Research methods
Competitive landscape: how to map one for a market or a deal
How to map a competitive landscape: set the market boundary by what buyers would switch to, list every player, group them, and check the map with people in the industry.
A competitive landscape is a map of every business a buyer in a market could reasonably choose, grouped by how they compete, with a note on who is gaining and who could enter. You build one in five steps: draw the market boundary by what buyers would switch to, list the players, group them on the two or three dimensions buyers care about, check the map with people in the industry, and write down what it means for your decision.
It differs from a competitor analysis, which studies a few direct rivals in depth. A competitive landscape is wider and shallower. It is what you need when you are choosing a market to enter, writing an investment memo, or deciding whether a company you might buy has room to grow.
A worked example: buying a food distributor
Suppose you are an investor looking at a regional foodservice distributor that delivers groceries, paper goods and cleaning supplies to about 400 independent restaurants in one metro area. The seller says the company "competes with the national distributors." You want to know who it really competes with, whether its position is stable, and what could change it. The company, numbers and findings in this example are hypothetical.
1. Draw the market boundary
The hardest part is deciding what counts as the market. Too broad, and the map is useless ("food"). Too narrow, and you miss the option buyers actually turn to.
U.S. antitrust agencies face the same problem and have written down how they handle it. The 2023 Merger Guidelines' section on market definition says a market has a product dimension and a geographic dimension, and that its outer edge is set by which products buyers find reasonably interchangeable. One tool the agencies use is the hypothetical monopolist test: if one company controlled every product in a candidate group, could it profitably impose a small but significant price increase? The guidelines say the agencies often use 5% for that test. If buyers would switch to something outside the group, the group is too narrow.
You do not need to run a legal analysis, but the question is a good one to borrow for your map: if every supplier in this group raised prices 5%, where would buyers go? In the food distributor example, a restaurant owner might say "to the cash-and-carry warehouse store," which means the warehouse store belongs on the map.
The guidelines also list practical signs of a separate market, such as industry recognition, distinct customers, distinct prices and specialized vendors, and note that people in a business often use "market" loosely to mean something broader. For geography, they name factors such as transportation costs, regulation and local service availability. For a distributor that delivers daily, the delivery radius is the geography.
2. List everyone in it
Build the list from several directions, because each one misses something:
- Buyers. Ask five or six of them what they buy, from whom, and what they used before. This finds the options no industry report lists.
- Industry classification. The Census Bureau's NAICS is the standard federal agencies use to classify businesses, and its keyword search tells you which codes cover your market. The codes help you find government counts and trade associations for that industry. The SBA's competitive analysis guidance also points to NAICS and Census Business Builder as free starting points.
- Public filings. The SEC's EDGAR full-text search covers electronic filings since 2001. Search for a phrase your market uses and see which public companies mention it. In a 10-K, Item 1 describes the business and may cover its competition, and Item 1A lists its main risks.
- Suppliers and trade shows. Manufacturers know every distributor that carries their products. Exhibitor lists show who is trying to sell in the market.
The SBA notes that several industries may be competing to serve the same market. Keep indirect options on the list: in the example, warehouse stores, online restaurant supply retailers and specialty suppliers that sell only produce or only meat.
3. Group the players on what buyers care about
A long list is not a map yet. Pick two or three dimensions that buyers named when they explained their choices, and place each player. A table works as well as a chart and is easier to update.
| Group | Examples in the market | Range carried | How they deliver | Who they serve best |
|---|---|---|---|---|
| National broadline distributors | 2 national companies | Very broad | Scheduled trucks, minimum orders | Chains and larger independents |
| Regional broadline distributors | The target, plus 1 rival | Broad | Scheduled trucks, lower minimums | Independents |
| Specialty distributors | About 6 produce, meat and seafood firms | Narrow, deep | Daily, flexible | Restaurants that care about one category |
| Cash-and-carry and online | 2 warehouse clubs, several websites | Broad but shallow | Buyer picks up, or parcel | Small restaurants and top-up orders |
The dimensions here (range, delivery and customer served) came from hypothetical buyer interviews. Your own dimensions should come from what your buyers say, not from a template.
4. Check the map with people in the industry
A map built from desk research reflects what companies say. Test it with people who see the market from different sides:
- Restaurant owners and kitchen managers: Who do you buy from now? What would make you move volume from one group to another?
- Suppliers' sales reps: Which distributors are gaining shelf space with you, and why?
- Former staff of distributors: How do customers usually leave? Which groups compete hardest for the same restaurants? Ask about general patterns, not their former employer's customers or numbers.
- Adjacent operators: Could a delivery platform or a regional grocery chain start serving restaurants?
During a deal, check with the seller and your advisors before contacting the target's customers or staff, since the deal terms may restrict it. People who buy from or work at competitors or other companies in the market are usually easier to reach. Market research interviews with customers, suppliers and operators and what to do when experts disagree cover running and reconciling these conversations.
5. Write down what the map means
End with a short answer to the question that started the work. For the example:
- Where the target sits: one of two regional broadliners, serving independents with lower order minimums than the nationals.
- Who is gaining: if owners say they are moving produce to specialty firms and top-up orders to warehouse clubs, the target's share of each restaurant's spending may be shrinking even if its customer count is steady. Check this against the target's own sales by category.
- Who could enter: national distributors lowering minimums for independents would squeeze the target directly.
- What to check in diligence: revenue per restaurant over time, category mix, and how many customers also buy from specialty firms.
Date the map and list its sources. Markets change, and an undated map gets reused long after it stops being true.
Your next step
Write one sentence defining the market by product and geography, then ask five buyers where they would go if every option in it got 5% more expensive. Add anything they name to your list before you start grouping.
If you need to talk to buyers or operators you do not know, Instant Expert can find people who match a description you write, such as "owners of independent restaurants in Denver" or "former sales reps at foodservice distributors." You review who it finds, it sends your invitations, and you pay only for calls that get booked. The directory pages for sales professionals in food distribution and operations professionals in food distribution are one place to start.