This article provides a detailed response to: How to create a positioning map using Excel? For a comprehensive understanding of Market Research, we also include relevant case studies for further reading and links to Market Research best practice resources.
TLDR Create a positioning map in Excel by plotting competitors on a scatter plot using relevant market dimensions to inform Strategy Development and identify differentiation opportunities.
TABLE OF CONTENTS
Overview Customizing Your Positioning Map Applying Insights from Your Positioning Map Best Practices in Market Research Market Research Case Studies Related Questions
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Creating a positioning map in Excel is a strategic tool used extensively in the consulting world for visualizing an organization's market position relative to its competitors. This framework aids in strategy development, allowing executives to identify opportunities for differentiation and better understand the competitive dynamics within their industry. The process involves plotting products, companies, or brands based on two dimensions that are most important to the target market, such as price and quality. The resulting visual representation provides a straightforward way to analyze market trends and strategize accordingly.
To start, gather the necessary data which typically involves market research or internal data analysis. This data might include consumer perceptions, product features, price points, and other relevant metrics. Consulting firms like McKinsey or BCG often use proprietary models and extensive databases to inform these dimensions, but for many organizations, starting with customer surveys and competitor analysis can provide sufficient insight. The key is to select dimensions that are both relevant to the consumer and reflective of the competitive space.
Next, open Excel and input your data. For a basic positioning map, you will need a list of competitor names and the two dimensions you are comparing. This could be a simple table where each row represents a different competitor, and the columns represent the dimensions you're analyzing. It's crucial to ensure accuracy in this step, as the data forms the foundation of your positioning map.
Once your data is ready, select it and navigate to the 'Insert' tab to choose a scatter plot. Excel's scatter plot feature is perfect for creating positioning maps because it allows for the placement of data points based on two variables. After inserting the scatter plot, you will see your data points represented on the chart. This visual representation immediately offers insights into how crowded certain market segments are, where gaps might exist, and potentially underserved areas of the market.
Customizing Your Positioning Map
While Excel provides a basic scatter plot, customizing your chart is crucial for making it a powerful strategic tool. Begin by adding labels to your data points. This can be done by right-clicking on a data point and selecting "Add Data Labels." Then, format these labels to display the competitor names, making each point on the map easily identifiable.
Next, consider the axes of your map. The axes should represent the dimensions you've chosen, such as price on one axis and quality on the other. Adjust the scale of these axes to appropriately reflect the range of your data, ensuring that the map is as informative as possible. This might involve setting a specific minimum and maximum value for each axis, depending on the spread of your data.
Finally, add a title and label the axes of your chart. This not only makes the chart easier to understand at a glance but also ensures that it can be effectively communicated in presentations or strategy documents. Remember, the goal of a positioning map is not just to analyze the current state but to identify strategic moves that will enhance your organization's market position.
Applying Insights from Your Positioning Map
With your positioning map complete, the next step is to analyze the insights it provides. Look for clusters of competitors; these indicate highly competitive segments of the market. Isolated data points might represent niche markets or differentiation opportunities. Consulting leaders often use these insights to advise on Strategic Planning, Digital Transformation, and Innovation efforts.
Consider the strategic implications of your positioning map. Are there underserved segments of the market your organization could target? Does your organization's position on the map align with its intended brand perception? These are critical questions that can guide future strategy development and performance management efforts.
Lastly, it's essential to keep your positioning map updated. Market dynamics shift, new competitors emerge, and consumer preferences change. Regularly revisiting and revising your positioning map ensures that your strategies remain relevant and that your organization continues to meet the evolving needs of the market. In summary, learning how to make a positioning map in Excel is a valuable skill for any executive involved in strategy development and market analysis. By following these steps and leveraging Excel's capabilities, you can create a powerful visual tool that informs strategic decisions and helps maintain a competitive edge in your industry.
Best Practices in Market Research
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Market Research Case Studies
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Strategic Market Intelligence Framework for Chemicals Distributor
Scenario: A mid-sized chemicals distributor is struggling to effectively navigate the competitive landscape and respond to rapid market changes.
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Scenario: The company is a luxury cosmetics brand operating in a highly competitive sector.
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Scenario: The company, a mid-sized electronics firm, specializes in the design and manufacture of consumer wearables.
Market Research Strategy Development for a Global Consumer Goods Company
Scenario: A multinational consumer goods manufacturer is facing challenges in understanding and adapting to the rapidly evolving market trends.
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Scenario: The organization in question operates within the highly competitive niche apparel segment of the ecommerce industry.
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Related Questions
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Source: Executive Q&A: Market Research Questions, Flevy Management Insights, 2024
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