competitive analysis
TRANSCRIPT
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TC/IS/2011/MS/144MMT:3093
Strategic Marketing & PlanningDepartment of Business & Management
StudiesTrincomalee Campus
Eastern University - Sri Lanka
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Competitor Analysis
Competitor analysis in marketing and strategic management is an assessment of the strength and weakness of current and potential competitors.
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Importance of Competitor Analysis
Survive
Handle slow growth
Exploit opportunities
Uncover key factor
Improve quality of decision
Stay competitive
Avoid surprises
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These Five Questions Must want to answer Before the
Analyze?
1. Against whom are we competing?
2. What strength and weakness do they process?
3. What are their objective?
4. What strategies are they pursuing , and how successful are
they?
5. How are they likely to behave and how are they likely to read
to offensive moves?
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Against whom are we competing
Latent competitors
CurrentCompetitors
OUR company
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Against whom are we competingCompetition operating at 4 LevelOffering Similar product and service
Operating similar product and service
Manufacturing or supplying product that same deliver service
Same spending power ShopA
ShopB
ShopC Shop
D
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Collecting Competitors Information
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Identifying and evaluating Competitors Strength and WeaknessBackground of Competitor profile SalesMarket ShareCost and Profit LevelOrganizational CultureProduction ProcessProduct QualityReturn on investment and
01.Collecting Information
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Analyze Market Share of
Competitor
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AnalyzeCompetitor
Strength
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Competencies/ Capabilities
Competitor’s Position
Micromax01
Windows02
Apple03
Samsung04
Sony05
Productinnovation
Price level
Brand Recognition
Distribution network
After sales service
Promotion/public relation
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Identifying and evaluating Competitors Strength and
Weakness
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Incorporating Competitor Analysis & Market Analysis
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Porter’s approach to competitive structure analysis
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Porter’s approach to competitive structure analysis
Threat of New
Entrants
Bargaining power of
customers
Bargaining power of suppliers
Substitute Products
and Services
Rivalry among
Competitors
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Threat of New Entry• the existence of barriers to entry
• brand equity
• switching costs
• capital requirements
• access to distribution
• absolute cost advantages
• government policies
Threat of New
Entrants
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Competitive Rivalry•number of competitors •rate of industry growth •Industry overcapacity •exit barriers •diversity of competitors • informational complexity•brand equity •fixed cost allocation per value added • level of advertising expense
Rivalry among
Competitors
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Supplier Power• supplier switching costs relative to firm
switching costs •degree of differentiation of inputs •presence of substitute inputs • supplier concentration to firm concentration
ratio • threat of forward integration by suppliers
relative to the threat of backward integration by firms • cost of inputs relative to selling price of the
product
Bargaining power of suppliers
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Buyer Power•buyer concentration to firm concentration ratio •bargaining leverage •buyer volume •buyer switching costs relative to firm switching
costs •buyer information availability •ability to backward integrate •availability of existing substitute products •buyer price sensitivity •price of total purchase
Bargaining power of
customers
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Threat of Substitution
•Buyer propensity to substitute •Relative price performance of substitutes •Buyer switching costs •Product differentiation
Substitute Products
and Services
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• Personal Computers• Dell, HP and Sony along with many others• Operating system and computer software differentiates Apple
• iPod• Rio, iRiver, SanDisk, Sony, Phillips and many others• Louder• Hard-drive based• Complementary products
• iPhone• Blackberry, LG, Samsung, Motorola, Palm, etc.• Full browser• iPod• Only AT&T
Substitute Products and Services
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Best Competitive Companies In the World
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Comparison of the value-added
Components across the
Product life cycle
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Growth and early maturity stages
Late maturity and decline stages
0.12 0.16
0.150.19
0.08
0.10.160.13
0.160.13
0.33 0.29
Fixed cost
Variable cost
Administrative costTechnical
Marketing
Profit before tax
Comparison of the value-added Components across the Product life cycle
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Competitive Relations•Conflict
•Competition
•Coexistence
•Cooperation
•Collusion
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What Makes a Competitor Vulnerable (weakness)
A lack of cash Low margin Poor growth High cost Over dependence on one
market People problem
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Type of Competitors•The relaxed Competitor-(fail to react)
•The tiger Competitor-(Response quickly)
•The Selective Competitor-(Chose carefully and strategically)
•Unpredictable Competitor-(difficulty identify)
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Competitive Advantage
Competitive Advantage
Cost Advantage
DifferentiationAdvantage
Similar Product
Unique Product
At lower Cost
Higher PricePorters
Generic competitive
Strategy
Competitive Advantage
“Anything that a firm does especially well compared to rival firms”
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TC/IS/2011/MS/144MMT:3093
Strategic Marketing & PlanningDepartment of Business & Management
StudiesTrincomalee Campus
Eastern University - Sri Lanka