Description
“What are they going to do?”
Competitor Analysis in marketing and strategic management is an assessment of the strengths and weaknesses of current and potential competitors.
COMPETITOR ANALYSIS
“What are they going to do?”
-PRATIBHA -RISHAB
DEFINITION:? Competitor Analysis in marketing and strategic
management is an assessment of the strengths and weaknesses of current and potential competitors. ? In concentrated industries, competitor analysis becomes a vital part of strategic planning. ? In formulating business strategy, managers must consider the strategies of the firm's competitors.
Competitor Analysis has several important roles in Strategic Planning:To help management understand their competitive advantages/disadvantages relative to competitors.
? ?
To generate understanding of competitors’ past, present (and most importantly) future strategies.
? To provide an informed basis to develop strategies to
achieve competitive advantage in the future.
? To help forecast the returns that may be made from
future investments (e.g. How will competitors respond to a new product or pricing strategy ?)
Framework for Analyzing Competitors :? Michael Porter presented a framework for
• •
•
•
analyzing competitors. This framework is based on the following four key aspects of a competitor :Competitor's Objectives Competitor's Assumptions Competitor's Strategy Competitor's Capabilities
COMPETITOR ANALYSIS SYSTEM :? 1. Gather Secondary Data. ? 2. Gather Primary Data. ? 3. Answer Key Questions :-
• What are their product/service features? • What are their objectives / strategy?
? 4. Determine who has Competitive Edge?
? 5. Figure what they are going to do?
PRIMARY DATA
? Sales people ? Employees
? “mystery shoppers”
? Suppliers
? Accountants, lawyers, printers, etc.
? Consultants ? Investment bankers ? Help-wanted ads ? Trade shows
SECONDARY DATA
? Internal sources
? Internet
? Sales literature ? Local newspapers ? Business press ? Consultants
Why bother to analyze competitors?
Some businesses think it is best to get on with their own plans and ignore the competition. Others become obsessed with tracking the actions of competitors (often using underhand or illegal methods). Many businesses are happy simply to track the competition, copying their moves and reacting to changes. ? Competitor analysis has several important roles in strategic planning: • To help management understand their competitive advantages/disadvantages relative to competitors • To generate understanding of competitors’ past, present (and most importantly) future strategies • To provide an informed basis to develop strategies to achieve competitive advantage in the future • To help forecast the returns that may be made from future investments (e.g. how will competitors respond to a new product or pricing strategy?)
?
What questions should be asked when undertaking competitor analysis?
Who are our competitors? (see the section on identifying competitors further below)
? ? ?
What threats do they pose? What is the profile of our competitors?
?
?
What are the objectives of our competitors?
What strategies are our competitors pursuing and how successful are these strategies?
? ?
What are the strengths and weaknesses of our competitors?
How are our competitors likely to respond to any changes to the way we do business?
FIVE-FORCES ANALYSIS
THREAT OF POTENTIAL ENTRANTS
BARGAINING POWER OF SUPPLIERS
COMPETITIVE RIVALRY
BARGAINING POWER OF BUYERS
THREAT OF SUBSTITUTES
Determining Objectives
Objective Implication
Company A
Company B Company C
Harvest
Hold Growth
increase price, decrease promos maintain price and promos cut price, increase promos, increase distribution
COMPETITOR ARRAY :One common and useful technique is constructing a “COMPETITOR ARRAY”. The steps include: ? Define your industry - scope and nature of the industry. ? Determine who your competitors are. ? Determine who your customers are and what benefits they expect. ? Determine what the key success factors are in your industry. ? Rank the key success factors by giving each one a weighting The sum of all the weightings must add up to one. ? Rate each competitor on each of the key success factors. ? Multiply each cell in the matrix by the factor weighting.
Key Industry Success Factors 1Extensive distribution 2Customer focus 3Economies of scale
Competitor Weighting #1 rating
Competitor Competitor Competitor #1 #2 #2 rating weighted weighted
.4
6
2.4
3
1.2
.3
4
1.2
5
1.5
.2
3
.6
3
.6
4 - Product innovation
.1
7
.7
4
.4
New Competitors :In addition to analyzing current competitors, it is necessary to estimate future competitive threats. The most common sources of new competitors are :?
Companies competing in a related product/market. ? Companies using related technologies. ? Companies already targeting your prime market segment but with unrelated products. ? Companies from other geographical areas and with similar products. ? New start-up companies organized by former employees and/or managers of existing companies.
WHAT NOW ?
? What will be competitors’ strategies? ? 1. continue as it is ? 2. change due to
? Changes in marketplace ? Changes in management ? Changes in financial goals
? How to determine new direction?
? Management judgment ? Simulation
? What will be competitors’ reaction to our strategy?
ACKNOWLEDGEMENT :We are heartily grateful to Ma’m Ritika Hemdev for giving us an opportunity to present this PPT.
BIBLIOGRAPHY :? Google
? Wikipedia
? Books
•
on Strategic Management by :
Fred R. David • Ireland, Hoskisson, Hitt • Stephen P. Robbins, Mary Coulter, Neharika Vohra
THANK YOU !!!
doc_565687600.pptx
“What are they going to do?”
Competitor Analysis in marketing and strategic management is an assessment of the strengths and weaknesses of current and potential competitors.
COMPETITOR ANALYSIS
“What are they going to do?”
-PRATIBHA -RISHAB
DEFINITION:? Competitor Analysis in marketing and strategic
management is an assessment of the strengths and weaknesses of current and potential competitors. ? In concentrated industries, competitor analysis becomes a vital part of strategic planning. ? In formulating business strategy, managers must consider the strategies of the firm's competitors.
Competitor Analysis has several important roles in Strategic Planning:To help management understand their competitive advantages/disadvantages relative to competitors.
? ?
To generate understanding of competitors’ past, present (and most importantly) future strategies.
? To provide an informed basis to develop strategies to
achieve competitive advantage in the future.
? To help forecast the returns that may be made from
future investments (e.g. How will competitors respond to a new product or pricing strategy ?)
Framework for Analyzing Competitors :? Michael Porter presented a framework for
• •
•
•
analyzing competitors. This framework is based on the following four key aspects of a competitor :Competitor's Objectives Competitor's Assumptions Competitor's Strategy Competitor's Capabilities
COMPETITOR ANALYSIS SYSTEM :? 1. Gather Secondary Data. ? 2. Gather Primary Data. ? 3. Answer Key Questions :-
• What are their product/service features? • What are their objectives / strategy?
? 4. Determine who has Competitive Edge?
? 5. Figure what they are going to do?
PRIMARY DATA
? Sales people ? Employees
? “mystery shoppers”
? Suppliers
? Accountants, lawyers, printers, etc.
? Consultants ? Investment bankers ? Help-wanted ads ? Trade shows
SECONDARY DATA
? Internal sources
? Internet
? Sales literature ? Local newspapers ? Business press ? Consultants
Why bother to analyze competitors?
Some businesses think it is best to get on with their own plans and ignore the competition. Others become obsessed with tracking the actions of competitors (often using underhand or illegal methods). Many businesses are happy simply to track the competition, copying their moves and reacting to changes. ? Competitor analysis has several important roles in strategic planning: • To help management understand their competitive advantages/disadvantages relative to competitors • To generate understanding of competitors’ past, present (and most importantly) future strategies • To provide an informed basis to develop strategies to achieve competitive advantage in the future • To help forecast the returns that may be made from future investments (e.g. how will competitors respond to a new product or pricing strategy?)
?
What questions should be asked when undertaking competitor analysis?
Who are our competitors? (see the section on identifying competitors further below)
? ? ?
What threats do they pose? What is the profile of our competitors?
?
?
What are the objectives of our competitors?
What strategies are our competitors pursuing and how successful are these strategies?
? ?
What are the strengths and weaknesses of our competitors?
How are our competitors likely to respond to any changes to the way we do business?
FIVE-FORCES ANALYSIS
THREAT OF POTENTIAL ENTRANTS
BARGAINING POWER OF SUPPLIERS
COMPETITIVE RIVALRY
BARGAINING POWER OF BUYERS
THREAT OF SUBSTITUTES
Determining Objectives
Objective Implication
Company A
Company B Company C
Harvest
Hold Growth
increase price, decrease promos maintain price and promos cut price, increase promos, increase distribution
COMPETITOR ARRAY :One common and useful technique is constructing a “COMPETITOR ARRAY”. The steps include: ? Define your industry - scope and nature of the industry. ? Determine who your competitors are. ? Determine who your customers are and what benefits they expect. ? Determine what the key success factors are in your industry. ? Rank the key success factors by giving each one a weighting The sum of all the weightings must add up to one. ? Rate each competitor on each of the key success factors. ? Multiply each cell in the matrix by the factor weighting.
Key Industry Success Factors 1Extensive distribution 2Customer focus 3Economies of scale
Competitor Weighting #1 rating
Competitor Competitor Competitor #1 #2 #2 rating weighted weighted
.4
6
2.4
3
1.2
.3
4
1.2
5
1.5
.2
3
.6
3
.6
4 - Product innovation
.1
7
.7
4
.4
New Competitors :In addition to analyzing current competitors, it is necessary to estimate future competitive threats. The most common sources of new competitors are :?
Companies competing in a related product/market. ? Companies using related technologies. ? Companies already targeting your prime market segment but with unrelated products. ? Companies from other geographical areas and with similar products. ? New start-up companies organized by former employees and/or managers of existing companies.
WHAT NOW ?
? What will be competitors’ strategies? ? 1. continue as it is ? 2. change due to
? Changes in marketplace ? Changes in management ? Changes in financial goals
? How to determine new direction?
? Management judgment ? Simulation
? What will be competitors’ reaction to our strategy?
ACKNOWLEDGEMENT :We are heartily grateful to Ma’m Ritika Hemdev for giving us an opportunity to present this PPT.
BIBLIOGRAPHY :? Google
? Wikipedia
? Books
•
on Strategic Management by :
Fred R. David • Ireland, Hoskisson, Hitt • Stephen P. Robbins, Mary Coulter, Neharika Vohra
THANK YOU !!!
doc_565687600.pptx