Competitive Analysis, Ing Direct.

Competitive Analysis, ING Direct.

Competitor analysis is an assessment of the strengths and weaknesses of current and potential
competitors. Porter (1980, 1998) argued that most firms do not conduct this type of analysis
systematically enough. Instead, many enterprises operate on what he calls “informal impressions,
conjectures, and intuition gained through the tidbits of information about competitors every
manager continually receives.”
ING’s analysis of its competitors was that they were old fashioned and very conventional. They
want to make the customer spend more, borrow more, pay lower interest and most customers
were unsatisfied and “very critical” of their banks. They have not updated their methods of
banking to a new more modern way of banking.
Arkadi Kuhlmann, founder of IHG was very clear about his goals for IHG “There is no such
business that can’t be reenergized”. With this in mind he planed to get customers to save more,
give them better value with higher interest rates, deal direct via new technologies and create
satisfied customers with no minimum balances, no fees and no service charges.
Reference:
ING Direct. Rebel in the banking industry. Dr. Verwerie and Dr. Van den Berghe. 2007.
www.wikipedia.org
www.INGDirect.com

I agree with Martin in that ING Ditrect has exploited the fact that competitor numbers are small
and that this industry has not changed radically for some time. I have no doubt that Kuhlmann’s
pedigree in the banking sector was proven prior to ING, I also have no doubt that he had
strategic analysis completed on competitors, focusing on the “seven key areas” breaking each
one down using the “five forces model” for competitive forces, using “PEST” for driving forces,
using strategic group maps to show competitive position, identifying competitor strategies then
using all this information to indicate the key success factors and then ascertain how attractive
this new venture would be. But if we remember that ING Direct...

Coca-Cola Competitive Analysis

Coca-Cola (KO) Analysis

Coca-Cola Corporation and its Competitors

Coca-Cola was discovered as a result of an accident. In 1886 a pharmacist named John
Pemberton cooked up medicinal syrup. When he was done, he figured he had created a fine tonic
for people who were tired, nervous, or plagued with sore teeth. He and his assistant mixed it with
ice water, sipped it, and proclaimed it tasty. They wanted some more, and the assistant
accidentally used carbonated water to mix the second batch. Instead of medicine, these men had
created a fizzy beverage - one that is now consumed around the world. Today people guzzle 1
billion drinks a day from the Coca-Cola Company. But this new beverage was not an instant
success. In the first year, Pemberton spent $73.96 promoting his new product but managed to sell
only $50 worth.

"The Coca-Cola Company" is now the largest soft drink company in the world. Every year
800,000,000 servings of just "Coca-Cola" are sold in the United States alone. The company takes
pride in being a worldwide business that is always local. Bottling plants with some exceptions
are locally owned and operated by independent business people who are native to the nations in
which they are located. The company manufactures, distributes and markets non-alcoholic
beverage concentrates and syrups, including fountain syrups. The product includes primarily
carbonated soft drinks, a variety of non-carbonated beverages, juices and juice drinks, and
certain water products, such as Dasani. The company supplies the concentrates and beverage
bases used to make the products and it provides management assistance to help it's bottler's
ensure the profitable growth of their business.

Coca-Cola competes in the nonalcoholic beverages segment of the commercial beverages

industry. Based on available data and a variety of industry sources, the estimate is that in 2004,
worldwide sales of Company products comprised approximately 10 percent of total worldwide
sales of...

Walmart Competitive Analysis

| | |
| | |

|[Wal-mart case analysis]

|
|Competitive advantage and competitive dynamics
|
 What might explain Wal-Mart’s performance over time in discount retailing? Is it the industry
or company specific factors?

|Post Second World War, the style of style of retailing in the US evolved into discount
merchandizing. At the time, Wal-Mart was quick enough to ride the tide and develop an overall
cost leadership model that |
|allowed it to emerge as a leader in the market in the discount retailing space.
|

Wal-Mart’s performance driven by overall cost leadership

Wal-Mart’s strategy over time helped it establish leadership position in discount retailing. It used
rural underserved markets to announce its arrival. It also used innovation levers, customer
centricity, positioning as a low cost player, and effective stakeholder management including
employees, suppliers, and stockholders to achieve distinctive competitive advantage. It
successfully outperformed other firms in the industry leveraging its strategy to achieve overall
cost leadership.

The experience curve concept and was successfully adopted by Wal-Mart. The various levers it
used to achieve cost leadership included,

|Achieving economies of scale |Rapidly expand geographical footprint as well

as number of stores, variety of stores, and store sizes...

Competitive Analysis
Eastman Kodak: Meeting the Digital Challenge

Issue: The main issue behind this case is the problems faced by the Eastman Kodak Company in
the process of changing to Digital technology in printing. It failed to establish market share and
market leadership in the Digital sector.

Summary: George Eastman began the commercial manufacture of a new type of dry
photographic plate in 1880 in order to reduce the risk regarding with the old technical photo
graphic plates. In 1884 he developed silver halide paper based photographic film and 1888 he
developed the first fully portable camera. With these two photographic became a leisure activity
for the people. On October 24, 1901 the company name changed to the Eastman Kodak
Company.
Their main strategy was to provide a fully integrated photographic service supplying the camera
and film through to processing and printing. They attracted the people with their advertising
slogan "You push the button, we do the rest". Eastman Kodak came to dominate the world
market for photographic film, photographic paper and chemicals, and low cost cameras.
Eastman established seven basic business principles for Kodak in order to achieve success.
Mass Production at low cost
International distribution
Extensive advertising
A focus on the customer
Fostering growth and development through continuing research
Treating employees in a fair, self- respecting way
Reinvesting profits to build and extend the business

Kodak continued to build its dominant position in market with vertical integration combined
with continuous innovation and product development.

In 1970s they faced stiff competition from Japanese in camera industry and Fuji photo Film
Company in film.
Fuji was become a main competitor through sponsorship of 1984 Olympic games in Los
Angeles.
In 1980s they faced so many hic-cups like they forced to withdrawal in instant photography and
some of...

Competitor Analysis
In formulating business strategy, managers must consider the strategies of the firm's competitors.
While in highly fragmented commodity industries the moves of any single competitor may be
less important, in concentrated industries competitor analysis becomes a vital part of strategic
planning.

Competitor analysis has two primary activities, 1) obtaining information about important
competitors, and 2) using that information to predict competitor behavior. The goal of competitor
analysis is to understand:

• with which competitors to compete,

• competitors' strategies and planned actions,
• how competitors might react to a firm's actions,
• how to influence competitor behavior to the firm's own advantage.

Casual knowledge about competitors usually is insufficient in competitor analysis. Rather,

competitors should be analyzed systematically, using organized competitor intelligence-
gathering to compile a wide array of information so that well informed strategy decisions can be
made.

Competitor Analysis Framework

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

Objectives and assumptions are what drive the competitor, and strategy and capabilities are what
the competitor is doing or is capable of doing. These components can be depicted as shown in
the following diagram:

Competitor Analysis Components

What the competitor is doing
What drives the competitor
or is capable of doing
Objectives Strategy
 Competitor
Response Profile

Assumptions Resources
& Capabilities

Adapted from Michael E. Porter, Competitive Strategy, 1980, p. 49.

A competitor analysis should include the more important existing competitors as well as
potential competitors such as those firms that might enter the industry, for example, by extending
their present strategy or by vertically integrating.

Competitor's Current Strategy

The two main sources of information about a competitor's strategy is what the competitor says
and what it does. What a competitor is saying about its strategy is revealed in:

• annual shareholder reports

• 10K reports
• interviews with analysts
• statements by managers
• press releases

However, this stated strategy often differs from what the competitor actually is doing. What the
competitor is doing is evident in where its cash flow is directed, such as in the following tangible
actions:

• hiring activity
• R & D projects
• capital investments
• promotional campaigns
• strategic partnerships
 • mergers and acquisitions

Competitor's Objectives

Knowledge of a competitor's objectives facilitates a better prediction of the competitor's reaction

to different competitive moves. For example, a competitor that is focused on reaching short-term
financial goals might not be willing to spend much money responding to a competitive attack.
Rather, such a competitor might favor focusing on the products that hold positions that better can
be defended. On the other hand, a company that has no short term profitability objectives might
be willing to participate in destructive price competition in which neither firm earns a profit.

Competitor objectives may be financial or other types. Some examples include growth rate,
market share, and technology leadership. Goals may be associated with each hierarchical level of
strategy - corporate, business unit, and functional level.

The competitor's organizational structure provides clues as to which functions of the company
are deemed to be the more important. For example, those functions that report directly to the
chief executive officer are likely to be given priority over those that report to a senior vice
president.

Other aspects of the competitor that serve as indicators of its objectives include risk tolerance,
management incentives, backgrounds of the executives, composition of the board of directors,
legal or contractual restrictions, and any additional corporate-level goals that may influence the
competing business unit.

Whether the competitor is meeting its objectives provides an indication of how likely it is to
change its strategy.

Competitor's Assumptions

The assumptions that a competitor's managers hold about their firm and their industry help to
define the moves that they will consider. For example, if in the past the industry introduced a
new type of product that failed, the industry executives may assume that there is no market for
the product. Such assumptions are not always accurate and if incorrect may present
opportunities. For example, new entrants may have the opportunity to introduce a product similar
to a previously unsuccessful one without retaliation because incumbant firms may not take their
threat seriously. Honda was able to enter the U.S. motorcycle market with a small motorbike
because U.S. manufacturers had assumed that there was no market for small bikes based on their
past experience.

A competitor's assumptions may be based on a number of factors, including any of the

following:

• beliefs about its competitive position

• past experience with a product
• regional factors
• industry trends
 • rules of thumb

A thorough competitor analysis also would include assumptions that a competitor makes about
its own competitors, and whether that assessment is accurate.

Competitor's Resources and Capabilities

Knowledge of the competitor's assumptions, objectives, and current strategy is useful in

understanding how the competitor might want to respond to a competitive attack. However, its
resources and capabilities determine its ability to respond effectively.

A competitor's capabilities can be analyzed according to its strengths and weaknesses in various
functional areas, as is done in a SWOT analysis. The competitor's strengths define its
capabilities. The analysis can be taken further to evaluate the competitor's ability to increase its
capabilities in certain areas. A financial analysis can be performed to reveal its sustainable
growth rate.

Finally, since the competitive environment is dynamic, the competitor's ability to react swiftly to
change should be evaluated. Some firms have heavy momentum and may continue for many
years in the same direction before adapting. Others are able to mobilize and adapt very quickly.
Factors that slow a company down include low cash reserves, large investments in fixed assets,
and an organizational structure that hinders quick action.

Competitor Response Profile

Information from an analysis of the competitor's objectives, assumptions, strategy, and

capabilities can be compiled into a response profile of possible moves that might be made by the
competitor. This profile includes both potential offensive and defensive moves. The specific
moves and their expected strength can be estimated using information gleaned from the analysis.

The result of the competitor analysis should be an improved ability to predict the competitor's
behavior and even to influence that behavior to the firm's advantage.