Zongshen Assignment Melvin

Intra-industry Analysis

1. Understand and assess the competitors in the motorcycle

industry – Strategic groups

2. Further assess the competitors -

3. Segmentation - Market, Customer and Product

Strategic Group Analysis - Who are our current and potential

competitors?

A strategic group is a group of firms in an industry following

the same or similar strategy

Identifying strategic groups:

– Identify principal strategic variables which distinguish

firms

– Position each firm in relation to these variables

– Identify clusters.

Relevant dimensions

Market scope (product and geographical)

Choice of distribution channels

Level of product quality and/or price

Degree of vertical integration

Choice of technology

Governance

What to do with strategic groups

Use it to better understand the industry

– Range of strategies developed up to now

Use it to anticipate possible movements from one group to

another

– Depends on intergroup barriers and on group profitability

Use it to formulate a strategy

– Select a strategic group

– Reinforce barriers and improve profitability of own group

– Migrate

– Exploit a void

Broad

Product Range

NarrowLow HighPrice

Prem ium Specialist Harley-Davidson BM W

Piaggio VespaAprillia Ducati KTM

M oderate Price Broad Line Honda Kawasaki Suzuki Yam aha

Low Price M oderate LineHero Lifang Baja

Loujia Dayun Haojiang

Low Price SpecialistAlligator M odenasJingcheng Stallions

Low Price Broad LineZongshen Loncin JiansheJialing Qianjiang Sachs

Competitor Analysis - What are they doing? Where are they

strong/weak?

Porter’s 5 Forces provide a global and abstract appraisal of

competition

In order to survive in a competitive environment, a much more

precise knowledge is required

Competitor analysis is a vital task:

– Performed on a continuous basis by everyone in the firm

Its aim:

– To acquire extensive information about competitors

– To predict their behavior

Competitor Objective

Financial goals or market goals?

Market share oriented firms are more aggressive

– Ex: US vs. Japanese electronics firms

– Ex: Coca-Cola, P&G

Good present performance: strategy to continue

Unsatisfactory present performance: strategy likely to change

Competitor Assumption

Assumptions converge to create « industry recipes ».

Industry recipes can create « blind spots »

– Ex: Big 3 US auto manufacturers & small cars

Result: fastest growing segment of US auto market was ceded to

foreign producers

Segmentation Analysis - Which products, markets, customers…are the

most attractive?

Products, Customers, Markets…

Competition occurs at a localized level, within specific

product groups and at specific national or regional levels

– A finer look is necessary industry segmentation

Different segments:

– Different attractiveness and rules of the game

– Different key success factors

– Different competitors (to some extent)

Stages in Segmentation Analysis

Is the product a commodity?

– Commodities indicate weak segments

– “usually…”

Identify key segmentation variables

Analyze segment attractiveness (5F)

Identify the segment’s KSF’s

Identify the most attractive segments!!!!