Competitive Analysis

1
Competitive Analysis

• Dawn Iris Calibo
• Ph.D.-T.M.
• Cebu Technological University-Moalboal Campus

2
What is Competitive Analysis?
-the process by which a company attempts to
define and understand its industry, identify its
competitors, determine the strengths and
weaknesses of its rivals, and anticipate their
moves. (Zahra ,et.al., 1993)
3

The analysis also offers management a forum
where they can discuss and evaluate their
assumptions about the organizations
capabilities, market, position and competitors.
It also helps them to select viable strategies
that will strengthen the organizations market
position.
4

Therefore, competitive analysis serves as the
foundation for the process of strategy
formulation in the organization.
5

Competitive analysis forms part of the broader
process of strategic analysis is an investigation
into the external and internal environment of an
organization. The organization needs to consider
industry and competitive conditions, and
determine its own competitive capabilities,
resources, internal strengths, weaknesses and
market position when formulating a strategy.
Competitive analysis has specifically to do with
the external environment of an organization
(Abraham, 2006 55)
6
Figure 1. A Strategic Analysis Model
7
A Strategic Analysis Model

• The external environment is shaped by five
  forces
• economic forces
• social, cultural, demographic and environmental
  forces
• political, governmental and legal forces
• technological forces, and
• competitive forces.

8
Competitive analysis aims to provide an in-depth
understanding of the competitive forces that are
to be found within any given organizations
competitive environment. It will attempt to
understand an organizations industry, its
competitive position within it, the prerequisites
for survival and prosperity and the nature of
competition and of the market process
(Oxenfeldt,et.al.,1981). Understanding ones
competitive environment is very important,
because the very essence of formulating
competitive strategy is relating a company to its
environment (Porter, 1980).
9
A framework for competitive analysis

• The following are included in the oversight of
  the framework associated with competitive
  analysis (Prescott, 1987)
• Setting objectives
• This is the first phase in the process and is
  aimed at setting the scene. This phase will
  influence all the other phases and should be
  well-defined. The primary purpose is to create a
  clear understanding about the type and scope of
  the analysis that is to be conducted. An
  important part of this understanding relates to
  the possible constraints that might be .

10

• Data collection
• There is a wealth of information available
  about the business environment and numerous
  techniques have been developed to acquire the
  relevant information. The modern trend is for
  organizations to develop their own specialized
  skills in information collection, ranging from
  database systems to interviews to physical
  observations. The key to this stage is to fit the
  right collection techniques to the objectives of
  the analysis.

11

• Data interpretation
• Once the relevant data has been collected it
  needs to be analyzed and interpreted before the
  results can be used or implanted. There are
  numerous techniques available to use when seeking
  answers to all the questions. It is therefore
  very important to fit the right technique to the
  right situation.

12

• Implementation of the findings
• This is a neglected area of competitive
  analysis and many practitioners are still guilty
  today of ignoring good intelligence and making
  decisions by trusting their instincts.
  Communicating the results of the analysis process
  to the key decision-maker is very important.
  Unless the results are incorporated in the
  decision-making process, there was no reason to
  undertake the analysis in the first place.

13

• Updating and maintaining the system
• Certain analyses are done on an individual
  basis, while others are done on a continual
  basis. These individual assignments do not need
  any updating or maintenance, while the others do
  require it. Where continual assignments are
  concerned, there must be a strong degree of
  formality and frequency of when updating must be
  done. The initial objectives of the analysis
  process must play a primary role in this
  decision.

14
Summary

• This report indicates that the relationship
  between competitive analysis and the process of
  strategy formulation constitutes a very complex
  subject. Considering the variety of concepts, it
  is clear that a thorough understanding of the
  technique is needed if it is to be successfully
  applied as management tool to help attain the
  companys goals and objective.

15
(No Transcript)