Week 5

Competitor Analysis

Hospitality Marketing
Nur Agustinus
 Hypothetical
Market Structure
Direct Competitors
Indirect Competitors
“Indirect competitors offer the same stuff but have a
different goal. They don’t drive revenue the same way.”
 Forces that drive down prices
• Many sellers
• Stagnant or declining industry
• Firms have different costs
• Excess capacity
• Undifferentiated products
• Large/infrequent sales orders
• Strong exit barriers
• Prices/terms of sale unobservable
• Prices cannot be adjusted quickly
• Organizations always
operate within a
competitive industry
environment. They do not
exist in vacuum.
• Analyzing an organization’s
competitors helps an
organization to discover its
weaknesses, to identify
opportunities for and
threats to the organization
from the industrial
environment.
 Steps of Competitor Analysis
The following are the steps to be conducted for carrying
out a Competitor Analysis:
• Step 1: Identify Potential Competitors
• Step 2: Carry out a through Competitor Profiling
• Step 3: Understand Competitors’ Strategies
• Step 4: Analysis of Strengths and Weaknesses against
Competitors
• Step 5: Assess Market Attractiveness
• Step 6: Analyze Sources of Competitive Advantage
• Step 7: Design Competitive Strategies
 Market-based Analysis
• the competition faced by companies has been
classified based on the degree of product
substitution in the following categories:
• Brand Competition
• Industry Competition
• Product Competition
• Generic Competition
 Bases of Competition
I. Customer-oriented
Who they are – competition for same budget
When they use it
Why they use it- benefits sought
II. Marketing-oriented: advertising and promotion
Theme/copy strategy
Media
Distribution
Price
III. Resource-oriented
Raw materials
Employees
Financial resources
IV. Geographic
 Category Factors

• Threat of new entrants

• Bargaining power of buyers
• Bargaining power of suppliers
• Current category rivalry
• Pressure from substitutes
• Category capacity
Assessing Competitor’s Strategies
Marketing mix
 Competitor Information to Collect

• Ability to produce
• Ability to market
• Ability to finance
• Ability to manage
 Competitor Analysis

Steps in the • Firms face a wide range

Process: of competition
• Be careful to avoid
Identifying “competitor myopia”
Competitors
• Methods of identifying
Assessing
competitors:
Competitors
– Industry point-of-view
Selecting
– Market point-of-view
Competitors to
Attack or Avoid • Competitor maps
can help
 Competitor Analysis

Steps in the • Determining competitors’

objectives
Process:
• Identifying competitors’
Identifying strategies
– Strategic groups
Competitors
• Assessing competitors’
Assessing strengths and weaknesses
Competitors – Benchmarking
Selecting • Estimating competitors’
Competitors to reactions
Attack or Avoid
 Competitor Analysis

Steps in the • Strong or weak competitors

– Customer value analysis
Process:
• Close or distant competitors
– Most companies compete
Identifying against close competitors
Competitors
• “Good” or “Bad” competitors
Assessing – The existence of competitors
Competitors offers several strategic benefits
Selecting
Competitors to
Attack or Avoid
 Creating
Competitive Advantage
 Definition

• Competitive Advantage
– An advantage
over competitors
gained by offering consumers
greater
value than
competitors offer.
18- 20
 Competitive Strategies
• Basic Winning Competitive
Strategies: Porter
– Overall cost leadership
• Lowest production and
distribution costs
– Differentiation
• Creating a highly
differentiated product line
and marketing program
– Focus
• Effort is focused on serving
a few market segments
18- 22
 Competitive Strategies
• Basic Competitive Strategies:
Value Disciplines
– Operational excellence
• Superior value via price and convenience
– Customer intimacy
• Superior value by means of building strong
relationships with buyers and satisfying
needs
– Product leadership
• Superior value via product innovation

18- 23