The Marketing Environment and

Competitor Analysis
• SWOT analysis
• PEST analysis
• Five forces analysis
 SWOT analysis

• Strengths (internal)
• Weaknesses (internal)
• Opportunities (external)
• Threats (external)
 PEST analysis

• Political factors
• Economic factors
• Socio-cultural factors
• Technological factors
 Political/legal
• Monopolies legislation
• Environmental protection laws
• Taxation policy
• Employment laws
• Government policy
• Legislation
• Others?
 Economic Factors
• Inflation
• Employment
• Disposable income
• Business cycles
• Energy availability and cost
• Others?
 Sociocultural factors
• Demographics
• Distribution of income
• Social mobility
• Lifestyle changes
• Consumerism
• Levels of education
• Others?
 Technological
• New discoveries and innovations
• Speed of technology transfer
• Rates of obsolescence
• Internet
• Information technology
• Others?
 Five forces analysis
Potential
entrants

Threat of
entrants

Suppliers COMPETITIVE Buyers

RIVALRY
Bargaining Bargaining
power power

Threat of
substitutes

Substitutes
Source: Adapted from M. E. Porter,
Competitive Strategy, Free Press,
1980, p. 4.
 Five Forces Analysis: Key
Questions and Implications
• What are the key forces at work in the competitive
environment?
• Are there underlying forces driving competitive
forces?
• Will competitive forces change?
• What are the strengths and weaknesses of
competitors in relation to the competitive forces?
• Can competitive strategy influence competitive forces
(eg by building barriers to entry or reducing
competitive rivalry)?
 Analysis models

• Boston Box.
• GE matrix.
• Shell’s directional policy matrix.
 The Boston Box

Figure 20.3
 Boston Box
• Dog - holds a weak market share in a low growth market.
• Question mark - high market growth with low share.
• Star - a market leader in a growth market.
• Cash cow - as market growth starts to trail off, stars can
become cash cows.
• War horses - market leaders, whose cash generating position
under threat due to negative market growth.
• Dodos - low share of a declining market means that sales are
dwindling away.
 GE matrix

Figure 20.4
 Shell’s directional policy matrix

Figure 20.5
 Types of growth
Intensive growth:
• Market penetration.
• Market development.
• Product development.

Diversified growth
Integrative growth - backward, forward, horizontal.
No growth - harvesting, entrenchment, withdrawal.
 Competitor analysis

A systematic attempt to identify and understand key elements of a

competitor’s strategy in terms of objectives, strategies,
resource allocation and implementation through the marketing
mix.
 Porter’s Five Forces Model

1. Bargaining power of suppliers.

2. Bargaining power of customers.
3. Threat of new entrants.
4. Threat of substitute products or services.
5. Rivalry among current competitors.
 Concerns of an Org.’s competitive analysis

1. Who are our competitors?

2. How can our competitors be grouped meaningfully?
3. What are our competitors’ strengths and weaknesses?
4. What are our competitors’ objectives and strategies?
5. How are our competitors likely to react to changes in the
marketing environment?
 Concerns of an Org.’s competitive analysis (1)
Competitor identification
1. Who are our competitors?
Similar specific-same product, technology and target market
Similar general-same product area, but different segments
e.g. Haagen daze vs. Wall’s
Different specific-same need satisfied by different means
e.g. Eurostar vs. British airway
Different general-competing for discretionary spend
e.g. holiday vs. new car
 Concerns of an Org.’s competitive analysis (2)
2. How can our competitors be grouped meaningfully?
Different characteristics for identifying Strategic groupings

Figure 20.8
Source: Adapted from Wilson et al. (1992).
 Concerns of an Org.’s competitive analysis (3)
3. What are competitive strengths and weaknesses

• Requires use of various information sources.

• Consider in terms of critical success factors:
e.g. manufacturing, technical and financial strength,
relationships with supplier and customer, its market and
segment, product range, its volume, cash and profits etc.
• Information can be used to plan and launch attack.
 Concerns of an Org.’s competitive analysis (4)

4. What are our competitors’ objectives and strategies?

Objectives – related to cash generation, market share,

technological leadership, quality recognition
etc.
Find clues in product portfolio.
Strategy - related to its positioning, marketing mix etc.
 Concerns of an Org.’s competitive analysis (5)

5. How are our competitors likely to react to changes in the

marketing environment?

Learn by experience
Not easy to predict its reaction due to: its cost structures,
relative market positions, product life cycle, industrial
position etc.
 Concerns of an Org.’s competitive analysis (1)

1. Who are our competitors?

Similar specific-same product, technology and target market
Similar general-same product area, but different segments
e.g. Haagen daze vs. Wall’s
Different specific-same need satisfied by different means
e.g. Eurostar vs. British airway
Different general-competing for discretionary spend
e.g. holiday vs. new car
 Useful information about competitors

Table 20.2
Source: Wilson et al. (1992).
 Generic strategies

Figure 20.9
 Sources of differentiations

• Product – branding, innovation, quality,

specification, design, image, patents;
• Price – price positions, price-value combinations
• Place – intensive, exclusive distributions
• Promotion – creativity, spending
• Service – strong trust with customer
 Choice of generic strategy

• Fit between the demands of the strategy and the organisation’s

capabilities and resources.
• The main competitor’s abilities on similar criteria.
• The key criteria for success in the market and their match with
the organisation’s capabilities.
 Competitive positions and strategy

Figure 20.10
 Attacking and defending

• Aggressive strategies - frontal, flank, encirclement, bypass,

and guerrilla attacks.

• Defence strategies - fixed position, mobile, flanking,

contraction, counter offensive.
 Attack strategies

Figure 20.11
Source: Kotler and Singh (1981). Reproduced with permission of Thomson Media, Eleven Penn Plaza, New York, NY 10001
 Defence strategies

Figure 20.12
Source: Kotler and Singh (1981). Reproduced with permission of Thomson Media Eleven Penn Plaza, New York, NY 10001.
 Co-operative and independent strategies

Many situations can also be characterised by peaceful coexistence

and co-operative alliances between competitors.
Primary Sources of Competitor Information

Investment
Bankers
Consultants/
Specialized
Firms Sales Force

Primary
Data
Suppliers
Employees

Customers
 Secondary Sources of Competitor Information
Customer Internal
Communi Sources Local
Consultants cations
Newspapers
Annual
Trade Press Reports

Patent
Internet Secondary data Filings

Promotional 10Ks
Literature
Business
Trade
Press
Associations
News Electronic Government
Releases Databases
Other Sources of Competitor Information

Help-Wanted
Advertisements
Hiring Key
Employees Trade Shows

Primary
Data
Monitoring Plant Tours
Test Markets

Reverse
Engineering
 Assessing Competitors’
Strategies
• Marketing strategy
– Comparing value chains
– Marketing mix
• Pricing
• Promotion
• Distribution
• Product/Service capabilities
 Criteria to Assess Technological Strategy

1. Technology selection or specialization

2. Level of competence
3. Sources of capability: internal versus external
4. R&D investment level
5. Competitive timing: initiate versus respond
6. R&D organization and policies
 Competitor Information to
Collectand design
• Ability to conceive
• Ability to produce
• Ability to market
• Ability to finance
• Ability to manage
 SWOT
• Strengths
• Bharti Airtel has more than 65 million customers (July 2008). It is
the largest cellular provider in India, and also supplies broadband
and telephone services - as well as many other telecommunications
services to both domestic and corporate customers.
• Other stakeholders in Bharti Airtel include Sony-Ericsson, Nokia -
and Sing Tel, with whom they hold a strategic alliance. This means
that the business has access to knowledge and technology from
other parts of the telecommunications world.
• The company has covered the entire Indian nation with its network.
This has underpinned its large and rising customer base.
 SWOT
• Weaknesses
• An often cited original weakness is that when the business was started by Sunil Bharti Mittal over 15 years ago, the business has little knowledge and experience of how a cellular telephone system
actually worked. So the start-up business had to outsource to industry experts in the field.
• Until recently Airtel did not own its own towers, which was a particular strength of some of its competitors such as Hutchison Essar. Towers are important if your company wishes to provide wide
coverage nationally.
• The fact that the Airtel has not pulled off a deal with South Africa's MTN could signal the lack of any real emerging market investment opportunity for the business once the Indian market has become
mature.
• Opportunities
• The company possesses a customized version of the Google search engine which will enhance broadband services to customers. The tie-up with Google can only enhance the Airtel brand, and also
provides advertising opportunities in Indian for Google.
• Global telecommunications and new technology brands see Airtel as a key strategic player in the Indian market. The new iPhone will be launched in India via an Airtel distributorship. Another strategic
partnership is held with BlackBerry Wireless Solutions.
• Despite being forced to outsource much of its technical operations in the early days, this allowed Airtel to work from its own blank sheet of paper, and to question industry approaches and practices -
for example replacing the Revenue-Per-Customer model with a Revenue-Per-Minute model which is better suited to India, as the company moved into small and remote villages and towns.
• The company is investing in its operation in 120,000 to 160,000 small villages every year. It sees that less well-off consumers may only be able to afford a few tens of Rupees per call, and also so that
the business benefits are scalable - using its 'Matchbox' strategy.
• Bharti Airtel is embarking on another joint venture with Vodafone Essar and Idea Cellular to create a new independent tower company called Indus Towers. This new business will control more than
60% of India's network towers. IPTV is another potential new service that could underpin the company's long-term strategy.
• Threats
• Airtel and Vodafone seem to be having an on/off relationship. Vodafone which owned a 5.6% stake in the Airtel business sold it back to Airtel, and instead invested in its rival Hutchison Essar.
Knowledge and technology previously available to Airtel now moves into the hands of one of its competitors.
• The quickly changing pace of the global telecommunications industry could tempt Airtel to go along the acquisition trail which may make it vulnerable if the world goes into recession. Perhaps this
was an impact upon the decision not to proceed with talks about the potential purchase of South Africa's MTN in May 2008. This opened the door for talks between Reliance Communication's Anil
Ambani and MTN, allowing a competing Inidan industrialist to invest in the new emerging African telecommunications market.
• Bharti Airtel could also be the target for the takeover vision of other global telecommunications players that wish to move into the Indian market.
• Airtel comes to you from Bharti Airtel Limited, India's largest integrated and the first private telecom services provider with a footprint in all the 23 telecom circles. Bharti Airtel since its inception has
been at the forefront of technology and has steered the course of the telecom sector in the country with its world class products and services. The businesses at Bharti Airtel have been structured into
three individual strategic business units (SBU's) - Mobile Services, Airtel Telemedia Services & Enterprise Services. Read more...
• Bibliography
• Bharti Airtel - Rider of the boom - Rishi Joshi and Amit Mukherjee, Business Today 5th March 2008
• Bharti Airtel's Website
• Wiki - Bharti Airtel