Chapter Three

Competitor Analysis
2007 7 John Wiley y & Sons

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Chapter 3 - Competitor Analysis

PPT 3-1

Competitor Identification
Customer-Based Approaches
Customer C choices What brand would you buy if f your favorite was unavailable? Application A li ti associations i ti What Wh t applications? li ti ? What brands for each application? What product substitutes?

Chapter 3 - Competitor Analysis

2007 7 John Wiley y & Sons

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Competitor Identification
Strategic Groups
Pursue similar competitive strategies Have similar characteristics Have similar assets and competencies

Chapter 3 - Competitor Analysis

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Competitor Analysis

Potential Competitors
Market expansion Product expansion Backward integration
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Forward integration Export assets or competencies Retaliatory or defensive strategies

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Chapter 3 - Competitor Analysis

Understanding g the Competitors p

Image and Positioning

Size, Growth & Profitability Strengths and Weaknesses Exit Barriers

Objectives and Commitment

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Competitor p Actions

Current and P t St Past Strategies t i

Organization and Culture Cost Structure

Chapter 3 - Competitor Analysis

Figure 3.3

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Identify Assets and Competencies

1) What businesses have been successful over time? What Wh t assets t or competencies t i contributed t ib t d to their success?
2007 7 John Wiley y & Sons

What businesses have had chronically low performance? Why? What assets or competencies do they lack?
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Chapter 3 - Competitor Analysis

Relevant Assets and Competencies

2) What are the key customer motivations? What is really y important to the customer? 3) What are the large mobility barriers (both entry and exit)?

Chapter 3 - Competitor Analysis

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Relevant Assets and Competencies

4) Consider the components of the value chain. Do any provide the potential to generate a competitive titi advantage? d t ?

Chapter 3 - Competitor Analysis

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The Value Chain

Suppor rt Activitie es Firm Infrastructure Human Resource Management Technology Development Procurement
Marketing & Sales

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Inbound Outbound Operations Logistics Logistics

Service

Primary Activities
Source: Reprinted with permission 1985 Michael Porter PPT 3-9

Chapter 3 - Competitor Analysis

Key Learnings
Competitors can be identified by customer choice (the set from which customers select) or by clustering them into strategic groups 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 C tit should h ld b be analyzed l d along l several l di dimensions, i i including l di th their i size, i 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 y strategic g information. key

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Chapter 3 - Competitor Analysis

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Ancillary Slides A ill Slid

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Chapter 3 - Competitor Analysis

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Induce your competitors not to invest in those products, markets and d services i where h you expect t to t invest the most that is the fundamental role of strategy.
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- Bruce Henderson Founder of BCG

Chapter 3 - Competitor Analysis

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There is Th i nothing thi more exhilarating than to be shot at without result. - Winston Churchill
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Chapter 3 - Competitor Analysis

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The best and fastest way to learn a sport is to watch and imitate a champion. - Jean-Claude J Cl d Killy, Kill Skier
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Chapter 3 - Competitor Analysis

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There is Th i one rule l for f industrialists i d t i li t and that is: Make the best quality of goods possible at the lowest cost possible, paying the highest wages possible. - Henry Ford
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Chapter 3 - Competitor Analysis

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We often give our enemies the means for our own destruction. destruction - Aesop

Chapter 3 - Competitor Analysis

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In business, the competition will bite you if you keep running, if you stand still, they will swallow you. - William Knudsen
2007 7 John Wiley y & Sons
Chapter 3 - Competitor Analysis

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