Chapter Three

2007 John Wiley & Sons

Competitor Analysis

Copyright 2007 John Wiley & Sons, Inc. All rights reserved. Reproduction or translation of this work beyond that permitted in
Section 117 of the 1976 United States Copyright Act without the express written permission of the copyright owner is unlawful.
Requests for further information should be addressed to the Permissions Department, John Wiley & Sons, Inc. The purchaser
may make back-up copies for his/her own use only and not for distribution or resale. The Publisher assumes no responsibility
for errors, omissions, or damages, caused by the use of these programs or from the use of the information contained herein.

Chapter 3 - Competitor Analysis

PPT 3-1

Competitor Identification

2007 John Wiley & Sons

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?

Chapter 3 - Competitor Analysis

PPT 3-2

Competitor Identification

2007 John Wiley & Sons

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

Chapter 3 - Competitor Analysis

PPT 3-3

Competitor Analysis

Potential Competitors
Market expansion
Product expansion

2007 John Wiley & Sons

Backward integration
Forward integration
Export assets or competencies
Retaliatory or defensive strategies

Chapter 3 - Competitor Analysis

PPT 3-4

Understanding the Competitors

2007 John Wiley & Sons

Size,
Size,Growth
Growth
&&Profitability
Profitability
Strengths
Strengthsand
and
Weaknesses
Weaknesses

Image
Imageand
and
Positioning
Positioning

Competitor
Competitor
Actions
Actions

Exit
ExitBarriers
Barriers

Chapter 3 - Competitor Analysis

Cost
CostStructure
Structure

Figure 3.3

Objectives
Objectivesand
and
Commitment
Commitment
Current
Currentand
and
Past
PastStrategies
Strategies
Organization
Organization
and
andCulture
Culture

PPT 3-5

Identify Assets and Competencies

1) What businesses have been successful over
time?

2007 John Wiley & Sons

What assets or competencies contributed

to their success?
What businesses have had chronically low
performance?
Why?
What assets or competencies do they lack?

Chapter 3 - Competitor Analysis

PPT 3-6

Relevant Assets and Competencies

2007 John Wiley & Sons

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)?

Chapter 3 - Competitor Analysis

PPT 3-7

Relevant Assets and Competencies

Consider the components of the value chain.
Do any provide the potential to generate a
competitive advantage?

2007 John Wiley & Sons

4)

Chapter 3 - Competitor Analysis

PPT 3-8

Firm Infrastructure
Human Resource Management

ar
gi
n

Technology Development
Procurement
Inbound
Outbound
Operations
Logistics
Logistics

Chapter 3 - Competitor Analysis

Marketing
&
Sales

Service

n
gi
ar
M

2007 John Wiley & Sons

Support Activities

The Value Chain

Primary Activities
Source: Reprinted with permission 1985 Michael Porter

PPT 3-9

 2007 John Wiley & Sons

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.

Chapter 3 - Competitor Analysis

PPT 3-10

 2007 John Wiley & Sons

Ancillary Slides

Chapter 3 - Competitor Analysis

PPT 3-12

 2007 John Wiley & Sons

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.

Chapter 3 - Competitor Analysis

- Bruce Henderson
Founder of BCG

PPT 3-13

There is nothing more

exhilarating than to be shot at
without result.

2007 John Wiley & Sons

- Winston Churchill

Chapter 3 - Competitor Analysis

PPT 3-14

The best and fastest way to learn

a sport is to watch and imitate a
champion.

2007 John Wiley & Sons

- Jean-Claude Killy,
Skier

Chapter 3 - Competitor Analysis

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.
2007 John Wiley & Sons

- Henry Ford

Chapter 3 - Competitor Analysis

PPT 3-16

We often give our enemies the

means for our own destruction.

2007 John Wiley & Sons

- Aesop

Chapter 3 - Competitor Analysis

PPT 3-17

In business, the competition will

bite you if you keep running, if you
stand still, they will swallow you.

2007 John Wiley & Sons

- William Knudsen

Chapter 3 - Competitor Analysis

PPT 3-18