Gaining the Upper Hand: Competitor Analysis Case Study

Applying competitor analysis in practice: a walkthrough illustrating methods for gaining strategic insights and market advantage for your business, based on a freelancing case.

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This post is part 2 of a series showcasing my freelance journey as a case study in applying strategy and innovation methods. Read part 1 here.

In the fast-changing world of business, especially when launching a new venture or business model, understanding the competitive landscape is crucial for finding your niche and becoming successful. My transition to freelancing served as a practical case study, applying my innovation and strategy expertise to de-risk the move and secure my position in the market.

By using freelancing as an example, this exploration aims to show how a blend of creativity and analytical rigor can create insights into competitive positioning. We dive into the market, uncovering hidden dynamics and identifying key value propositions and capabilities that may differentiate us.

Methods used.

In this case study, we dive into the freelancing market where competition takes place at an individual level, rather than the organizational level. Therefore, instead of scraping company websites and databases, I analyzed a random sample of anonymized LinkedIn profiles of 77 ‘innovation freelancers’ working in the Dutch market. Using Python’s data science stack, I ran 12 analyses to explore three key competitive areas: value propositions, capabilities, and market positioning. In this piece, I share a selection of five analyses.

The data visualizations of the 12 analyses

Analysis #1. Profiling competitor value propositions.

In this analysis, I used count vectorization on the ‘headline’ field from LinkedIn profiles. LinkedIn headlines act as digital storefronts, creating a snapshot of a professional’s value proposition. They show key services, products, and skillsets, offering rich insights into competitor positioning and market trends. By analyzing these headlines, we can identify the most common offerings and areas of expertise within our competitive landscape. The resulting bar graph shows the frequency of these key terms, offering a clear view of the market’s current focus.

Key insights.

The dataset shows ‘freelance’ and ‘innovation’ as dominant terms, which can be explained by our search terms and target market’s primary focus. Other frequent terms include ‘Product’, ‘Design’, ‘Strategy’, ‘Venture’, ‘Marketing’, and ‘Digital.’ This distribution not only identifies the skills most advertised but also highlights areas of possible intense competition and potential market gaps. This insight can be great in understanding where our competitors are focusing their efforts and where opportunities for differentiation might lie.

How these insights informed my strategy.

1. Specialized innovation: While ‘innovation’ is a common term in our field, its true value lies in the specific context in which it is applied. Instead of simply using ‘innovation’ into my offerings, I may need to dive deeper to understand the unique elements of innovation that are underrepresented or especially valued in the market.
2. Differentiation beyond innovation: I need to identify and leverage less common but highly valuable skills or services that could set me apart from the competition. This involves finding a unique intersection of market need and my own strengths and capabilities.

Applying this to launching your new business (model).

For entrepreneurs and innovators, analysing the offered value propositions in a market is powerful. It offers insights into leading market trends and competitive strategies, crucial for shaping a new business model.

1. Market informed strategy: By understanding the most frequently advertised products and services, new ventures can align their offerings with market demands.
2. Strategic differentiation: Identifying less saturated but interesting niches or capabilities can allow new businesses to differentiate themselves in a crowded market, creating a unique value proposition that resonates with their target audience.

Analysis #2. Identifying common capability combinations.

In this analysis, I used co-occurrence analysis to examine the ‘Skills’ section of LinkedIn profiles. The goal was to identify clusters of skills that frequently appear together, showing the multi-disciplinary nature of capabilities present in the market. It’s an approach that moves beyond isolated capabilities to understand how different abilities combine to create deep and appealing competitor profiles. I used a Network Graph to visualize the data, in this case effectively showing the interconnections between common skills in the market.

Key insights.

The Network Graph reveals interesting patterns, showing clusters of skills that frequently co-occur. For example, ‘Management’ is tightly interconnected with ‘Strategy’ and ‘Innovation.’ This tells us that these skills don’t exist in a vacuum — they often come in packaged sets that define business capabilities.

How these insights informed my strategy.

• Skill synergy: This insight guides me towards developing and marketing a more rounded, multi-dimensional skill set by focusing on areas that complement and enhance my existing skills. It’s about creating a synergy that strengthens my overall capability.
• Business capabilities understanding: Recognizing that skill clusters are the source for the value I create, this analysis influences my approach to my talent development, partnerships, and business model.

Applying this to launching your new business (model).

This method of analysis is particularly relevant for startups and teams launching new business models. It highlights the importance of considering not just individual business assets but how they interconnect to form strong business capabilities.

• Integrated asset development: For new businesses, this means looking at your key resources, processes and partners and combining these in unique ways to create a synergy. Identifying and nurturing these unique clusters will lead to a more close-knit and capable business.
• Predicting competitors’ moves: Monitoring changes in the composition of a competitor’s capabilities is especially telling. Shifts in resource allocation, process optimization, or alterations in partnerships often signal a change in strategy or the development of future propositions. Such foresight allows you to anticipate market shifts and adapt your strategies proactively.

Analysis #3. Benchmarking for minimum requirements.

This analysis involves the use of Count Vectorization on the ‘schoolDegree’ field from LinkedIn profiles to identify the dominant educational standards within our industry. The goal is to understand how educational qualifications contribute to a professional’s positioning and industry expectations. I used a Bar Graph to illustrate the prevalence and variety of educational degrees amongst competitors, bringing up the educational benchmarks in the sector.

Key insights.

The data highlights a clear trend: possession of a Master’s degree, whether labeled as ‘Master’, ‘MSc’ or ‘Science’, is remarkably present, observed in the majority of profiles examined. This insight suggests that having a Master’s degree is almost a basic requirement in this field. Further, specializations like ‘Business Administration,’ ‘Innovation,’ and ‘Marketing’ are frequently noted, indicating common areas of focus in higher education among professionals.

How these insights informed my strategy.

1. Setting industry standards: The widespread possession of a Master’s degree sets a clear educational benchmark in the industry. Recognizing this, I now know the need to meet this baseline to maintain competitiveness and relevance.
2. Differentiation beyond degrees: My own educational background, a Master’s in Business Administration, is part of a common trend. To differentiate in a competitive environment, I may need to look in other places than my formal education, focusing on unique skills, experiences, or niche specializations that elevate my profile.

Applying this to launching your new business (model).

1. Benchmark awareness: Regardless of the industry, understanding the common industry qualifications is crucial. It helps in setting the standard for what’s expected in terms of minimum qualifications to have a right to play. This benchmark awareness is essential for any business to ensure they meet or exceed industry norms.
2. Beyond conventional qualifications: In an environment where certain qualifications are common, to differentiate you will need to go beyond these norms. This might mean combining various capabilities or trying entirely new things. For new businesses, this is about starting with basic industry standards and then doing something unique to stand out and attract your specific target audience. It could also mean willingly challenge the standards.

Analysis #4. Dissecting sales power through network analysis.

In this analysis, I looked at the the number of LinkedIn connections of freelancers, excluding outliers to avoid skewing the data. The goal was to understand the typical size of a freelancer’s network and its implications in the freelance market. I used a Histogram to display the distribution of LinkedIn connections among competitors, offering a clear view of networking norms within the freelance landscape.

Key insights.

The histogram, adjusted for outliers, indicates a trend towards fewer connections, challenging the notion that a vast network is a standard in freelancing. This insight is particularly significant in a market where networking is a crucial avenue for client acquisition, as I have found in my previous study of the Dutch Freelance market over 16 quarters. The analysis could underscore that the true value in networking lies not in the sheer number of connections, but in the effectiveness and relevance of these connections. It could also underscore that this channel is under-used.

How these insights informed my strategy.

1. Quantity vs. quality: Aligning with my previous finding that personal networks are key for client acquisition, this analysis suggests that while a large network is beneficial for visibility and opportunities, the quality of connections may be more important.
2. Strategic networking approach: The data supports adopting a balanced networking strategy, focusing on expanding reach while maintaining depth in connections, ensuring each connection aligns with professional goals and aspirations.

Applying this to launching your new business (model).

1. Understanding market dynamics: Regardless of the industry, understanding the importance of market interactions can guide strategic decisions.
2. Building impactful relationships: For new businesses, networking should focus on creating meaningful connections that align with business objectives. It’s about strategically engaging with individuals who can offer support, insight, or opportunities relevant to the business.

Analysis #5. Uncovering price drivers in the market.

In this analysis, I used a Scatter Plot with a Linear Regression Line to examine the correlation between years of relevant experience and hourly rates among freelancers. The addition of a linear regression line helps in identifying prevailing trends and patterns between these two continuous variables, providing a clear visual representation of how experience impacts pricing in the freelance market. I collected the data for the Price per Hour (€) axis from sources other than LinkedIn.

Key insights.

The scatter plot reveals a trend that aligns with intuitive expectations: increased experience typically correlates with higher hourly rates. While this may seem obvious, further supporting this trend with data lends credibility and confidence to pricing strategies. This analysis underscores the importance of basing pricing decisions on market trends and data, rather than guesswork or assumptions.

How these insights informed my strategy.

1. Calibrated pricing: My pricing strategy should reflect a balance between experience and the unique value I offer. This insight guides me to set rates that are competitive yet fair, based on my expertise level.
2. Investment in skill development: Recognizing the correlation between relevant experience and rates, investing in upskilling and continuous learning emerges as a strategy with long-term benefits for my rate structure.

Applying this to launching your new business (model).

1. Market-informed pricing: For new businesses, understanding what elements drive pricing in your industry is crucial. This insight can guide the development of a pricing model that reflects the company’s delivered value and market position.
2. Continuous improvement and adaptation: Regularly updating service offerings can justify rate adjustments over time. A business should always be in tune with market rates and evolving industry standards, adjusting its pricing and services accordingly to remain competitive and relevant.

Conclusion: harness competition insights for a strategic edge.

The ending of this analytical journey brings us to an important understanding: in freelancing, as in any business, knowledge is power. The insights gained from this series of analyses are more than just data points; they are the guiding stars in shaping our strategy.

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Whether it’s identifying positioning gaps, recognizing the power of specific capabilities (and clusters), or understanding pricing drivers, each insight paves the way for strategic decisions that can propel your new business forward.

Interested in transforming your business strategy with competitor insights? Don’t hesitate to get in touch :).

I help you build your next business (model) — @Daan de Geus