Competitor Analysis: Guidance and tools to win more public sector tenders

“If you want to consistently win tenders, be at the forefront of your industry and lead in best practice, you need to understand what you are up against!” - Dave Thornton, Managing Director, Thornton & Lowe

Competitor analysis is important for all businesses. However, for those involved in competitive tendering, competitor analysis and reporting is essential. If your business bids for the public sector contracts now and does not research and analyse competitors to inform its bid writing strategy, then this article will help your improve your bid success rates by using market intelligence which is often publicly available in the UK.

If you are looking to outsource your competitor analysis contact Thornton & Lowe today to discuss your market, sector and ambitions. If you are also looking to further improve your bids quality by outsourcing, then see our article on The Value of Professional Bid Writing Consultancy.

With thorough and continual market research and competitive analysis, companies can anticipate the moves of their competitors, which contracts they are likely to be bidding for and let it inform your bid no bid decisions and win themes for a specific tender opportunity. This process not only aids in navigating the complexities of public procurement but also provides intelligence for your marketing, sales and business development teams. Creating an effective Bid Plan is the key.

This article will navigate through the principles of conducting competitor analysis, from identifying differentiators and constructing a competitor analysis example to leveraging analytical tools for a competitive advantage. It will highlight the importance of analysing competition within the context of public procurement, outlining strategies to monitor and evaluate competitor marketing tactics and sales approaches. Furthermore, it will offer insight on using market research to discern direct and indirect competitors, ultimately guiding businesses to refine their strategies for winning more public sector tenders. Or if you currently focus on the private sector and are starting to consider public sector or government tenders as a new route for business growth and stability you should read An Introduction to Government Tenders to give you context and a starting point.

Defining Competitor Analysis

Competitor analysis is a structured approach aimed at gathering and analysing critical information about rivals in the market. This strategic method is essential for businesses, especially those competing for public sector tenders, as it illuminates the competitive landscape and aids in developing robust strategies to outperform rivals or at least increase your bid win rates and quality tender scores. By understanding the intricacies of competitor analysis, small and medium enterprises (SMEs) can significantly enhance their chances of winning bids and securing contracts within the public sector.

At its core, competitor analysis seeks to provide a comprehensive understanding of competitors' products, sales strategies, and marketing approaches. This involves an in-depth investigation into competitors' operations, including their likely solutions for contracts, personnel qualifications, past performance, and overall capabilities in the tendering arena. Such knowledge is indispensable for crafting a compelling and profitable solution that stands out from the competition. If you have already a high performing bid writing team but want to support them to achieve more, check out the Ultimate Guide to Selling into the Public Sector.

A key aspect of competitor analysis is the emphasis on understanding the customer's needs and tailoring proposals accordingly. This involves a detailed analysis of the tender market, identifying direct and indirect competitors, assessing their strengths and weaknesses, and understanding the types of tenders they are winning. By focusing on the benefits and outcomes that the customer will receive from your solution, rather than just the features and specifications, businesses can demonstrate a clear and convincing value proposition. For further ways to improve the quality of your bid writing see 10 Ways to Improve Tender Response Scores or see our Bid Writing Ultimate Guide!

The use of data and evidence plays a crucial role in competitor analysis. Supporting claims and arguments with facts, figures, statistics, testimonials, case studies, awards, and certifications can greatly enhance the credibility of your proposal. Additionally, continuously reviewing and improving your proposal based on insights gained from competitor and market analysis ensures that your business remains competitive and customer-centric.

By having a process to research competitors and understanding their strategies, SMEs can design a strategy not just to compete, but to win more public sector tenders. This involves not only identifying who the competitors are but also analysing their sales tactics, marketing strategies, and understanding their performance in past tenders. With this knowledge, businesses can inform their bid strategy, increase their return on investment, and ultimately, secure a competitive edge in the tendering process. Take a look at Essential Questions to Ask Before Writing a Tender Response, which includes the question ‘can we provide a unique solution?’. To answer this, you need to understand the market you operate within and how you compare to others in the sector.

Types of Competitors

In the complex landscape of public sector tendering, understanding the types of competitors you're up against can significantly inform and refine your strategy. This understanding is crucial for SMEs aiming to increase their tender win rates by tailoring their approach to counteract the specific challenges posed by different competitor categories.

Competitors range from large organisations with market share, the incumbent supplier, to local rivals. Comparing and contrasting the opportunity, it’s specific requirements and the evaluation criteria, against what you know about likely competitors for the opportunity can totally change your ‘normal/ standard’ approach to bid writing. If evidence of local and past delivery is a key driver – who is best placed to win it? If reassurance, continuity and a low risk option is clearly required from the buyer – who is best placed to win it? How is the incumbent performing? Can you typically compete with them? If you struggle to compete with a larger competitor – what contract values do they not bid below? When bidding against larger competitors by completing a competitor analysis and reviewing their wider contracts, could you highlight the importance of your smaller size and an quick, longstanding and accountable team? Think David vs Goliath! Does the tender structure or broader market research provide any insight into angles you can use?

Understanding the spectrum of competitors within the public sector tendering process is essential for SMEs. By identifying and categorising potential rivals, businesses can tailor their bid submissions to highlight their strengths and mitigate the influence of these competitors.

Key Components of Competitor Analysis

Identifying and understanding competitors in the public sector tendering process is a multi-faceted task that involves a combination of market research, strategic analysis, and direct investigation. To effectively conduct a competitor analysis, businesses must employ a variety of techniques and resources and invest an appropriate level of capacity. If you are largely happy with your current win rates you may want to try a few competitor analysis quick wins, however, for those who have high growth ambitions you may choose to use more or all of the areas noted below.

Firstly, and as a competitor analysis ‘quick win’, research any incumbent suppliers who are already delivering the service. Incumbent suppliers, as long as they are performing, stand a higher chance of winning the re-tender. These really can be your main competition when tendering for a public sector contract or framework. As a result of the Procurement Act 2023 there will be increased levels of public sector procurement transparency as well as other benefits to SMEs looking to win contracts in the sector.

You can find out who is delivering a contract now on a live tender by:

• Asking the buyer via the portal (they may decline but if you can’t find the answer, you can always ask, which can further inform your competitor analysis and understanding).
• Checking the tender pack (or TUPE pack for details).
• Buyer Specific Contracts Register, such as Network Rail’s contracts register and procurement pipeline.
• Spend Data, many Councils such as Suffolk County Council publish their expenditure exceeding £250.

Checking contract award notices via Find a Tender or Contracts Finder. Contract award notices will often not only provide you who was awarded the last relevant contract, but the value of the bid, contact details and contract duration in order for you to plan your business development around the re-tender and procurement preparation stages. Tender Pipeline is Thornton & Lowe’s free tender software, which allows you to report on specific competitors and view their wins in list form, as well as setting up alerts for new wins based on your identified ‘winning bidders’ (competitors). If you are struggling to find local council tenders and awards for example, see our article which describes the strategies you can use to both find a secure those tenders.

Beyond finding out who they are there are often available board reports, minutes and performance analysis (based around the service they are delivering rather than naming them specifically in most cases), which can help you understand the extent to which the public sector buyer managing the tender is likely to want to keep them or not. Many public sector buyers often have prior information notices and opportunities to engage prior to the tender being formally advertised, which is a chance to highlight who you are and why you could be a very good option for the upcoming tender.

Completing competitor analysis on a live tender isn’t ideal, due to the timescales involved and will almost help your ‘more prepared’ competitors have more time to focus on bid writing and responding to the tender (ITT).

Preparing a wider competitor analysis which is continually updated and used as a business tool can then ensure you understand each key opportunity as it comes, wherever possible, having pre-empted its advertisement having had prior engagement with the public sector buyer.

This early market research and developing strong industry networks are crucial for identifying potential competitors. Attending bidder’s conferences, reviewing contract award histories and engaging with industry partners provides invaluable insights into who your competitors are and their market strategies. This initial step sets the foundation for a more in-depth analysis.

After identifying potential competitors, profiling them becomes the next crucial step. This involves gathering detailed information about their operations, strategies, and performance.

Tools and methods for profiling competitors, beyond those listed above, include:

• Linkedin – depending on whether you pay or not you may be able to quickly identify competitors and the size and nature of their sales, marketing and business development functions and the online content they are producing and who it is aimed at.
• Freedom of Information Act (FOIA) Requests can allow you to ask for specific information from public sector buyers, such as spend, suppliers, frameworks used, relevant Head of Service details and contract renewal dates, for example.
• Financial reports such as Dunn and Bradstreet (D&B). These reports provide comprehensive information on a competitor’s history, ownership, financial stability, and reputation, which are critical for assessing their capabilities and reliability.
• Competitors recruitment activity offer insights into the size of their operation and the skill sets they value, indicating their capacity and strategic focus, whether they directly employ a bid writing team or whether they have teams specifically focussed on framework maximisation. Making a Government Framework Work For Youcan provide further guidance on this.

Step-by-Step Guide to Conducting a Competitor Analysis

If competitive tendering and producing a competitor analysis is new for you or your business this section aims to provide a step-by-step process to follow. Conducting a competitor analysis in the public sector tendering process is crucial for businesses aiming to enhance their bid win rates.

Firstly, identifying your competitors is a critical initial step. This encompasses recognising direct competitors who offer the same services or products, secondary or indirect competitors who might provide alternative solutions, and substitute competitors who could potentially satisfy the same customer needs in different ways. This broad categorisation helps in understanding the competitive landscape more comprehensively.

Once competitors are identified, gathering detailed information about them becomes paramount. This includes insights into their products, pricing strategies, distribution channels (place), promotional activities, market positioning, reputation, the people they employ, and their partnerships. Such information can be sourced through various means, including attending bidder's conferences, examining contract awards and spend data. Remember though, Google is a power tool on its own!

This enables businesses to determine their competitive advantage by identifying their unique selling propositions and areas where improvements are needed. Furthermore, continuous monitoring of competitors for any changes or updates is essential for staying ahead in the competitive landscape. This comprehensive approach, from initial identification to detailed analysis and continuous monitoring, equips businesses with the knowledge to tailor their strategies effectively, thereby increasing their chances of winning public sector tenders.

Using Competitor Analysis for Growth

You can spend all day researching and completing the most accurate competitor analysis reports possible, but if you don’t use it, it is a total waste of time! Tailoring your business strategies based on your competitor analysis can enable differentiation based on your ideal customer and their requirements. Which align to your strengths in comparison to your competitors. This helps bid qualification but also brand personality and telling a story through your bid writing which can be key in connecting with customers and standing out from competitors. Regular analysis of competitors' schedules, product launches, and marketing strategies will almost feed into this and allow you to update and tailor your solution and the position of it.

A competitor analysis can often help you not just make improvements but inspire innovation and development. By studying competitor innovations, you can identify market gaps, spark new ideas, and learn from your competitors' mistakes. If you want to be at the forefront of your industry and leading in best practice, you need to understand what you are up against.

You may choose to position your business distinctively from competitors in the eyes of customers by defining and communicating your brand identity, mission, vision, and values. Demonstrating expertise, experience, and credibility through portfolios, testimonials and awards is essential, but the solution and ‘angle’ of how it is sold can often make all the difference. This requires a broader understanding of your client requirement as well as your competition.

Focus on core competencies, innovation, and differentiation to create and sustain a competitive advantage. Delivering value, quality, and exceeding expectations builds long-term relationships with customers. It is important to remember however, that when bid writing and deciding your win themes, that they not only consider your competition and how you compare, but the customer needs, which are ultimately the most important. If innovation and technology is largely how you differentiate yourselves from your competitors, but a specific client does not seem concerned with innovation or added value, you need to reassess your approach.

By tailoring your bid writing, and proposals based on understanding a specific customer need, then comparing it against competitors’ approach to tenders will allow you to plan a route to stand out. When it comes to standing out from your competitors how your bid looks is also important, so always consider bid design.

Identify your competitors, their strengths and weaknesses, and the types of tenders they're winning. Use data and evidence to support your claims and arguments, proving your performance and quality with facts, figures, statistics, testimonials, case studies, awards, certifications, or any other relevant information.

Identifying Direct vs Indirect Competitors

In business generally, but certainly in the competitive landscape of public sector tenders, understanding who you're up against is crucial. Competitor analysis can serve as a strategic tool that identifies, evaluates, and compares both direct and indirect competitors in the market. This analysis plays an important role in shaping strategies to increase bid win rates and to grow your business consistently.

Direct Competitors

These are businesses offering the same or very similar products or services. They target the same customer base and fulfil the same needs in the public sector tendering process. If you are offer services or products limited by locality, they will likely be your local rivals.

Identifying direct competitors involves looking at companies that have won similar tenders in the past or those bidding on the same contracts based on your key locations or nationally. The main focus with direct competitors is to understand their offering in detail - from pricing strategies, value propositions, to customer service approaches. This helps in tailoring your bids to highlight how your offerings are superior or provide better value for money.

Indirect Competitors

Unlike direct competitors, indirect competitors provide different products or services that can meet the same customer needs or solve the same problems. These might include alternative solutions that are not identical but could sway the decision of the tendering authority if they offer a better cost-benefit ratio, innovation, or a solution that addresses the tender requirements in a unique way. Recognising indirect competitors requires a broader market analysis, understanding emerging trends, and being aware of new technologies or services that could potentially meet the tender's needs in a different manner.

Understanding the distinction between direct and indirect competitors through competitor analysis enables businesses to craft more nuanced and competitive bids. It's not just about outperforming rivals on price or technical specifications; it's about demonstrating a deeper understanding of the tender requirements and showcasing how your solution is the most effective and efficient way to meet those needs. By effectively identifying and analysing both types of competitors, businesses can design strategies that not only address the strengths and weaknesses of their rivals but also position their offerings in a way that resonates with the tendering authority, thereby increasing their chances of winning public sector tenders.

Understanding Competitors' Pricing Strategies

Understanding and calculating competitors' pricing strategies can significantly improve your success rates in public sector tendering process; it is therefore an important aspect of any competitor analysis. For further information on pricing tenders see Dave Thornton’s LinkedIn article, Bid Writers Don’t Price Tenders or blog post on bid writing consultants role when it comes to pricing strategies.

Pricing Strategies Overview

• Penetration Pricing

Initially set prices lower than the competition to gain market entry and build references. This strategy is particularly useful for newcomers seeking to establish a foothold in the public sector market who may able to bid at reduced rates due to size and reduced infrastructure costs and overheads.

• Competitive Pricing

Align your prices with market expectations, ensuring your bid is competitive. This approach is viable if your offering includes value-added features or benefits that are not readily available from competitors.

• Price Skimming

If your solution offers a distinct advantage or innovation, consider setting a higher price point. This strategy demands careful consideration of the costs involved in assembling a winning bid and understand the evaluation criteria is critical.

• Cost-plus Pricing

A strategy used when there is limited information about competitor pricing. It involves adding a predetermined profit margin to the production costs. It's a straightforward approach but requires a keen understanding of all associated costs. We do want ultimately to be winning sustainable contracts.

In order price effectively you need a thorough understanding of both direct and indirect costs, alongside economies of scale as a result of the size of the tender opportunity. This analysis should inform a pricing strategy that aligns with the tenders evaluation criteria, ensuring the bid is both competitive and profitable.

To balance up the costs we have the quality elements of the bid which in the public sector typically outweighs that of price; 60% quality (including social value) and 40% price, for example. If you have a higher price can your approach to bid writing and your solution counter balance enough to ensure you maximise your win rate?

By highlighting innovation, whether based on the specifications or through unique solutions that justify a higher price point, can differentiate your bid. This may become more common as a result of changes in procurement and a likely rise in negotiation in public sector tenders. Demonstrating how these innovations offer added value to the client can be a key differentiator. Of course ensuring compliance with the bid is essential, but beyond this, ensuring the bid writing is based on the evaluation criteria and is aligned to it.

A well-informed pricing strategy, underpinned by thorough market research, competitor analysis and a clear understanding of the client's objectives, can significantly enhance a bid's chances of success.

Monitoring Competitors Continuously

Monitoring competitors continuously is an approach that involves several strategies and tools to keep a business informed and ahead in the public sector tendering process. Given the importance of this activity and the special request to avoid using bullet points and lists, the following content is structured to provide a cohesive narrative on the subject.

Continuous monitoring of the competitive landscape in public sector contracts is essential for businesses aiming for growth. This involves not just keeping an eye on market trends but also being proactive in adapting to these trends to seize new opportunities and tackle emerging challenges. The Public Contracts Regulations 2015 (PCR) and Procurement Act 2023, which comes into place in October 2024, guides the procurement process in the UK, and understanding these regulations is crucial for effectively monitoring and participating in public sector tenders. Early detection of tender announcements is particularly important, as deadlines may vary and being prepared can provide a competitive edge.

Building a robust network through engaging with industry events, conferences, and direct communication is invaluable. This network not only provides insights into upcoming contract opportunities but also facilitates the exchange of information about market trends and competitor strategies. Additionally, a comprehensive bidding plan, rooted in a thorough analysis of the tender document and evaluation criteria, is fundamental. Crafting a compelling tender proposal that presents an outstanding value proposition is the culmination of effective monitoring and analysis. Post-award, effective contract management involves setting clear key performance indicators and regularly auditing contract performance against these metrics to ensure the delivery of promised value and to identify areas for improvement.

Additionally, the process involves understanding the procurement procedures and frameworks within which these tenders operate. This includes:

• Familiarity with different procurement procedures such as Open Procedure, Restricted Procedure, or Competitive Flexible Procedure from October 2024, and others, helps in identifying the nature of competition and the types of competitors likely to be involved. Each procedure has its own set of requirements and attracts different types of competitors.
• Framework Agreements and Dynamic Purchasing Systems (DPS) are tools you need to understand. By collating and analysing the use of the these agreements you can further understand your competitors approach. For example, who in the sector is relying on direct sales and the use of ‘direct awards’ from frameworks? Being aware of existing framework agreements and DPS can provide insights into long-term contracts and opportunities for new suppliers to join, respectively. This knowledge is crucial for identifying competitors within these frameworks and systems.
• Monitoring tender portals for live tenders and contract award notices. For many of our clients they outsource this service to us via our Search & Selection or Bid Administration Service, which include competitor analysis.

This key step is crucial in designing a strategy not just to compete, but to win more public sector tenders by leveraging competitor analysis and understanding the competitive landscape.

Identifying Your Main Competitors

Identifying your main competitors and evaluating their marketing tactics is a crucial step in enhancing your bid win rates for public sector tenders. Through a strategic approach, you can gain insights into your competitors' strengths and weaknesses, enabling you to tailor your strategies for a competitive advantage. Below we have listed some of the key tools:

Competitor SWOT Analysis

Strengths - identify what your competitors do well in their marketing efforts. This could include their use of digital marketing, the strength of their brand, or their market presence.

Weaknesses - look for areas where competitors may be vulnerable. This could be gaps in their service offerings, limitations in their marketing reach, or areas where your business has a distinct advantage.

Opportunities - based on your competitors' weaknesses, what does this open up to your business? This might involve targeting a market segment that is underserved by your competitors or leveraging marketing channels they are not utilising effectively. If for example, a competitor has recently been acquired or grown at pace, and the service is declining, then having access to all their contracts can be a key focus for your business development team.

Threats – who is worrying you in the market? Winning more tenders than you expected and taken a long standing contract from you? Being aware of the strategies your competitors are using that could pose a threat to your market share or bid success. This includes new marketing tactics, aggressive pricing strategies, or expansion into new markets. By understanding them you can revise your approach or even copy theirs!

Buyer and Market Analysis

Compare your offerings with your competitors' to understand how you stack up in terms of price, quality, and service delivery. This will help you identify your unique selling points (USPs) and areas for improvement. Analyse common requirements across tenders you and your competitors are bidding for. This will give you insights into what the market values and how you can better align your offerings with these requirements.

Competitor Mapping

Create a map that outlines who your competitors are, what they offer, and their market positioning. This can include information on their key clients, the contracts they have won, and their expiry dates. Use this map to identify patterns or trends in the types of tenders your competitors are winning and the strategies they are employing. This can inform your own bid strategy and help you identify gaps in the market that you can exploit.

By systematically identifying your main competitors and evaluating their marketing tactics, you can design a strategy that not only competes but also stands out in the public sector tendering process. This approach enables you to make informed decisions, tailor your proposals more effectively, and ultimately, increase your return on investment in tendering activities.

Evaluating Competitor Marketing Tactics

Evaluating competitor marketing tactics in the realm of public sector tenders is a nuanced process that hinges on understanding several key factors. These factors not only shape how competitors position themselves but also influence the overall strategy for winning tenders.

Competitors segment the market into manageable groups based on characteristics, needs, preferences, or behaviours. This allows them to tailor their marketing messages more effectively to resonate with specific segments, thus enhancing their appeal in tenders.

Understanding the total value or volume of tenders available in a specific sector, industry, or region helps competitors gauge the market size and potential opportunities. This insight guides them in focusing their efforts on the most lucrative or strategic segments.

Market positioning is then crucial as it differentiates a business from its competitors in the eyes of customers. Competitors that successfully present themselves as offering unique benefits or superior value can have a significant edge in tenders.

A focus on core competencies, innovation, and differentiation is often the foundation of a competitive advantage. Competitors leverage this to showcase their unique capabilities or solutions, making their bids more attractive to procurement officials.

Customer-Centric Marketing and competitor marketing tactics requires understanding the customer's needs, goals, challenges, pain points, and preferences. This deep insight allows them to craft proposals that speak directly to the customer's requirements, using language, tone, and style that resonate with the tendering authority. Being customer-centric involves focusing on the benefits and outcomes that the customer will get from the solution. And there is often more than one customer or stakeholder. Stakeholder mapping allows you to understand the wider impact of your product and service into the public sector, allowing you to show further experience and expertise in the sector and giving you the opportunity to tailor your bid writing based on this knowledge.

Competitor Analysis FAQs

Can we outsource competitor analysis?

Yes this is common practice and a service Thornton & Lowe offers. We can produce an entirely bespoke bid pipeline and market report, including a deep dive into key competitors. This can be a single one-off project or part of a more consistent outsourced service such as our Bid Administration Service.

Can you train our team on creating competitor intelligence and how to use it?

Yes, we offer both bespoke, 1-2-1 courses delivered at your offices or online or we have online workshops for multiple companies specifically on the importance of competitor analysis. For full details take a look at our bid writing courses.

See our bid training page for more information.

What is competitive tendering in the public sector?

Competitive tendering in the public sector is a fundamental procedure used by the government in the UK to award contracts. This process is designed to promote transparency, fairness, and the best value for money when procuring goods and services. The practice of competitive tendering has both supporters and detractors within the UK.

How does competitive tendering work?

Competitive tendering is a method where potential suppliers compete against one another by submitting bids to secure contracts, commonly found within the public sector. The aim of this method is to identify the supplier who can provide the highest quality goods or services at the best value for money.

What strategies can help you win large tenders?

• Be selective and bid only on tenders you have a good chance of winning.
• Be prepared by standardising all your company policies, such as health and safety, quality, insurances, and accounts.
• Assemble a dedicated bid team to handle the tender response. Take a look at our team who help our clients who decide to outsource their bid writing function, including competitor analysis and market research.
• Thoroughly assess the needs of the buyer issuing the tender.
• Answer the tender questions clearly and precisely. See 8 Bid Writing Tips For Maximum Success.
• Gather all relevant facts and present them effectively.
• Request feedback on your submissions to improve future tenders.
• Sell yourself by highlighting what makes your company the best choice.

What are the benefits of tendering competitively?

One of the main benefits of the tendering process is that it encourages fair competition among suppliers. When an organisation issues a tender, it invites multiple suppliers to bid, which helps prevent bias towards any particular supplier and aims to ensure a transparent and equitable selection process.

If you are looking for bid writing consultancy or guidance beyond competitor analysis, take a looking our article Bid Writing Consultancy Unveiled: Navigating the Complexities of Bidding Processes.