Industry%20Dynamics%20

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Industry Dynamics Competitive Analysis
If you are ignorant of both your enemy and
yourself,then you are a fool and certain to be
defeated in every battle. If you know yourself,
but not your enemy,for every battle won, you
will suffer a loss. If you know your enemy and
yourself, you will win every battle. Sun Tzu
The Art of War
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Industry Competitive Analysis
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Five Forces Examples

• New Market Entrants
• entry ease/barriers
• geographical factors
• incumbents resistance
• new entrant strategy
• routes to market

• Buyer Power
• buyer choice
• buyers size/number
• change cost/frequency
• product/service importance
• volumes, JIT scheduling

• Competitive Rivalry
• number and size of firms
• industry size and trends
• fixed vs variable cost bases
• product/service ranges
• differentiation, strategy

• Supplier Power
• brand reputation
• geographical coverage
• product/service level quality
• relationships with customers
• bidding processes/capabilities

• Product and Technology Development (Substitutes)
• alternatives price/quality
• distribution shifts
• fashion and trends
• legislative effects

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Competitive Intensity Factors

• Competitors are numerous and roughly of equal
  size and power
• Industry growth is slow
• Exit barriers are high
• Rivals are highly committed to the business
• Firms cant read each others signals
• Price competition is high due to
• Lack of product differentiation
• High fixed costs / low variable costs
• Capacity must be expanded in large increments
• The product is perishable

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Competitor Analysis

• Summary of Current Competitors
• Listing by market share ranking (by each target
  market if possible)
• Current Competitors - full analysis of top
  competitors including
• Products Services (e.g., description,
  uniqueness, pricing, etc.)
• Market share
• Current segments and target customers
• Positioning and promotion strategies
• Partnerships/Alliances/Distributors
• Recent news
• Potential Competitors
• Explanation (though not as detailed as Current
  Competitors) on who they are or maybe and why
  they are seen as potential competitors
• SWOT Analysis - Strengths, Weaknesses,
  Opportunities Threats

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SWOT

• Opportunities areas of buyer need in which your
  company can operate profitability
• Categorized by attractiveness and probability of
  success
• Key determinants
• size and growth rate
• price sensitivity
• fit with companys core competencies
• competitive advantage over other players

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SWOT

• Threats challenges posed by unfavorable trends
  or developments that have the potential to cause
  deterioration in sales or profits
• Categorized by seriousness and probability of
  occurrence
• Examples
• Competitor develops a superior product
• Major prolonged economic recession
• Union labor action increases costs
• Regulation / legislation increases cost or
  litigation

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SWOT
Opportunities
High Low
High Speculative Business Troubled Business
Low Ideal Business Mature Business
Threats
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SWOT

• Strengths
• Advantages of proposition
• Competitive advantages
• USP's (unique selling points)
• Resources, Assets, People, Intellectual Property
• Experience, knowledge, data
• Financial reserves, likely returns
• Marketing - reach, distribution, awareness
• Innovative aspects
• Location and geographical
• Price, value, quality
• Accreditations, qualifications, certifications
• Processes, systems, IT, communications
• Cultural, attitudinal, behavioural
• Philosophy and values

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SWOT

• Weaknesses
• Disadvantages of proposition
• Gaps in capabilities
• Lack of competitive strength
• Reputation, presence and reach
• Financials
• Own known vulnerabilities
• Timescales, deadlines and pressures
• Cashflow, start-up cash-drain
• Continuity, supply chain robustness
• Effects on core activities, distraction
• Reliability of data, plan predictability
• Morale, commitment, leadership
• Accreditations
• Processes and systems
• Management

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Strategic Group A companys closest competitors
are those pursuing the same target markets with
the same strategies
Product/Market Battlefield Map
Products/ Segments Primary Schools Commercial /Industrial Hospitals/ Institutional
Fire Detection GE Honeywell Local suppliers Tyco Honeywell GE Tyco Honeywell UT
Security Systems ADT Local suppliers ADT ADT Honeywell
Access Control Sensormatic Software House Casi-Rusco Lenel Tyco Honeywell Johnson Controls
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Strategic Groups Where do your competitors fit
on a matrix of key strategic dimensions?
Fire / Life Safety Systems Competitors
High Tyco Honeywell
Medium Regional Systems Integrators Chub GE Johnson Controls UT
Low Local Suppliers ADT
Low Medium High
Quality/ Complexity
Vertical Integration