Chapter 4 Copetitor Analysis

5/28/2018 Chapter 4 Copetitor Analysis

1/15

2005JohnWiley&

Sons

Competitor Analysis PPT 4-1

Competitor Analysis

Chapter Four

Copyright 2005 John Wiley & Sons, Inc. All rights reserved. Reproduction or translation of this work beyond that permitted in

Section 117 of the 1976 United States Copyright Act without the express written permission of the copyright owner is unlawful .

Requests for further information should be addressed to the Permissions Department, John Wiley & Sons, Inc. The purchaser

may make back-up copies for his/her own use only and not for distribution or resale. The Publisher assumes no responsibility

for errors, omissions, or damages, caused by the use of these programs or from the use of the information contained herein.


2/15

2005JohnWiley&

Sons


Competitor Analysis

Second Phase of External Analysis

Goal: Insights that will influence the

product-market investment decision or the

effort to obtain and maintain an SCA.

Focus: Threats, Opportunities, or

Strategic Uncertainties created by

emerging or potential competitor moves,

weaknesses, or strengths.


3/15

2005JohnWiley&

Sons


Identifying Competitors

Customer-Based Approaches

Direct vs. Indirect What choices are customers making?

Product-Use Associations


4/15

2005JohnWiley&Sons


Identifying Competitors

Strategic Groupsmakes analysiscompact, feasible, and more usable

Pursue similar competitive strategies (e.g.,same distribution channel, samecommunication strategies, same

price/quality position) Have similar characteristics (e.g., size,aggressiveness)

Have similar assets and competencies


5/15

2005JohnWiley&Sons


Competitor Analysis

Potential Competitors

Market expansion

Product expansion

Backward integrationcompetitivecustomers

Forward integrationcompetitive

suppliers

Export assets or competencies

mergers/acquisitions

Retaliatory or defensive strategies


6/15

2005JohnWiley&Sons


Benefits of Competitor Analysis

Understanding current competitors strategicstrengths and weaknesses can suggestopportunities and threats that will merit aresponse.

Insights into future competitor strategies mayhelp predict future opportunities and threats.

Decisions about strategic alternatives mighthinge on the ability to forecast likely reaction of

key competitors. May help identify strategic uncertainties that willbe worth monitoring over time.


7/15

2005JohnWiley&Sons


Understanding the Competitors

Objectives and

Commitment

Image and

PositioningSize, Growth

& Profitability

Current and

Past StrategiesStrengths and

Weaknesses

Cost Structure

Exit Barrriers Organization

and Culture

Competitor

Actions

Figure 4.3


8/15

2005JohnWiley&Sons


Relevant Assets and Competencies

1)What businesses have been successful over

time?

What assets or competencies contributed

to their success?

What businesses have had chronically low

performance?

Why?

What assets or competencies do they lack?

Figure 4.4


9/15

2005JohnWiley&Sons


2) What are the key customer motivations?

What is really important to the customer?

3) What are the large value-added parts of the

product or service?

What are the large cost components?


Figure 4.4


10/15

2005JohnWiley&Sons


4) Consider the components of the value chain.

Do any provide the potential to generate a

competitive advantage?


Figure 4.4


11/15

2005JohnWiley&Sons


The Value Chain

Firm InfrastructureHuman Resource Management

ProcurementTechnology Development

&

Source: Reprinted with permission 1985 Michael PorterFigure 4.5

Support

A

ctivities

Primary Activities

Procurement

InboundLogistics

Operations OutboundLogistics

MarketingSales

Service

Human Resource ManagementFirm Infrastructure


12/15

2005JohnWiley&Sons


Checklist of Strengths and

Weaknesses (see p. 72)

Innovation

Manufacturing

FinanceAccess to

Capital

Management

Marketing

Customer Base


13/15

2005JohnWiley&Sons


Competitive Strength Grid

(see p. 75)

Identify relevant assets and competencies.

Scale your firm and the major competitors orstrategic groups of competitors on those assets

and competencies An SCA is almost always based on having aposition superior to that of the target competitorsin one or more asset or competence area that is

relevant to the industry and strategy employed. A competency that all competitors have will not

be the basis for an SCA.


14/15

2005JohnWiley&Sons


Obtaining Information on

Competitors

Competitors Website Strategic vision

Values and culture

Portfolio of businessesclue to priorities and strategies

Assets such as plants, global access, brand symbols

Search Engines for articles and financials

Databases

Directories

US Government Reports

Trade associations, magazines, and meetings Technical meetings and Journals

Marketing Research


15/15

2005JohnWiley&Sons


Key Learnings

Competitors can be identified by customer choice (the set from whichcustomers select) or by clustering them into strategic groups, (firms that

pursue similar strategies and have similar assets, competencies, and other

characteristics). In either case, competitors will vary in terms of how

intensely they compete.

Competitors should be analyzed along several dimensions, including theirsize, growth and profitability, image, objectives, business strategies,

organizational culture, cost structure, exit barriers, and strengths and

weaknesses.

Potential strengths and weaknesses can be identified by considering the

characteristics of successful and unsuccessful businesses, key customer

motivations, and value-added components.

The competitive strength grid, which arrays competitors or strategic

groups on each of the relevant assets and competencies, provides a

compact summary of key strategic information.

Chapter 4 Copetitor Analysis

Documents

copetitor analysis

competencies5282018

similar assets

relevant assets

similar competitive

samecommunication strategies

similar characteristics

john wiley sons