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Competitor Analysis

Competitor analysis in marketing and


strategic management is an assessment
of the strength and weakness of current
and potential competitors.
Importance of Competitor
Analysis
 Survive
 Handle slow growth
 Exploit opportunities
 Uncover key factor
 Improve quality of decision
 Stay competitive
 Avoid surprises
These Five Questions Must
want to answer Before the ?
Analyze
1. Against whom are we competing?
2. What strength and weakness do they process?
3. What are their objective?
4. What strategies are they pursuing , and how successfulare
they?
5. How are they likely to behave and how are they likely to read
to offensive moves?
Against whom are we competing

OUR Current
company Competitors
Latent
competitors
Against whom are we competing
Competition operating at 4Level
Offering Similar product andservice

Operating similar product andservice

Manufacturing or supplying product that same deliver service


Shop Shop
Shop
Same spending power Shop B C
D
A
Collecting Competitors
Information
Identifying and evaluating Competitors
Strength and Weakness
1. Collecting Information
 Background of Competitor profile
 Sales
 Market Share
 Cost and Profit Level
 Organizational Culture
 Production Process
 Product Quality
 Return on investment and
Analyze
Market
Share of
Competitor
Analyze
Competito
r Strength
Competencies Competitor’s Position
/ Capabilities
Microma Window Appl Samsun Son
x 01 s 02 e 03 g 04 y
05
Product
innovatio
n
Price level

Brand
Recognitio
n
Distributio
n network
After sales
service
Promotion
/public
relatio
n
Identifying and evaluating
Competitors Strength and Weakness
Incorporating Competitor Analysis &
Market Analysis
Porter’s approach to competitive
structure analysis
Bargaining
Threat of
power of
New
customers
Entrants

Rivalry
among
Competitors
Bargaining Substitute
power of Products
suppliers and
Services
Threat
Threat of New Entry of New
Entrants

• the existence of barriers toentry

• brand equity

• switching costs

• capital requirements

• access to distribution

• absolute cost advantages

• government policies
Rivalry
Competitive among
Competitors
R•nuimvbearolfrcoympetitors
•rate of industry growth
•Industry overcapacity
•exit barriers
•diversity of competitors
•informational complexity
•brand equity
•fixed cost allocation per valueadded
•level of advertising expense
Bargaining
Supplier Power power of
suppliers

• supplier switching costs relative to firm


switching costs
• degree of differentiation of inputs
• presence of substitute inputs
• supplier concentration to firm concentration
ratio
• threat of forward integration bysuppliers
relative to the threat of backward integration
by firms
• cost of inputs relative to selling price of the
product
Bargaining
Buyer power of
customers

P• buoyerw
conce
entr
ration to firm concentration ratio
• bargaining leverage
• buyer volume
• buyer switching costs relative to firm switching
costs
• buyer information availability
• ability to backwardintegrate
• availability of existing substitute products
• buyer price sensitivity
• price of total purchase
Substitute
Threat of Substitution Products
and
Services

•Buyer propensity to substitute


•Relative price performance of substitutes
•Buyer switching costs
•Product differentiation
Substitute Products and Services
• Personal Computers
• Dell, HPand Sony along with many others
• Operating system and computer software differentiates Apple
• iPod
• Rio, iRiver, SanDisk, Sony, Phillips and many others
• Louder
• Hard-drive based
• Complementary products
• iPhone
• Blackberry, LG, Samsung, Motorola, Palm,etc.
• Full browser
• iPod
• Only AT&T
Best Competitive Companies
In the World
Comparison of the value-added
Components across
the
Product life cycle
Comparison of the value-added Components across
the Product life cycle
33% 29%

13%
16%
13%
16%
10%
8%
19%
15%

12% 16%

Growth and early Late maturity and


maturity stages decline stages
Competitive Relations
•Conflict
•Competition
•Coexistence
•Cooperation
•Collusion
What Makes a Competitor
Vulnerable (weakness)

 A lack of cash
 Low margin
 Poor growth
 High cost
 Over dependence on one
market
 People problem
Type of Competitors
•The relaxed Competitor-(fail to react)

•The tiger Competitor-(Response quickly)

•The Selective Competitor-


(Chose carefully and strategically)

•Unpredictable Competitor-(difficulty identify)


Competitive
Competitive Advantage
Advantage
At lower CostAdvantage
Cost
Similar Product

“Anything that a firm doesespecially


Competitive
well compared to rivalfirms”
Advantage
Higher
Porters Price
Unique Product
Generic
competitive Differentiation
Strategy Advantage
TC/IS/2011/MS/144
MMT:3093
Strategic Marketing & Planning
Department of Business & Management Studies
Trincomalee Campus
Eastern University - Sri Lanka