Chapter Three: Competitor Analysis

Chapter Three
Competitor Analysis
2007 John Wiley & Sons
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Chapter 3 - Competitor Analysis
PPT 3-1
Competitor Identification
Customer-Based Approaches
Customer choices What brand would you buy if your favorite was unavailable? Application associations What applications? What brands for each application? What product substitutes?
PPT 3-2
Competitor Identification
Strategic Groups
Pursue similar competitive strategies Have similar characteristics Have similar assets and competencies
PPT 3-3
Competitor Analysis
Potential Competitors
Market expansion
Product expansion
Backward integration
Forward integration
Export assets or competencies

Retaliatory or defensive strategies
PPT 3-4
Understanding the Competitors

Image and Positioning
Size, Growth & Profitability
Objectives and Commitment
Strengths and Weaknesses

Exit Barriers
Competitor Actions
Current and Past Strategies
Organization and Culture

Cost Structure
Figure 3.3
PPT 3-5
Identify Assets and Competencies

1) What businesses have been successful over time? What assets or competencies contributed to their success?
What businesses have had chronically low performance? Why? What assets or competencies do they lack?
PPT 3-6
Relevant Assets and Competencies
2) What are the key customer motivations? What is really important to the customer? 3) What are the large mobility barriers (both entry and exit)?
PPT 3-7
Relevant Assets and Competencies

4) Consider the components of the value chain. Do any provide the potential to generate a competitive advantage?
PPT 3-8
The Value Chain

Support Activities Firm Infrastructure Human Resource Management Technology Development Procurement
Marketing & Sales
Inbound Outbound Operations Logistics Logistics
Service
Primary Activities
Source: Reprinted with permission 1985 Michael Porter PPT 3-9
Key Learnings
Competitors can be identified by customer choice (the set from which customers select) or by clustering them into strategic groups, (firms that pursue similar strategies and have similar assets, competencies, and other characteristics). In either case, competitors will vary in terms of how intensely they compete. Competitors should be analyzed along several dimensions, including their size, growth and profitability, image, objectives, business strategies, organizational culture, cost structure, exit barriers, and strengths and weaknesses. Potential strengths and weaknesses can be identified by considering the characteristics of successful and unsuccessful businesses, key customer motivations, and value-added components. The competitive strength grid, which arrays competitors or strategic groups on each of the relevant assets and competencies, provides a compact summary of key strategic information.
PPT 3-10
Ancillary Slides
PPT 3-12
Induce your competitors not to invest in those products, markets and services where you expect to invest the most that is the fundamental role of strategy.
- Bruce Henderson Founder of BCG
PPT 3-13
There is nothing more exhilarating than to be shot at without result. - Winston Churchill
PPT 3-14
The best and fastest way to learn a sport is to watch and imitate a champion. - Jean-Claude Killy, Skier
PPT 3-15
There is one rule for industrialists and that is: Make the best quality of goods possible at the lowest cost possible, paying the highest wages possible. - Henry Ford
PPT 3-16
We often give our enemies the means for our own destruction. - Aesop
PPT 3-17
In business, the competition will bite you if you keep running, if you stand still, they will swallow you. - William Knudsen
PPT 3-18

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Chapter Three

Chapter 3 - Competitor Analysis

Chapter 3 - Competitor Analysis

2007 John Wiley & Sons

Chapter 3 - Competitor Analysis

2007 John Wiley & Sons

Export assets or competencies

Chapter 3 - Competitor Analysis

Understanding the Competitors

Size, Growth & Profitability

Objectives and Commitment

2007 John Wiley & Sons

Strengths and Weaknesses

Current and Past Strategies

Organization and Culture

Chapter 3 - Competitor Analysis

Identify Assets and Competencies

Chapter 3 - Competitor Analysis

Relevant Assets and Competencies

Chapter 3 - Competitor Analysis

2007 John Wiley & Sons

Relevant Assets and Competencies

Chapter 3 - Competitor Analysis

2007 John Wiley & Sons

The Value Chain

2007 John Wiley & Sons

Inbound Outbound Operations Logistics Logistics

Chapter 3 - Competitor Analysis

2007 John Wiley & Sons

Chapter 3 - Competitor Analysis

- Bruce Henderson Founder of BCG

Chapter 3 - Competitor Analysis

Chapter 3 - Competitor Analysis

2007 John Wiley & Sons

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