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Competitor Analysis

Competitor Analysis. Ted Mitchell. Three Main Topics. 1 Analysis of Industry Strategic Environment 2 Competitive Bench Marking (Comparative) 3 Competitive Advantage. Porter Strategic Forces. Ease of Market Entry and Exit Buyer or Seller Power Bargaining Power Competitive Rivalry

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Competitor Analysis

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  1. Competitor Analysis Ted Mitchell

  2. Three Main Topics • 1 Analysis of Industry Strategic Environment • 2 Competitive Bench Marking (Comparative) • 3 Competitive Advantage

  3. Porter Strategic Forces • Ease of Market Entry and Exit • Buyer or Seller Power • Bargaining Power • Competitive Rivalry • Chicken or Prisoner’s Dilemma

  4. Classic Economic Description of An Industry • Monopoly • Oligopoly • Monopolistic • Pure Competition

  5. Market Definition of Competition • Business seeking to serve the same need in different ways. • All the people who are providing solutions to the people who need a solution are competitors • Hole Industry---Drills, punches presses, flame jets, blow torch, hammers, ….. Etc. • Communication Industry --- Airlines, telegraphs, telephone, stamp, e-mail,

  6. Customer Centered Customer Orientation Product Orientation Industry Orientation Competitor Orientation Yes No No Competitor Centered Yes

  7. Competitive Analysis Identifying Competitors Determining Objectives Identifying Strategies Assessing Strengths/Weaknesses Estimating Reaction Patterns Selecting Those To Attack/Avoid

  8. Competitive Description By Their • Strategies • Objectives • Strengths and Weaknesses (as objective as possible) • Share of Market • Share of Voice • Share of Wallet • Types of Reactions

  9. COMBINING CHOICES INTO FOUR STRATEGY STATEMENTS Current Market New Market Current Product MARKET DEVELOPMENT STRATEGY PENETRATION STRATEGY New Product PRODUCT DEVELOPMENT STRATEGY DIVERSIFICATION STRATEGY TJM

  10. Flanking Market Leader Position Preemptive Counteroffensive Contraction Mobile

  11. Encirclement Market Follower Strategies Flanking Bypass Challenger Strategies Frontal Guerrilla

  12. Game Theory • The Ultimate Model for the Study of Marketing Competition and Competitive Based Strategy

  13. In Most books almost no discussion of • No Game Theory (Kotler is one of the first to apply to marketing) • No policies or plans for reacting to the competitors!

  14. Prisoner’s Dilemma G.M.’s choices of price level Ford’sValues High Low High 3 , 1 , Ford’s choices of price level 4 , 2 , Low

  15. Prisoner’s Dilemma G.M.’s choices of price level G.M.’s Values High Low High 3 , 3 1 , 4 Ford’s choices of price level 4 , 1 2 , 2 Low

  16. Chicken G.M.’s choices of price level Ford’sValues High Low High 3 , 2 , Ford’s choices of price level 4 , 1 , Low

  17. Chicken G.M.’s choices of price level G.M.’s Values High Low High 3 , 3 2 , 4 Ford’s choices of price level 4 , 2 1 , 1 Low

  18. Store Entry Game Do NOT Enter Market New Store Choices Enter The Market Old StoreValues Market Sharing Status Quo Market Sharing 3 , 2 , Old Store choices of Reaction Policies Status Quo Price War 3 , 1 , PriceWar

  19. Store Entry Game Do NOT Enter Market New Store Choices Enter The Market New StoreValues Market Sharing Status Quo Market Sharing 3 , 2 2 , 3 Old Store choices of Reaction Policies Status Quo Price War 3 , 2 1 , 1 PriceWar

  20. Competitive Comparison • Benchmarking • Do it from the Customer’s Point of View • Positioning maps • Competitive Business Analysis • Market Share • Relative price • Marketing Expenses (% of Sales)

  21. Competitive Advantage • Cost Advantage • Better prices and/or margins • Differentiation • Mix has more benefits for customer • Marketing Advantage in • Channel, Sales Force, Product Development etc.

  22. Cost Advantage • Variable Cost (learning curve) • Unit cost (economies of scale) • Marketing Mix Efficiencies (no sales force) • Operating Efficiencies (new plant & equip)

  23. Product Differentiation • Key product benefits • Service benefits • Brand Reputation, Value or Equity

  24. Marketing(Fixed Asset or Structural Advantage) • Channels • Distribution Outlets, Relative Market Share • Sales Force • Hiring Best Grads • Brand Awareness

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