Competitor Analysis

Objectives

Learn how to understand competitors as

well as customers via competitor
analysis.
Learn the fundamentals of competitive
marketing strategies based on creating
value for customers.
Realize the need for balancing customer
and competitor organizations in order
to become a truly market-centered
organization.
18- 2
 Inctel
Has dominated the Heavy focus on
chip industry product and
Success is directly advertising innovation
related to and R&D investments
Intel’s Changing market
competitive needs have
strategy challenged Intel to
Strategy focuses adapt
on superior value Intel is capitalizing on
and product the Internet now
leadership
18- 3
 Definition

Competitive Advantage
 An advantage
over competitors
gained by offering
consumers greater
value than
competitors offer.

18- 4
 Definition

Competitive Analysis
 The process of identifying key
competitors; assessing their
objectives, strategies, strengths
and weaknesses, and reaction
patterns; and selecting which
competitors to attack or avoid.

18- 5
 Figure 18-1:
Steps in
Analyzing
Competitors

18- 6
 Competitor Analysis
Steps in the Firms face a wide
range of competition
Process:
Be careful to avoid
Identifying “competitor myopia”
Competitors Methods of
Assessing identifying
Competitors competitors:
Selecting  Industry
Competitors to point-of-
Attack or Avoid view
 Market
point-of- 18- 7
230-year-old
Encyclopedia
Britannica
viewed itself as
competing with
your publishers
of printed
encyclopedias.
Big mistake! Its
real
competitors
were software
encyclopedias
and the Internet.
18- 8
 Figure 18-2:
Competitor
Map

18- 9
 Discussion
Question
Create a competitor
map for one of the
following:
• WalMart
• McDonald’s
• Nike
• Starbucks
• Google

18- 10
 Competitor Analysis
Determining
Steps in the competitors’ objectives
Process: Identifying competitors’
strategies
Identifying  Strategic groups
Competitors Assessing competitors’
Assessing strengths and
Competitors weaknesses
 Benchmarking
Selecting Estimating competitors’
Competitors to reactions
Attack or Avoid
18- 11
 Competitor Analysis
Strong or weak
Steps in the competitors
Process:  Customer
value analysis
Identifying Close or distant
Competitors competitors

Most companies compete
Assessing against close
Competitors competitors
Selecting “Good”
 or “Bad”
Competitors to competitors
The existence of
Attack or Avoid competitors offers several
strategic benefits
18- 12
Competitive Strategies
Basic Winning Competitive
Strategies: Porter
 Overall cost leadership
 Lowest production and
distribution costs
 Differentiation
 Creating a highly
differentiated product line
and marketing program
 Focus
 Effort is focused on
serving
18- 13
Competitive Strategies

Basic Competitive Strategies:

Value Disciplines
 Operational excellence
 Superior value via price and
convenience
 Customer intimacy
 Superior value by means of building
strong relationships with buyers and
satisfying needs
 Product leadership
 Superior value via product innovation
18- 14
 Figure 18-3:
Hypothetical
Market Structure

18- 15
 Competitive Strategy
Expanding the total
Competitive demand
Positions  Finding new users
 Discovering and
promoting new product
Market uses
 Encouraging greater
Leader product usage
Protecting market
Market 
share
Challenger  Many considerations

Market 
Continuous innovation
Expanding market share
Follower Profitability rises with
market share
Market 18- 16
 Competitive Strategy

WD-40 has a knack

for developing new
uses for its product.
What other brands
have adopted a
similar strategy?

WD40

18- 17
 Competitive Strategy
Option 1: challenge the
Competitive market leader
Positions  High-risk but high-gain
 Sustainable competitive
Market advantage over the leader
is key to success
Leader Option 2: challenge firms
Market of the same size, smaller
size or challenge
Challenger regional or local firms
Market Full frontal vs. indirect
Follower attacks

Market 18- 18
Pepsi is an
example of
market
challenger
that has
chosen to use
a full frontal
attack

18- 19
 Competitive Strategy
Competitive Follow the market
leader
Positions
 Focus is on improving
profit instead of
Market market share
Leader  Many advantages:
Market  Learn from the
market leader’s
Challenger experience
 Copy or improve on
Market the leader’s offerings
Follower  Strong profitability

Market 18- 20
Dial Corporation
successfully
uses a market
follower strategy

18- 21
 Competitive Strategy
Competitive Serving market
niches means
Positions targeting
subsegments
Market Good strategy for
Leader small firms with
limited resources
Market Offers high margins
Challenger Specialization is key
Market  By market, customer,
Follower product, or
marketing mix lines
Market 18- 22
Balancing Customer
and Competitor
Orientations
Companies can become so
competitor centered that they
lose their customer focus.
Types of companies:
Competitor-centered
companies
Customer-centered companies
Market-centered companies
18- 23
 Game playing
industry
a. Nintendo
a. Wii hyperlink
b. Microsoft
a. Xbox 360
c. Sony
a. Play
Station
18- 24