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Competitor

Analysis
Objectives
Learn how to understand competitors as
well as customers via competitor
analysis.
Learn the fundamentals of competitive
marketing strategies based on creating
value for customers.
Realize the need for balancing customer
and competitor organizations in order to
become a truly market-centered
organization.
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Inctel
Has dominated the Heavy focus on
chip industry product and
Success is directly advertising innovation
related to Intel’s and R&D investments
competitive Changing market
strategy needs have
Strategy focuses challenged Intel to
on superior value adapt
and product Intel is capitalizing on
leadership the Internet now
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Definition

Competitive Advantage
 An advantage
over competitors
gained by offering
consumers greater
value than
competitors offer.

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Definition

Competitive Analysis
 The process of identifying key
competitors; assessing their
objectives, strategies, strengths
and weaknesses, and reaction
patterns; and selecting which
competitors to attack or avoid.

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Figure 18-1:
Stepsin
Analyzing
Competitors

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Competitor
Analysis Firms face a wide
Steps in the
range of competition
Process:
Be careful to avoid
Identifying “competitor myopia”
Competitors Methods of
Assessing identifying
Competitors competitors:
Selecting  Industry
Competitors to point-of-
Attack or Avoid view
 Market
point-of- 18- 7
230-year-old
Encyclopedia
Britannica
viewed itself as
competing with
your publishers
of printed
encyclopedias.
Big mistake! Its
real competitors
were software
encyclopedias
and the Internet.
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Figure 18-2:
Competitor
Map

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Competitor
Analysis Determining
Steps in the competitors’ objectives
Process: Identifying competitors’
strategies
Identifying  Strategic groups
Competitors Assessing
Assessing competitors’ strengths
Competitors and weaknesses
 Benchmarking
Selecting Estimating
Competitors to competitors’ reactions
Attack or Avoid
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Competitor
Analysis Strong or weak
Steps in the competitors
Process:  Customer
value analysis
Identifying Close or
Competitors distant

competitors
Assessing
Most companies
Competitors compete against close
Selecting competitors

Competitors to “Good” or
“Bad”
Attack or Avoid competitors
The existence of
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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
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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
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Figure 18-3:
Hypothetica
l Market
Structure

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Competitive
Strategy Expanding the total
Competitive demand
Positions  Finding new users
 Discovering and
promoting new product
Market Leader uses
 Encouraging greater
Market product usage
Challenger Protecting market
 share
Market 
Many considerations
Follower Continuous innovation
Expanding
 market
Market Nicher share
Profitability rises with
market share 18- 15
Competitive
Strategy
WD-40 has a knack
for developing new
uses for its product.
What other brands
have adopted a
similar strategy?

WD40

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Competitive
Strategy Option 1: challenge the
Competitive market leader
Positions  High-risk but high-gain
 Sustainable competitive
Market Leader advantage over the
leader is key to success
Market Option 2: challenge firms
Challenger of the same size, smaller
size or challenge
Market regional or local firms
Follower Full frontal vs. indirect
attacks
Market Nicher
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Pepsi is an
example of
market
challenger
that has
chosen to use
a full frontal
attack

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Competitive
Strategy Follow the market
Competitive
leader
Positions
 Focus is on improving
profit instead of
Market Leader market share
Market  Many advantages:
Challenger  Learn from the
market leader’s
Market experience
Follower  Copy or improve on
the leader’s offerings
Market Nicher  Strong profitability

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Dial Corporation
successfully
uses a market
follower strategy

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Competitive
Strategy Serving market
Competitive niches means
Positions targeting
subsegments
Market Leader Good strategy for
Market small firms with
limited resources
Challenger Offers high margins
Market Specialization is key
Follower  By market,
Market Nicher customer, product, or
marketing mix lines
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Balancing Customer
and Competitor
Orientations
Companies can become so
competitor centered that they
lose their customer focus.
Types of companies:
 Competitor-centered
companies
 Customer-centered companies
 Market-centered companies
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Game
playing
a.industry
Nintendo
a. Wii hyperlink
b. Microsoft
a. Xbox 360
c. Sony
a. Play Station

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18- 10

Discussion
Question
Create a competitor
map for one of the
following:
• WalMart
• McDonald’s
• Nike
• Starbucks
• Google