TC/IS/2011/MS/144MMT:3093

Strategic Marketing & PlanningDepartment of Business & Management

StudiesTrincomalee Campus

Eastern University - Sri Lanka

Competitor Analysis

Competitor analysis in marketing and strategic management is an assessment of the strength and weakness of current and potential competitors.

Importance of Competitor Analysis

Survive

Handle slow growth

Exploit opportunities

Uncover key factor

Improve quality of decision

Stay competitive

Avoid surprises

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?

Against whom are we competing

Latent competitors

CurrentCompetitors

OUR company

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

Collecting Competitors Information

Identifying and evaluating Competitors Strength and WeaknessBackground of Competitor profile SalesMarket ShareCost and Profit LevelOrganizational CultureProduction ProcessProduct QualityReturn on investment and

01.Collecting Information

Analyze Market Share of

Competitor

AnalyzeCompetitor

Strength

Competencies/ Capabilities

Competitor’s Position

Micromax01

Windows02

Apple03

Samsung04

Sony05

Productinnovation

Price level

Brand Recognition

Distribution network

After sales service

Promotion/public relation

Identifying and evaluating Competitors Strength and

Weakness

Incorporating Competitor Analysis & Market Analysis

Porter’s approach to competitive structure analysis

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

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

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

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

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

Threat of Substitution

•Buyer propensity to substitute •Relative price performance of substitutes •Buyer switching costs •Product differentiation

Substitute Products

and Services

• 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

Best Competitive Companies In the World

Comparison of the value-added

Components across the

Product life cycle

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

Competitive Relations•Conflict

•Competition

•Coexistence

•Cooperation

•Collusion

What Makes a Competitor Vulnerable (weakness)

A lack of cash Low margin Poor growth High cost Over dependence on one

market People problem

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)

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”

TC/IS/2011/MS/144MMT:3093

Strategic Marketing & PlanningDepartment of Business & Management

StudiesTrincomalee Campus

Eastern University - Sri Lanka