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How to Estimate Market Potential with Fast and Cost-Effective Competitive Landscape Analysis

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Elena Kozlova
This post is in English
How to Estimate Market Potential with Fast and Cost-Effective Competitive Landscape Analysis

Imagine being able to track changes in your market and estimate new market potential faster than anyone else in your industry. 

Imagine being able to adapt to emerging opportunities promptly and reshape the competitive landscape in your niche.

Well, you can - and you don’t even need to buy expensive analytical reports from consultancy firms and market research agencies that often take weeks to deliver.

No wasted time, no squandered resources, and no missed opportunities; only informed decisions for the good of your business, backed up by real data.

Let’s explore the power of having a detailed competitive landscape map in your arsenal when it comes to estimating your market potential: 

What Competitive Landscape Analysis Involves

A full analysis via competitive landscape research will help you do so much more than simply keep a close eye on your competitors’ activities and how they affect the overall growth of your market.

It will allow you to track market changes over time, identify your least and most significant competitors and unearth opportunities to expand into new markets altogether. 

There are two core parameters that can help you here: 

Parameter #1: The online audience of any given company

An estimation of audience size according to its website’s Traffic Volume

Parameter #2: The growth rate of any given company

An estimation of online marketing performance according to its Traffic Growth

These figures can be mapped onto the Growth Quadrant in Market Explorer for up to 30 competitors so you can analyze the landscape for areas that might require more in-depth research.

It is recommended that you narrow this down to your top 10 competitors for greater focus, which can be achieved automatically via Market Explorer or manually via the Custom Market feature if you need to tailor your Growth Quadrant.

Understanding the Quadrants of Your Competitive Landscape

The Growth Quadrant categorizes your competitors into four areas to help you analyze your market potential:

Growth Quadrant - Market Explorer - SEMrush

Leaders: Large Online Audience (Traffic Volume) and High Growth Rate (Traffic Growth)

These players attract significant traffic through effective campaigns on various channels and continue to grow.

They are the ones to watch and, in many cases, emulate when you are defining your own strategy, but remember that a broad reach does not guarantee a high conversion rate. 

Established Players: Large Online Audience and Low Growth Rate

These players have cemented their places in the market with high levels of coverage, but they are not growing at the same rate as the Leaders.

They are worth investigating to find out how they managed to build their audience in the first place, and, of course, why their growth might have slowed down.

Game Changers: Smaller Online Audience and High Growth Rate

These players receive lower levels of traffic, but they are growing at a rate higher than the market average; they often take the form of start-ups with aggressive funding and investment.

They should be analyzed to get an understanding of changing consumer demand in a new market based on whether Traffic Volume and Traffic Growth are increasing or decreasing over time for the players in question.

Niche Players: Smaller Online Audience and Low Growth Rate

These players receive lower levels of traffic and aren’t growing at a significant rate, which can mean they are local businesses, old businesses on their way out or new businesses trying to find their feet (or not, if the selected market isn’t one in which they are active).

This quadrant should be analyzed if competition seems high and Traffic Growth turns some Niche Players into Game Changers over time.

Such movement can indicate that target consumers have a healthy appetite for what's on offer and certain players are taking advantage of it with tailored marketing techniques.

There might, however, still be gaps you can fill if there isn't much overlap between the audiences of the players making these movements. 

For example, your product or service might combine the benefits of two separate competitors appealing to two different audiences, which could present an opportunity to position yourself in between them to win their customers. 

These quadrants should be seen as the basic outline of the competitive landscape map of your chosen market. 

You will notice that they change from country to country according to consumer demand and behaviors, as with this example of the United States’ top 12 airlines when they are mapped in Canada and Mexico, too: 

How to Estimate Market Potential with Fast and Cost-Effective Competitive Landscape Analysis. Image 1

Let’s take a deeper look at the Growth Quadrant to understand how to do competitive landscape analysis and how to assess market potential.

Map out your competition

Benchmark your rivals' positions and growth rate

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How to Estimate Market Potential

It’s one thing to study a static map of your competitive landscape to see where your closest competition sits. 

It’s another to map your competition’s movements over time to properly identify opportunities, estimate potential and set benchmarks accordingly.

The key to defining market potential is to understand how you and your competitors might move from one quadrant to another according to the unique characteristics of your industry.

We recommend tackling one quadrant at a time to decipher competitor strategies and pinpoint where you need to dig a little deeper.

Leaders: Large Online Audience + High Growth Rate

Companies in the Leaders quadrant are the ones you will want to investigate first.

Find out where their high levels of traffic are coming from and which tactics they are using to reach and engage with their customers.

Check to see if they have grown significantly and evolved from an Established Player to a Leader in the past 6 months.

This can be a good indicator of a tactical shift in response to any threats posed by other players in a competitive market, such as Game Changers. 

If this is the case, investigate their individual strategies by using features such as Brand Monitoring, which will show you where they have been mentioned on the likes of forums or third-party websites. 

Look at Traffic Analytics to hone in on where their customers are coming from so you can identify any areas that might have recently been successful for them.

You can go a step further if there are two or more companies in the Leaders quadrant by comparing their Audience Overlap. 

You might spot an untapped audience to target with your own product or service if you are a Niche Player or a Game Changer.

The example below highlights the apartment rental services market.

You’ll see that the Leaders, zumper.com and apartmentguide.com, are operating at similar levels. 

When you dig into their strategic approaches, though, it’s clear there are differences that create an Audience Overlap of only 11.4%, which means there are channels that neither player has yet mastered. 

It also means that brand loyalty could be a factor for the 88.6% of customers who don’t consider competitors, but either way, this could be an invitation for a Game Changer to seize the opportunity:

How to Estimate Market Potential with Fast and Cost-Effective Competitive Landscape Analysis. Image 2

In your own quadrant, you might investigate media placements, social campaigns and backlinks to see how your competitors became Leaders. 

Alternatively, you might look at Leaders who have fallen into the Established Players quadrant in the past 6 months, as this might indicate that their marketing spend has dropped or they have maximized audience potential on a particular channel.

A high number of successful players in a particular market might indicate one of two things:

  1. A high demand: The trick here would be to identify the places where consumer demand hasn't been satisfied yet and devise a strategy to meet it;
  2. Or an oversaturated market: Here, you would need to recognize that there may be too many players with large shares of the market for you to mount a serious challenge.

If you are confident that your product or service has a USP that warrants the status of Leader or Established Player, use the Growth Quadrant with a Custom Market to start creating your go-to-market strategy.

Established Players: Large Online Audience + Low Growth Rate

Those found in the Established Players quadrant will provide your best insight into the maturity of a market. 

You will see the companies that have developed large shares of voice over time and, if you investigate further, which tactics might have worked for competitors along the way. 

The fact that Established Players have low growth rates indicates that they have a fairly steady flow of traffic, but they aren’t surging from month to month. 

It can be a comfortable position, but it can also be quite a vulnerable one if there are Game Changers primed to pounce on portions of the audience that might have been overlooked.

If you find yourself in the Established Players quadrant, check on the investment statuses of any up-and-comers that might challenge your position. 

This could reveal a need for you to increase your budget in certain areas to hold them off and keep your customers.

You should check the statuses of the Leaders, too, in case a similar budget increase might allow you to gain ground and win some of their customers. This appears to have been the case for both levi.com and abercrombie.com in the example below. 

Both companies tactically leveraged their statuses as Established Players to catch gapfactory.com in the Leaders quadrant over a 6-month period: 

Levi Gap Established Players Growth Quadrant - SEMrush

If you find your competitors in the Established Players quadrant, research their traffic sources to understand how they got there.

Find out where their website visits are coming from and change the timeframe of your search to reveal any peaks and troughs.

If they get a significant amount of Direct traffic, they are relying heavily on the strength of their brand, and may have scaled back on awareness-driven marketing as a result. 

Most Established Players have larger budgets than others and will retain their position for some time, unless consumer demand decreases or competition increases. 

A fall in demand can turn them into Niche Players if they don’t adapt, whilst an increase in the number of Game Changers can inspire action. 

PayPal is an example of a company that has dominated its space, but its position came under threat from a range of Niche Players and Game Changers:

PayPal Game Changers Growth Quadrant - SEMrush

If we click into PayPal’s Traffic Sources Overview, we can see that it boosted its marketing efforts in August 2019 and saw increases in traffic across the board:

How to Estimate Market Potential with Fast and Cost-Effective Competitive Landscape Analysis. Image 5

This activity evidently tailed off in the new year, but it helped strengthen the company’s position in the market by elevating it to the Leaders quadrant. 

If your quadrant is dominated by Established Players and Leaders and they have remained unmoved for a while, it may prove difficult to break into if you don’t have a significant budget behind you. 

You might instead consider benchmarking yourself against competitors with similar but only slightly higher levels of traffic and growth, which can often be found in the Niche Players and Game Changers quadrants in more mature markets.

This is where it can really help to build your own Custom Market.

Game Changers: Low Online Visibility + High Growth Rate

Game Changers are often extremely active with aggressive marketing strategies because they need to prove their worth as relative newcomers to well-established markets.

By working out what they have been doing well, though, you will be able to get an idea of the demand for such products or services in your chosen market.

Take the market of project management platforms as an example. 

The majority of the competitors of wrike.com are Niche Players and Game Changers, according to the Growth Quadrant below. 

This is still the case when the focus is narrowed to the top 20 and even the top 10 players. 

When we switch the timeframe from 1 year to 6 months, we can see that some players grew quicker than others to firmly establish themselves as Game Changers:

How to Estimate Market Potential with Fast and Cost-Effective Competitive Landscape Analysis. Image 6

If you find that you are a Game Changer in your competitive landscape, your first port of call should be to unpick the traffic generation strategies of the market Leaders. 

Find out which channels they have mastered and which channels they have neglected by looking at their Traffic Sources and Social Media Distribution Strategies.

There may be an opportunity to tap into an overlooked audience or, of course, one that hasn’t been particularly interested in their product or service offering. 

The four standout players in wrike.com’s market, for instance, rely heavily on brand with high levels of Direct traffic, but they do not invest so much in social media or paid advertising:

Project Management platforms Traffic Generation - SEMrush

Further analysis via the likes of Advertising Research and the Social Media Tracker might reveal that wrike.com has a great opportunity to invest in paid and social to become a Leader or an Established Player:

Project Management platforms Traffic Sources - SEMrush

There are two types of companies you will likely find in the Game Changers quadrant: 

  1. Companies that have made their names elsewhere and have decided to launch in your market, and;

  2. Companies that are new to the market, but have significant financial backing from investors or parent companies. 

If their levels of investment are sustainable and consumers are engaged by their offerings, they might evolve into market Leaders. 

If their aggressive strategies weaken and consumers lose interest, they might devolve into Niche Players.

A higher number of Game Changers in a Growth Quadrant can indicate that there is plenty of untapped potential in the market, especially if there is visible growth over time, so it can be a good opportunity to capitalize on growing consumer demand. 

Niche Players: Low Online Visibility + Low Growth Rate

The lower-left section of the Growth Quadrant can contain companies that have either recently launched in the region or have actually lost an audience that was once theirs.

Analyzing both types in the Niche Players quadrant can be enlightening; the activities of the former can reveal the early stages of an aggressive growth strategy, whilst those of the latter can depict a failure to adapt to a changing market. 

Competitive analysis of this quadrant can help you set the benchmarks you need to hit to move into the Game Changers quadrant if you are a newcomer.

A look at the fashion e-commerce landscape, for example, reveals some interesting tactics that turned some Niche Players into Game Changers.

Watch what happens to modaoperandi.com and ssense.com when the range is switched from 1 year to 6 months here:

Fashion e-commerce Growth Quadrant - SEMrush

When traffic generation strategies are compared, it is clear on the one hand that the market Leader, zaful.com, is more reliant on Paid and Facebook than its rivals, which would suggest heavy investment in Facebook ads.

On the other hand, ssense.com focuses more on Search and Twitter and modaoperandi.com turns its attention to visual platforms like Pinterest:

Fashion e-commerce Traffic Generation - SEMrush

Comparative performance is obviously largely dependent on budget, but modaoperandi.com's shortfall in traffic here might indicate that the demand in this market is on Facebook and Twitter and not necessarily on Pinterest.

For deeper research, you can also track mentions of any particular taglines, brand names or product trademarks to get a better idea of the content marketing and PR potential within a new market. You might also conduct a Backlink Analysis to find out which sites are giving them links. 

Analyze individual traffic sources in the Competitive Research Toolkit to find out what the market Leaders are doing well and what the Niche Players might be falling short on so you can start a thorough gap analysis.

Niche Players can give a lot away when you need to work out how to find the market potential of a product or service. 

If competition is high, consumer demand is likely to be high, so it could be a market worth tackling as a newcomer if nobody has yet found a unique voice.

If growth rates are slow and traffic is even in decline for some players, it may be a sign that the consumer demand simply does not exist. 

For a more thorough competitive market analysis, look at the all-time movements of key players in the niche to understand how long it took Leaders to reach that quadrant.

Estimate how much they spent and created to achieve it and compare it to the budget and resources you have available for tackling the landscape as it stands.

The Dangers of Not Analyzing the Competitive Landscape

If you neglect the competitive landscape analysis required to successfully launch into a new market, the damage to everything from average transaction value to stock market value will be all too obvious before long. 

You can avoid these dangers by assessing the risks, threats, and opportunities with the help of the Growth Quadrant and Custom Market research features included with the Competitive Intelligence (CI) Add-On at SEMrush.

Estimate any market potential

Glean insights from competitive landscape analysis

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Elena Kozlova
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Getting here is not easy at all!

Online researcher, offline traveler. Passionate writer and story listener.
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