series so that in the field Series Bubble Size should be added figures from the last column.

As we entered fictitious information we got quite a nice chart. In practice it probably won’t look so nice. All data won’t fit in the chart or it will be too densely packed. This can partially be corrected by replacing the spans of x and y axes.

What we can conclude from here? The company “Fruit One” had the highest revenue, profit and growth of the group and in this particular segment represents a market leader. For the position of the first followers are fighting “Berries” and “Organic”. Although, at first glance, the company “Berries” has better results, “Organic” has significantly more revenues and their position on the markets asks for further investigation. The company “Juice” does not stand so well, but it is positive and also had a solid growth.

As you can see, this is a very useful way to make the most of opportunities Line, Scatter and Bubble charts.