Industry and

Competitive Analysis
By:
Alcanzo, Rica
Bernardo, Jamil
Garcia, Cierene
Ramirez, Sophia
Valencia, Irah
 Methods of
Industry and
Competitive
Analysis
What is an industry?
Industry is a group of productive enterprises
or organizations that produce or supply
goods, services, or sources of income. In
economics, industries are customarily
classified as primary, secondary, tertiary and
quaternary.
What is industry
analysis?
Industry analysis is a market assessment tool
used by businesses and analysts to understand
the competitive dynamics of an industry. It
helps them get a sense of what is happening in
an industry
 Methods of Industry
Analysis

Broad Factors SWOT Analysis

Competitive Forces Analysis (PEST
Model (Porter’s 5 Analysis) SWOT Analysis stands
Forces) for Strengths,
Broad Factors Weaknesses,
One of the most famous Analysis, also Opportunities, and
models ever developed commonly called the Threats. It can be a
for industry analysis, PEST Analysis stands great way of
famously known as for Political, summarizing various
Porter’s 5 Forces, was Economic, Social and industry analysis
introduced by Michael Technological. PEST methods and
Porter in his 1980 book analysis is a useful determining their
“Competitive Strategy: framework for implications for the
Techniques for analyzing the external business in question.
Analyzing Industries environment.
and Competitors.”
What is Competitive Analysis?
It is an analysis or research that identifies your
competitors and evaluates their strategies to determine their
strengths and weaknesses relative to those of your own product
or service.

It is a critical part of your company marketing plan. With

this evaluation, you can establish what makes your product or
service unique--and therefore what attributes you play up in
order to attract your target market.
Methods of Competitive
Analysis
1. Identify the current and potential
competition.
2. Determine five strategic areas in which
you are competitive.
3. Create a competition matrix.
4. Create separate matrices for those areas
that contain multiple variables.
5. Review the matrices to determine which
areas your company is most vulnerable.
6. Determine where the gaps are in the
competitive matrix.
 5 Forces of
Competition
(Porter's Forces)
1. Competitive rivalry
This force examines how intense the competition currently is in the
marketplace, which is determined by the number of existing
competitors and what each can do.
Rivalry competition is high when there are just a few businesses
equally selling a product or service, when the industry is growing
and when consumers can easily switch to a competitor's offering
for little cost.
When rivalry competition is high, advertising and price wars can
ensue, which can hurt a business's bottom line.

2. Bargaining power of suppliers

This force analyzes how much power a business's supplier has and
how much control it has over the potential to raise its prices, which,
in turn, would lower a business's profitability.
In addition, it assesses the number of suppliers available: The
fewer there are, the more power they have. Businesses are in a
better position when there are a multitude of suppliers.
3. Bargaining power of customers
This force examines the power of the consumer and their effect on pricing
and quality. Consumers have power when there aren't many of them but
there are plentiful sellers, as well as when it is easy for customers to switch
from one business's products or services to another's.
Buying power is low when consumers purchase products in small amounts and
the seller's product are very different from any of its competitors.

4. Threat of new entrants

This force considers how easy or difficult it is for competitors to join the
marketplace in the industry being examined.
The easier it is for a competitor to join, the greater the risk of a business's
market share being depleted. Barriers to entry include absolute cost
advantages, access to inputs, economies of scale and well-recognized brands.
5. Threat of substitute products or services
This force studies how easy it is for consumers to switch from a
business's product or service to that of a competitor. It looks at
the number of competitors, how their prices and quality compare to
the business being examined and how much of a profit those
competitors are earning, which would determine if they can lower
their costs even more.
The threat of substitutes is informed by switching costs, both
immediate and long-term, as well as a buyer's inclination to change.
Strategic Implication of 5 Forces of Competition
 Cost Differentiation
Focus
Leadership

To implement this A successful

Your goal is to strategy, make the implementation means
company's products the company selects
increase profits niche markets in which
significantly
by reducing costs different from the
to sell their goods. It
while charging competition,
requires an intense
understanding of the
industry-standard improving their marketplace, its sellers,
prices, or to competitiveness and buyers and competitors.
value to the public. It
increase market More information about
requires good the generic strategies
share by reducing research and is available in Porter's
the sales price development plus 1985 book, "Competitive
while retaining effective sales and Advantage" (Free
marketing teams. Press).
profits.
The Concept
of Driving
Forces
 Driving Forces
•The main factors that causes something to
happen
•In 1970's, Benjamin Tregoe developed the
concept of the driving force as a way to
think about an organization's strategic
intent.
•There 2 kinds of driving force; internal
and external.
LRNITEAN GNIIRDV
SEORFC
INTERNAL DRIVING
FORCES
Internal Driving Forces
-are the things, structures and
events etc. that occurs within the
organization.

Strategic Structural Process- Employee Technologic

oriented Moral al Change
•Strategic
-Sometimes in the course of normal business operation it is necessary for
the management to adjust the firm's strategy to achieve the goals of the
company or even to change the mission statement of the organization in
response to demands of the external environments
•Structural
-Organizations often find it necessary to redesign the structure of the
company due to influences from the external environment
•Process-oriented
-Organizations may need to re-engineer process to achieve optimum
workflow and productivity
•Employee Moral
-This type of change or driving force alters the attitudes, behaviors, skills
and performance of employees in the company.
•Technological Change
-Requires organization learn how to manage the innovation process.
Technological capabilities provide new products, change existing ones and
create a more competence.
ANRTEXEL NVRDIIG ROSFCE
EXTERNAL DRIVING
FORCES
 01 External Driving
Forces
04 Competition Changes in
Technology Those kind of
things,
situations,
events etc.
Customer
Requiremen Political that occurs
t Factors 02 outside of an
organization.

03
•Changes in Technology
Different organization apply different technology as per the
standard of their pre-determine goal.

•Political Factors
In the organization, government also affects to the
organization's environment like taxes, custom and duty, pollution
control etc.

•Customer Requirement
Each organization must tries to attract the customers by more
satisfaction to customer.

•Competition
Competition forces firms and businesses to undergo innovation
LATENORVENIMN NGINCSAN EQTCENIUHS

ENVIRONMENTAL SCANNING TECHNIQUES

 Environmental Scanning
Environmental scanning is the process of gathering information about
events and their relationships within an organization's internal and
external environments. The basic purpose of environmental scanning
is to help management determine the future direction of the
organization.

There are various scanning techniques used by organizations

1. SWOT Analysis
2. Environmental Threats and opportunities Profile (ETOP)
3. PEST Analysis
4. Strategic advantage profile (SAP)
5. QUEST
6. The opportunity and Threat matrices
7. The Impact Matrix
8. The Impact scale
9. Gap Analysis
10. Functional – area profile and resource deployment matrix
SWOT Analysis
SWOT analysis stands for strengths, weaknesses, opportunities and threats analysis of a
business environment. Strengths and weaknesses are an organization’s internal factor
while threats and opportunities are considered as external factors. So, the process of
SWOT analysis includes the systematic analysis of these factors to determine an
effective marketing strategy. It is a tool that is used by the organization for auditing
purposes to find its different key problems and issues.

Strengths: The strength of any organization is related to its core competencies i.e.
efficient resources or technology or skills or advantages over its competitors.
Weaknesses: A weakness or limitation of an organization is related to the scarcity of its
resources or skill-set of staff or capabilities that creates an adverse effect on its
performance.
Opportunities: An opportunity of the organization’s environment is considered as its most
favorable situation. These are the circumstances that are external to the business and
can become an advantage to the organization.
Threats: Threats of an organization are current or future unfavorable situations that may
occur in its external environment.
ETOP is considered as a useful device that
facilitates an assessment of information
related to the environment and also in
determining the relative significance of
external environment threats and
opportunities to systematically evaluate
environmental scanning.

Environmental Threat and Opportunity

Profile Analysis (ETOP)
PEST Analysis
PEST technique for a firm’s environmental scanning includes analysis of
political, economic, social, and technical factors of the environment.

Political factors: Different factors like changes in tax policy, availability of raw
material, etc. creates a direct effect on a business. So organizations are
required to constantly monitor tax-related policy changes as an increase in tax
may increase the heavy financial burden on them. Similarly, different laws like
“Consumer protection act” also play an important role in an organization’s
operation activities as it is important to abide by the act.

Economic factors: Different economical Factors like the unemployment rate,

inflation, cost of labor, economic trends, disposable income of consumers,
monetary policies, etc. play an important role in environmental scanning.
PEST Analysis

Social / Cultural factors: Attitude, trends, and behavioral aspects of society also
create an impact on the functioning of the organization. Studying and
understanding the lifestyle of consumers is very much required to target the
right audience and to offer the right product or services based on their
preferences.

Technological Factors: Technological factors affect the way firms produce

products and services as well as market them. Like, “processes based on new
technologies” is one of the important factors of a technological environment. To
maximize profits, production should be handled most cost-effectively and this,
technology has an important contribution.
CIETTSRAGA AADNTGEAV IFOLRPE

STRATEGIC ADVANTAGE PROFILE

A Profile of strategic advantages (SAP) is a
summary statement, which provides an overview
of the advantages and disadvantages in key
areas likely to affect future operations of the firm.
It is a tool for making a systematic evaluation of
the strategic advantage factors, which are
significant for the company in its environment.

Strategic Advantage Profile

QUEST is an environmental scanning
technique that is designed to assist with
organizational strategies by keeping
adheres to change and its implications.

Quick Environmental Scanning

Technique Analysis (QUEST)
Strategic Group
Maps

Used for the

purpose of Strategic Group
displaying the Maps and Its Uses
competitive
positions that rival
firms occupy in
the industry.
 Purpose of Strategic Group
Maps
 Identification of close and distant rivals
 Identification of attractive and unattractive
positions of the firms in industry
 Identifying the strategic group a firm should
consider entering
 Analyzing the type and level of entry barriers
 Examines the number and type of entry barriers
Example of Strategic Group
Maps
Key Factors of Competitive
Success
KSFs are competitive elements that most affect
every
industry member’s ability to prosper in the
marketplace.

 Specific strategy elements

 Product attributes
 Resources
 Competencies
 Competitive capabilities
 Example of Actual
Competitive Analysis
Competitive Factors
-what makes customer choose one solution over another

Price Service Quality

Cheaper Faster, Personalized, Lasts longer, stylish,
Convenient tastes better
 Where can you find
information?
• Customer Discovery interviews
• Advertising
• Sales brochure
• Newspaper/magazines
• Website
• Online sites that rate products/
services
Examples Of Features
 Price
 Benefits
 Quality
 Durability
 Image/style
 Service
 Warranties
 Convenience
 Ease of use
 No. Of features
 Type of features
 Wow factor
 Location
 Distribution/ sales
 Certifications
 Endorsement
Most Common Format
EXAMPLE
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