© Noel Capon, 2016. All rights reserved.

PRESENTATION 5 OF 26 / 1

CHAPTER 5

Insight about Competitors,

Company, and
Complementers
OPENING CASE: BOEING AND AIRBUS
 Insight about Competitors,
Company, and Complementers
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Key Topics
• Competitors
• cannot do
• will not do
• will be disadvantaged if they do what
I am doing
• Complementers
• Any organization whose actions affect firm sales
 Competitors
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Identify: Who Are Our Competitors Today?

Who Will They Be Tomorrow?
• Direct and indirect competition
• Threat framework
• Intrafirm competition(departmental competition)
 Identify Competitors
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Direct and Indirect Competition

Direct competitors: Target similar customers to the firm by offering
similar benefits and values with similar products, technology, and/or
business models.
Indirect competitors: Target the same customer with similar benefits
and values, but with different products, technology, and/or business
models.
 Identify Competitors
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Direct and Indirect Competition

Direct Indirect

• American • Regional • Southwest • Amtrak • Telephone • Video conferencing

Airlines airlines Airlines • Fax • Electronic
• Delta • jetBlue communications
 Identify Competitors
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Threat Framework – identifies four categories; firm can prioritize threats

III= 3 V=5 VII=7 VIII=8 IV=4 VI=6 I=1 II=2 VI=6
 Describe Competitors
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• What competitor data should the firm collect?

• Level of data (corporate, business unit, market, market segment)
• Type of data (quantitative, Qualitative)
• What sources of competitive data are available?
• Secondary data
• Primary data
 Describe Competitors
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Frameworks to Describe Competitors

Organization
• Culture
• Infrastructure
Strengths & Vulnerabilities
• Processes
• Assets
• Capabilities and Firm in the Environment
competencies • Value chain
• Alliances and
special relationships
Mind-Set • Networks
• Assumptions

Current Strategy

Performance

Source: L. Fahey, Outwitting, Outmaneuvering and

Outperforming Competitors, New York: Wiley, 1999 Future Strategy
 Describe Competitors
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The Value Chain

Infrastructure

Supporting Human resource management

activities
Product and process development
Procurement
Primary Inbound Outbound Sales and
Production Service
activities logistics logistics marketing
 Describe Competitors
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The Value Chain

• Where does the competitor have a cost advantage?
• Where is the competitor at a cost disadvantage?
• Where does the competitor have a value advantage?
• Where is the competitor at a value disadvantage?

© Noel Capon, 2016. All rights reserved.
Illustration
Indicators
Hired new customer service manager
Reorganized customer support and service (CSS)
CSS now reports to VP of marketing (versus
sales)
Initiating new training programs for sales force
Emphasizes customer service in advertising
CEO comments: “Customers expect quality in
services as well as in the product”
Customer to our salesperson: “ABC is now doing
things for us they never did before”
Describe Competitors
PRESENTATION 5 OF 26 / 11
Inferences
Competitor is going to upgrade service quality
Initial confirmation of alerting signal
Signals increased importance of service
Enhancing service for all key customer segments
Service seen as valuable to attract, retain, and
grow customers
Service is becoming part of the competitor’s
mind-set — will be institutionalized
Confirms competitor is institutionalizing and
leveraging service
 Evaluate Competitors
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Competitive Assessment Analysis

Customer Necessary Capabilities / Resources
Requirements: Importance C
needs, benefits, Rank
Efficient Good Just-in-Time Well-Funded Access to
values B Manufacturing Distribution Delivery R&D Low Cost
A System System Systems Materials
Easy product
availability
1 * *
Low prices 2 * *
Low inventories 3 *
Access to
cutting-edge 4 *
technology
Etc.
 Evaluate Competitors
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Three Questions
• Relevance — Do we have the capability/resource?
• Superiority — Is our capability/resource superior to competition?
• Sustainability — Would it be difficult for competitors to catch up with
us?
 Evaluate Competitors
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Competitive Assessment Analysis

Customer Necessary Capabilities / Resources
Requirements: Importance C
needs, benefits, Rank
Efficient Good Just-in-Time Well-Funded Access to
values B Manufacturing Distribution Delivery R&D Low Cost
A System System Systems Materials
Easy product
availability
1 * YN * YYY
Low prices 2 * YN * YYN
Low inventories 3 *N
Access to
cutting-edge 4 * YYN
technology
Etc.
 The Meaning of the Entries
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YYY. The firm has a sustainable differential

advantage. Firm capabilities/resources match
customer needs/benefits or values; they are
superior to the competitor; it would be
difficult for the competitor to catch up.
• YYN. Firm capabilities/resources match
customer needs/benefits or values; the firm
has an advantage, but the competitor could
match the firm relatively easily.
• YN. Firm capabilities/resources match
customer needs/benefits or values, but are no
better than the competitor.
• N. The firm has a significant weakness or gap.
The competitor completing a similar analysis
would likely show a YYY and have its own
differential advantage.
 Project Competitors
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Scenarios
• Scenario types
• Emergent scenarios: Start with the competitor’s current strategy and
consider what might emerge.
• Unconstrained scenarios: Based on open-ended what-if questions that
suggest possible end states. Like what will happen if?
• Constrained scenarios: What-if scenarios that ask how the competitor
may act under different market and/or industry conditions. What will
happen if the market/industry change?
 Manage Competitors
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Signaling
• Preemptive signals
• My company provide signals to competitors.
• suggests how competitors should behave

• Tit-for-tat signals
• Every action has an equal and opposite reaction
• prohibits competitor gains; matches action

• Warning signals
• Don’t increase your market share over 3%
• preannounces response to possible competitor actions

• Misinformation
• send competitors misleading information
© Noel Capon, 2016. All rights reserved. PRESENTATION 5 OF 26 / 18

CHAPTER 5

Insight about Competitors,

Company, and Complementers