Competitors Analysis

Dr. Dulari S S
Associate Professor
 Y do we do competitor analysis?
• Mapping the competitive landscape
• How good are our resources?
• How strong are our capabilities compared to
customers expectations?
• What can trump this resource?
• What can make our capabilities obsolete?
 Competitive Advantage
• A competitive advantage is something a co
does that has value for consumers & that
competitors cannot match
• Firms build CA by doing better than other
competitors do, doing what others don’t do or
can’t do
• Competitor intelligence eg: microsoft
• Both large & small co’s- signals
• Disruptors
• Firms competitors changes with its business
model
• Why do co’s insensitive to competitors
intelligence?
– Overconfidence
– uncertainty about where to collect the necessary
info & how to analyse
– Is an ethical consideration
Competitor Analysis system

Differential
Data Questions Strategies
CAA
 Competitor Analysis Model
• 1. Data: Secondary data
• Primary data – sales force, customers,
employees, suppliers, consultants, investment
bankers, ads, trade shows, being a customer
of competitor, monitoring test markets, hiring
key employees
 Questions
• Who are the major competitors?
• How do the competing pdts stack up against
each other?
• What are the objectives of the major
competitors?
• What is their current strategy employed to
achieve the objectives?
• Who has the competitive edge?
• What are they likely to do in the future?
Assessing competitor’s current objectives

• To know the competitors intention

• To assess the capabilities of competitors
• Growth objective
• Hold objective
• Harvest objective
 Assessing competitors current strategies

• Marketing strategy: product level – 3 major

components
– Target market selection
– Core strategy ( i.e. positioning & differential
advantage)
– Implementation ( supporting marketing mix)
 Comparing value chains
• Product manger use the value chain concept
to check at each step of the process if & how
a competitor is gaining competitive advantage
in the category.
 Competitor Analysis
• Understanding competitors current strategy &
extrapolating from its actions & investments to
anticipate its future moves.
• Must decipher the customer segments which
competitor is targeting & the position each occupies
• Need to compare each rival product/ services, price
points, and distribution strategy against their own
• Understand the strategic trajectories competitor
might take so as to plan their own strategies
 Differential Advantage Analysis
• assesses the strengths & weaknesses of
competing products based on information about
the competitors capabilities along a set of
dimensions
• Ability to conceive & design
• Ability to produce
• Ability to market
• Ability to finance
• Ability to manage
 Differential Advantage Analysis
Competitor Capabilities Matrix
1. Competitors ability to conceive & design:
1. Technical resources
2. HR
3. R & D funding
4. Technological strategy
5. Management processes
2. Ability to produce:
1. Physical resources
1. Capacity
2. Plant
3. Eqipment
4. Processes
5. Degree of integration
2. Human resources
1. Key people & skills
2. Workforce
3. Suppliers
3. Ability to market:
1. sales force
2. Distribution network
3. Service & sales policies
4. Advertising
5.Human resource
6.Funding
4. Ability to finance:
1. long term- debt/ equity ratio, cost of debt
2. short term- cash, type of debt, cost of
debt
3. liquidity-
4. cash flow-
5. Human resources- key people & skills
6. System- budgeting, forecasting, controlling
5. Ability to manage:
– Key people- objectives & priorities, values, reward
system
– Decision making- location , speed, type
– Planning- type, time span
– Staffing- longevity & turnover, experience,
replacement policies
– Organisation- centralisation, functions, use of staff
 What next with the information?
1. Construct a table pattern
2. Detecting the S & W of the co’s product –
internal or resource analysis
3. Product mangers to evaluate his products
capabilities versus competitors on a factor by
factor basis
4. Predicting future strategies
 Differential Competitor Advantage Analysis
Critical Success
Factors
A B C Our Product

Overall rating
 Product Features Matrix
• Weights are assigned to different features
indicates the relative importance of the
different features.
• A competitive- strength assessment gives a
good idea of the S & W of product relative to
the competition
 How to predict competitors future
strategies?
• How crucial is this product/ service to the
firm?
• How visible is the commitment to the market?
• How aggressive are the managers?
 Comparing players positions
• Market leaders- dominate the industry & enjoy large
market share
• Market challengers- aggressive strategies to gain
market share & unseat the leader Eg: Lowes, Canon
McDonalds- pioneer was White Castle
• Market follower-content to let others lead & mimic
rivals innovations
• Market nichers- delivering specialized products
designed to serve small unexplored segments
 Playing the Game right
1. Finding a new game
1. Red Ocean
2. Blue Ocean
2. Competitive strategies ( Michael Porters
Competitive Positioning strategies)
3. Offensive strategies
4. Defensive strategies
 Competitive Strategies

• Michael Porters Competitive Positioning

strategies:
– Overall Cost Leadership
– Differentiation
– Focus
 Playing the Game right
• Offensive strategies:
1. Comparative advertising
2. First Mover advantage
3. Price
 Defensive strategies
• Strong customer relationships
• Market coverage
• Legal protection
• Winning without a fight- eg: price match
guarantees
• Framing the game- appealing to consumer
sentiment