Competitor Analysis and Competitive Position

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Competitor Analysis and Competitive Position
Market-oriented strategic planning is the
managerial process of developing and maintaining
a viable fit among the organizations objectives,
skills, and resources and its changing market
opportunities. Kotler 2001
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Planning Actions

• Strategic planning calls for action in three key
  areas
• Managing the companys businesses as an
  investment portfolio
• Assessing strengths by considering market
  characteristics and the companys position and
  fit in that market
• Developing a game plan for achieving long-term
  objectives
• Adapted from Kotler 2001

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Three Competitive Forces that Shape Competitive
Position and Profitability
1. Industry Forces Attractiveness of the
competitive environment 2. Competitor
Benchmarking Strength vs competition 3. Competi
tive Advantage Inherently desirable
characteristics that are sustainable
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Figure 6.1, Competitive Forces That Shape
Competitive Position and Profitability
1.1 2.1 3.1 1.2 2.2 3.2 1.3 2.3 3.3
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Industry Forces Market Entry/Exit (1.1)
1.1 Market Entry/Exit 1.2. Buyer/supplier
Power 1.3. Substitutes/Rivalry

• Market Barriers to Entry

• Market Barriers to Exit

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Industry Forces Buyer/Supplier Power (1.2)
1.1 Market Entry/Exit 1.2 Buyer/supplier
Power 1.3 Substitutes/Rivalry

• Customer Buying Power

Supplier Selling Power
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Industry Forces Substitutes/Rivalry (1.3)
1.1 Market Entry/Exit 1.2 Buyer/supplier
Power 1.3 Substitutes/Rivalry
Product Substitutes (broad market definition)

• Competitive Rivalry

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1. Industry Forces and Profit Potential
Industry Forces Unfavorable Favorable 1.1
Barriers to Entry 1 2 3 4 5 6 7 Political,
Technology, Resources 1.1 Barriers to Exit
1 2 3 4 5 6 7 Legal, Specialized assets,
Strategic importance 1.2 Customer Buying
Power 1 2 3 4 5 6 7 of customers, Purchase
quantities, Ease of switching sellers 1.2
Supplier Power 1 2 3 4 5 6 7 Level of
switching costs, Degree of customer franchise,
of suppliers 1.3 Substitutes 1 2 3 4 5 6 7
1.4 Competitive Rivalry 1 2 3 4 5 6 7
of competitors, Level of differentiation, Degree
of excess capacity
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Competitor BenchmarkingCompetitor Intelligence
(2.1)
2.1 Competitor Intelligence 2.2 Competitor
Analysis 2.3 Competitive Benchmarking
Competitor Benchmarking Competitor Analysis
(2.2)

• Competitor Intelligence
• Market-based performance
• Operating performance

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Perceptual Map
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Competitive Vulnerability MatrixAttitudes and
Purchase Intentions
  Attitudes towards Competitors A B C D
Purchase Intentions   Competitor
A .4458 -.2470 -.1015 -.1717   Competitor
B -.1623 .7249 -.2353 -.2504   Competitor
C -.1039 -.1175 .7715 -.1643   Competitor
D -.2948 -.3193 -.1980 .6644  
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Competitor Benchmarking Competitive
Benchmarking (2.3)
2.1 Competitor Intelligence 2.2 Competitor
Analysis 2.3 Competitive Benchmarking

• Benchmarking
• Identify key area of competitive weakness
• Identify benchmark company
• Track the benchmark companys process advantage

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Competitor Benchmarking Priority/Performance
Matrix

 1.09   1.06   1.03   1.00   .97   .94   .91
  .88   .85
Quality Equip 2 3 14
Parts Inventory 3 2 4 1
Equipment Price 4 32 1
Parts Price 3 4 2 1
Repair Service 2 3 1 4
Resale Value 3 2 1 4
Salespeople 4 23 1
.85 88 .91 .94 .97 1.00 1.03 1.06 1.09 1.12
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Competitive Advantage Cost Advantage (3.1)

• Variable Costs
• Scale Effect
• Scope Effect
• Learning effects (Experience Curve)

• Marketing Expenses
• Line extensions
• Family branding
• Advertising size

• Operating Expenses
• Standardization
• Technology

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Competitive Advantage Quality Advantage (3.2)

• Avenues for Differentiation
• Product Advantage
• Service Advantage
• Reputation Advantage

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Competitive Advantage Marketing Advantage (3.3)

• Sales Force Advantage
• Brand Awareness