COMPETITOR ANALYSIS AND GROWTH OF MARKET SHARE.

CASE STUDY: THE SAROVA STANLEY HOTEL, NAIROBI.

A RESEARCH REPORT SUBMITTED TO THE SCHOOL OF BUSINESS

AND MANAGEMENT IN PARTIAL FULFILMENT FOR THE AW ARD

OF A DEGREE OF BACHELORS OF INTERNATIONAL BUSINESS

ADMINISTRATION OF

KAMP ALA INTERNATIONAL UNIVERSITY

BY

MWANGI CHRISTOPHER KELVIN.

BIB/ 7186/52/DF

December 2008

DECLARATION

I, Mwangi Christopher Kelvin declare that this research report is my original work and

has never been submitted to any university for any award. Where.the works of others

have been made, acknowledgment has been made.

~ : Signature ............................. .

Mwangi Christopher Kelvin.

(BIBA candidate.)

03/ ,~l ~cog · Date .................................. .

APPROVAL

I certify that the work of this candidate has been under my supervision and is now ready

for submission, to be evaluated for the award of a Bachelor of International Business

Administration of Kampala Internation

Supervisor.~ Date.-~-'~\.\~\.~~- ........ .

Mr. Michael Ruteganda.

BBA (Accounting) USA, MSc (Finance) UK, A.C.I.S.

II

DEDICATION.

To the Almighty God for his divine favor. My Parents Mr. and Mrs. James Mwangi to

my sister Jacky (University of Central Missouri, USA), my cousin Kiprop Chirchir, Sales

and Marketing Team at The Sarova Stanley, Ms. Roselyne Nduati and my by BEST

Lecturer Mr. Michael Ruteganda.

Ill

ACKNOWLEDGEMENT.

I would like to thank GOD the almighty for strength, guidance and divine favour that he

has bestowed upon me through my study.

I would like to express my heartfelt gratitude to my

who have supported me morally and financially. Their prayers and dedication to my

success have helped me through this work.

I would like to thank the Sales and Marketing team at the Sarova Stanley particularly

Ms.Roselyne Nduati, the Sales Manager for being my first mentor in the corporate world

as well as guiding me when I was collecting information to be used for market

intelligence at the Sarova Stanley.

Last but not least I would like to offer my appreciation to Mr. Michael Ruteganda for

being my BEST lecturer in my entire course as well as guiding me through out my work

by explaining the areas where I needed clarification, Many thanks.

iv

ACRONYMS.

TSS The Sarova Stanley

V

TABLE OF CONTENTS.

DECLARATION ..................................................................................... .i APPROVAL ....................................................................................... ... .ii DEDICATION ............................................................... ........................ iii AC:KN"OWLEDGEMENT ......................................................................... .iv ACRONYMS .......................................................................................... v TABLE OF CONTENTS ............................................................................ vi LIST OF TABLES .................................................................................. .ix LIST OF FIGURES ................................................................................... x ABSTRACT .......................................................................................... xi

CHAPTER 1

1.0 INTRODUCTION ..................................................................... . 1

1.1 BACKGROUND OF THE STUDY ................................................. .l

l.2STATEMENT OF THE STUDY ..................................................... 2

1.3 PURPOSE OF THE STUDY .......................................................... 2

1.4 OBJECTIVE OF THE STUDY ....................................................... 2

1.5 RESEARCH QUESTIONS ............................................................ 3

1.6 SCOPE OF THE STUDY .............................................................. 3

1. 7 SIGNIFICANCE OF STUDY .................................................. 4

l.8LIMITATION OF THE STUDY ..................................................... .4

1.9 CONCEPTUAL FRAME WORK ..................................................... 5

CHAPTER2.

2.0LITERATURE REVIEW .................................................................. 6

2.1 INTRODUCTION .......................................................................... 6

2.2 COMPETITOR ANALYSIS ............................................................. 6

2.3 COMPETITION IN THE MICRO ENVIRONMENT ............................... 9

2.4COMPETITION IN THE MACRO ENVIRONMENT ............................ .10

2.5 STEPS INVOLVED IN ANALYSING COMPETITION .......................... 10

2.6IDENTIFYING THE COMPANY'S COMPETITORS ............................ 10

vi

2.7DETERMINING COMPETITOR OBJECTIVES .................................. 12

2.8IDENTIFYING COMPETITOR STRATEGIES .................................... 13

2.9 .ASSESING COMPETITORS' STRENGTH AND WEAKNESSES ............ 14

2.10 ESTIMATING COMPETITOR REACTIONS .................................... 15

2.11 SELECTING COMPETITORS TO ATTACK AND TO AVOID .............. 15

2.12 ETHICAL ISSUES IN COLLECTING MARKETING INFORMATION TO

BE USED IN COMPETITOR ANALYSIS ........................................ 17

2.13 STEPS TAKEN BY COMPANIES IN IMPROVING THE QUALITY OF

ITS COMPETITOR ANALYSIS ................................................... 18

2.14 MARKET SHARE ..................................................................... 18

3.

3.0 METHODOLOGY .................................................................... 19

3.1 INTRODUCTION ..................................................................... 19

3.2 GEOGRAPHICAL BACKGROUND OF THE AREA OF STUDY .......... .19

3.3 RESEARCH DESIGN ................................................................ 19

3.4 STUDY POPULATION ............................................................. .19

3.5 SAMPLE SIZE AND SAMPLE DETERMINATION ............................ 19

3.6 DATA COLLECTION METHODS AND INSTRUMENTS ................... 20

3.7 QUESTIONNAIRES .................................................................. 20

3.8 ORAL INTERVIEWS ................................................................ 20

3.9 GROUPS DISCUSSIONS ............................................................ 20

3.IODATA PROCESSING AND ANALYSIS ......................................... 20

CHAPTER4

4.0 DATA ANALYSIS .................................................................... 22

4.1 INTRODUCTION ..................................................................... 22

4.2 BACKGROUND INFORMATION ................................................ 22

4.3 TSS FACT SHEET ......................................................................................... 23

4.4 THE SAROV A STANLEY COMPETITOR HOTELS .......................... 26

4.5 MARKET I RACK RA TES .......................................................... 28

vii

4.6 MEAL AND CONFERENCE RA TES ............................................. 29

4.7 INCENTIVE PROGRAMS BY TSS COMPETITORS .......................... 30

4.8 UNIQUE PRODUCTS ................................................................ 31

CHAPTERS

5.0 SUMMARY, CONCLUSION AND RECOMMENDATION ........................... 34

5.1 INTRODUCTION .............................................................................. 34

5.2 SUMMARY OF THE FINDINGS ........................................................... 34

5.3 THE PRACTICE OF ANALYSING COMPETITORS AT TSS ........................ 35

5.4 CHALLENGES IN COLLECTING INFORMATION TO BE USED FOR

COMPETITOR ANALYSIS .......................................... 35

5.5 DOES TSS COMPETITORS CONDUCT COMPETITOR ANALYSIS ............... 36

5.6 EFFECTS OF CONDUCTING COMPETITOR ANALYSIS ON THE GROWTH OF

TSS MARKET SHARE ................................................ 37

5.7 CONCLUSIONS ............................................................................... 37

5.8 RECOMMENDATIONS ..................................................................... 38

5.9 DESIGNING A COMPETITIVE INTELLIGENCE SYSTEM ......................... 38

5.10 OTHERRECOMMENDATION ............................................................ 39

5.11 AREAS FOR FURTHER STUDIES ..................................................... .

REFERENCES ....................................................................................... .

APPENDIX I: ................................................ RESEARCH QUESTIONNAIRE

APPENDIX II: ............................................................................. BUDGET

APPENDIX III: ...................................................................... WORK PLAN

APPENDIX IV: ........................................................... CIRRICULUM VITAE

APPENDIXV: ........................................................................... THE MAP

APPENDIX VI: ................. INTRODUCTION FROM THE UNIVERSITY.

viii

LIST OF TABLES.

Table 1. Response Rate.

Table 2. Main Feature of competitor hotels.

Table 3. Market/ Rack Rate ofTSS competitors.

Table 4. Meal and Conference rates.

Table 5. Incentives Programs by TSS competitors.

Table 6. Unique products by TSS competitors.

ix

LIST OF FIGURES.

Figure.1 The conceptual Frame Work.

Figure.2 Steps involved in analyzing competitors.

Figure.3 A graph illustration of the response rate

Figure.4 graphs illustration of the main features of competitor hotels.

Figure.5 A graph illustration of the market Rack rates ofTSS competitors.

Figure.6 graph illustration of meal rates and Conference rates.

X

ABSTRACT

Every corporate organization has its missions and goals well defined and clear on its

radar screen, and for this mission and goals to

paramount.

achieved strategic management is

For this reason, analyzing competition cannot be overlooked since it's vital in an

organization strategic management. Any organization can clearly identify itself with the

industry in which it plays in, and identifying itself within an industry means that an

organization is not the only one that offers products and services in a particular industry

there are other players as well.

Competitor analysis was designed by management gurus(Michael Porter and Phillip

Kotler) as an important exercise that was purely meant to look at what other players in

the industry are up to and to position an organization by developing competitive

advantages. By analyzing competitors a company maps out their competitive advantages

and disadvantages and look at what makes competitors tick.

This project seeks to identify competitor analysis practice in organizations with particular

interest at the Sarova Stanley Hotel in Nairobi. The hotel is among the leading five star

hotels in Kenya and that tells one how competitive the environment of Nairobi town is

since it's the hub of commercialization and important meetings which are held in big

hotels such as the Sarova Stanley.

The study was conducted from the period of June to August 2008, during this time the

researcher was doing three months internship, and this gave him a better understanding of

competitor analysis.

1.

1.0 INTRODUCTION.

The study focuses on the effects of conducting competitor analysis on the growth of

an organizations market share. Competitor analysis is an important part of the strategic

planning process where an organization benchmarks on their competitors to know their

competitive advantages or disadvantages. On the other hand, market share refers to an

organizations portion of customers, clients or consumers in a particular region or

environment.

1.1 BACKGROUND OF THE STUDY.

Analyzing competition is a day to day practice that happens either consciously or

unconsciously in our lives. The practice of analyzing competition in organizations trace its

roots to strategic management approach developed by various scholars such as Michael

Porter and Phillip Kotler. Porter believed that organizations need to keep an eye on their

competitors and track their moves so that they are not caught unaware by the latest

happenings in the competitive environment.

Many organizations went forth and embraced the idea of analyzing competitors and have

continually used this practice up to date to ensure they are aware of what the competition is

upto.

Competitor analysis has had a great impact on organizations strategic management

including the growth of market share. After analyzing competition and knowing what

competitive advantage or disadvantage they have got, a company goes on to strategically

position itself in the market by offering customer value. Customer value in this sense

1

means company's developing unique product or anything that will gain the competitive

advantage over its competitors.

By developing competitive advantages a company stands at a higher chance to increase

sales and thus the growth of market share and that's why this research is being conducted.

In this work the researcher is looking at the impact competitor analysis has on an

organizations market share. The researcher is particularly interested at The Sarova Stanley

Hotel, A leading five star hotel in the heart of Kenya's capital, Nairobi. Sarova Stanley is a

pioneer hotel of the Sarova Group of Hotels in Kenya and it has been in existence since

1902. The Sarova Stanley as well as the Sarova Group of hotel boasts of their theme which

is 'Refreshing African Hospitality.'

1.2STATEMENT OF THE PROBLEM.

In the recent past, the scope on the global scene shows that many companies conduct

competitor analysis only to copy what their competitors are doing, thus creating a flood

of the same kind of products and services being offered in the market. Although some

companies analyze competition to come up with a unique product and services, not all

companies follow the same trend and partly that explains why many companies in the

same industry offer similar products and services.

A preliminary survey indicated that most companies in the same industry do not offer

any unique product or services that gain them a competitive advantage to the

competitors, which the researcher considered inadequate for a competitive business

environment. It is only unfortunate however that there was no detailed study that has

been carried out to examine the competitor analysis and growth of an organizations

market share.

1.3 PURPOSE OF THE STUDY.

2

The purpose of this study is to explore in details the effects of conducting competitor

analysis on the growth of market share at the Sarova Stanley hotel.

1.4 OBJECTIVE OF THE STUDY.

11 To examine the effects of competitor analysis on the growth of market share.

11 To identify effective and efficient ways of conducting competitor analysis.

11 To realize ways of having competitive advantage over the competitors.

11 To identify the reasons why companies conduct competitor analysis.

1.5 RESEARCH QUESTIONS.

• Who are a company's competitors?

• What are their objectives?

• What are their strategies?

• What are their strengths and weaknesses?

• What are their reaction patterns?

1.6SCOPE OF STUDY.

The study was limited to The Sarova Stanley hotel in the department of Sales and

Marketing. The aim of the study was to establish the effects of analyzing competitors

in increasing the organizations market share.

1. 7 SIGNIFICANCE THESTUDY

The findings of the study are expected to benefit the following;

3

researcher.

a) Findings are going to be used for future research work.

b) The study will be beneficial for partial fulfillment of the requirements for the award

of the degree of bachelors of international business environment.

To organization.

The study will help the organization realize the effect competitor analysis has on the

growth of an organizations market share.

To potential managers.

The study will be a source of reference on how to employ clear strategies

1.8LIMITATION OF STUDY

• Uncooperative respondents who were unwilling to give information in honesty and

trust. This gave misleading information which was unreliable to the completion of this

research project.

• Low level of transparency and accountability in the hotel and tourism industry was

also a hindering or an obstacle to the research. In the Hotel and tourism industry many

organizations preferred to maintain secrecy of the information in order to enhance

competitive advantage.

• Financial constraints, due to costs associated with research the researcher was not in

the position to cater for the research in an effective manner and he will be forced to

minimize the costs even though they study area is crucial.

4

CONCEPTUAL FRAMEWORK.

The conceptual framework consists of three main part; the Independent variables which

predict control, influence and determine the dependent variable. In addition we also

have the intervening variables through which the independent variable may influence

the dependent variable. This can be illustrates with the aid of a diagram as shown

below;

Figure. 1 Conceptual frame work.

Independent Variable

l Intel'venir Variables. Dependent Variable.

l Competitor • Benchmarking . Growth of Market

Analysis share.

• Purchasing competitor products

• Competitors ~

~ .. company reports.

• Customer Value Analysis.

~

............. ---.. -······································

5

CHAPTER 2.

2.0 LITERATURER REVIEW

2.1 INTRODUCTION

The chapter reviews the available literature by various scholars and researchers the

literature reviewed covers the major area covered in the objectives of the study.

2.2 COMPETITOR ANALYSIS.

Competitor analysis is simply the process of gathering and analyzing available public

information about the activities and plans of competitors. Data used to study the

competitors come from a variety of internal sources such as research firms, newspapers,

magazines, government reports, employees of a company ( like engineers, service

personnel and purchasing agents.)

A firm's representative can regularly buy competitors products to know the new products

and its contents so that they work towards out competing such a product.

In an effort to please current and potential customers, internet and websites are used

where companies place information concerning items like price, of their products,

suppliers, and distributors name and new product information. This gives an insight of

where the company is heading and competing companies mostly base on such

information given on the website to know the competitive strategy to use.

6

According to Phillip Kotler competitor analysis is the process of identifying key

competitors: assessing their objectives, strategies, strengths and weaknesses and their

reaction pattern and selecting which competitors to attack or avoid.

Kotler goes further to say that that what companies therefore need to ask themselves who

are our competitors? What are their objectives? What are their strategies? What are their

strengths and weaknesses? What is their reaction pattern? The figure below clearly shows

the major steps in analyzing competitors.

Figure 2. Steps involved in analyzing competition.

Identifying the company's competitors.

l Determining the competitor's

objectives.

l Identifying the competitor's

strategies.

l Assessing the competitor's

strength and weakness.

l Estimating the competitor's

reaction.

i Selecting competitors to

attack and to avoid.

7

Michael R. Solomon's (2003) refers to competitor analysis as the process of acquiring

publicly available information about rivals. He states that sources of the publicly

available information include; News media, the internet, publicly available governments

documents such as building permits and patent grants.

Successful competitor analysis means that the company learns more about the

competitors:

a) New Products.

b) It's manufacturing.

c) Management systems of its executives.

Having this information ready at hand the management can go forth and develop Superior

marketing Strategies.

David L. Kurtz (1989) in his work pointed out that for one to understand competitor

analysis, one has to look at the competitive environment. Competitive environment according

to him is an interactive place that occurs in the market place among marketers of the directly

competitive products, Marketers of the product that can be substituted for one another, and

among marketers competing for the consumer purchasing power.

Marketing decisions by individual firm influences consumer responses in the market place.

They also affect the marketing strategies of competitors, as a consequence says Kurtz are that

marketers must continually monitor marketing activities i.e. Products, channels, prices and

promotional efforts.

Kurtz brings out three types of competition a market faces, namely;

a) Markets with similar products.

b) Products that can be substituted for another. In this case it should be noted therefore

that in instances in which a change such as price increase or an improvement in

product strength occurs, demand for subtle products is highly affected.

c) Among all organizations that compete for consumer purchases.

8

According to Kurtz all marketers have come to accept that all firms compete for a limited

amount of discretionary power.

Its important to observe the competitive environment because it often determines the success

or failure of a product, marketers must continually asses competitor marketing strategy; New

products offerings with technological advances, price reductions, special promotions, or

other competitive variations must be monitored and the firms marketing mix may require

adjustments with which to counter this changes. It should be observed that among the first

purchasers of any new product are the products competitors.

E Jerome McCarthy on the other hand refers to competitive environment as the number and

types of the competitors the marketing manager must face and how they may behave.

2.3 COMPETITION IN THE MICRO ENVIRONMENT.

Competition in the micro environment according to Michael R. Solomon (2003) means the

product alternatives from which members of a target market may choose and we think of

these choices in three levels.

Discretionary income. At a broader level, marketers compete for customer's discretionary

income. This is money people have left after paying for necessities such as housing, utilities,

food and clothing. Thus the first part of understanding who the competition 1s, means

understanding the alternative consumers consider for their discretionary income.

Product competition. This refers to a situation in which competitors offering different

product attempt to satisfy the same consumer needs and wants.

Brand competition. Brand competition is a situation in which competitors offering similar

goods and services vie for consumer's dollars. Firms compete on brand basing on their brand

reputation. Or perceived benefits.

9

2.4 COMPETITION IN MACRO ENVIRONMENT.

Michael R. Solomon (2003) marketers need to understand the bigger picture that is the

overall structure in the industry. Four different structure describe differing amounts of

competition.

Monopoly. It's a market situation in which one firm the supplier of a particular product, is

able to control the price, quality and supply of the product.

Oligopoly. It's a market structure in which a relatively small numbers of sellers each

holding a substantial share of the market compete in market with may buyers.

Monopolistic competition. It's a market structure in which many firms, each having

slightly different products offer unique consumer benefit. They always have a small shore in

the market.

A perfect competition. It's a market structure where many small sellers all who offer similar

products are unable to have an impact on quality, price or supply of a product. An example is

of the agricultural products.

2.5 STEPS INVOLVED IN ANALYSING COMPETITION.

Phillip Kotler in his work about competitor analysis observed three six main steps in

analyzing competitors, this steps have been diagrammatically been represented in FIG. I thee

stages involved include;

2.6 IDENTIFYING THE COMP ANYS COMPETITORS.

Normally it would seem like a simple task for a company to identify its competitors. At the

narrowest level, company's can identify its competitors as other company's offering a similar

product and services to the same customers at similar prices.

10

But on the contrary companies actually face a much wider range of competitors. A company

might define competitors as all firms making the same product or class of product. Even

more broadly competitors might include all companies making products that supply the same

service. Finally and still more broadly, competitors might include all companies that compete

for the same consumer dollars.

Companies must avoid 'competitor myopia.' A company is more likely to be 'buried' by its

latent competitors than its current ones.

Companies can identify their competitors from an Industry point of view they might see

themselves as the Pharmaceutical industry, oil industry, beverage industry or the hotel

industry. A company must understand the competitive patterns in its industry if it hopes to be

effective industry 'players' in that industry.

Companies can also identify competitors from a market point of view. Here they define

competitors as companies that are trying to satisfy the same customer need or serve the same

customer group. In general the market concept of competition opens the company's eyes to a

broader set of actual and potential competitors. This leads to a better long run market

planning.

The key to identifying competitors is to link industry and market analysis by mapping out the

product/ market segments.

Pearse and Robinson notes that in identifying competitors; current and potential, executives

consider several important variable, they include;

1. How do firms consider their scope of Market? The more similar the definition of firms

the more likely the firm will view each other as competitors.

2. How similar are the benefits the customer derive from products or services that the firm

offers. The more similar the benefits of the products and services, the higher the level of

11

substitutability between them. High sustainability level forces firms to compete fiercely

for customers.

3. How committed are other firms to the industry? This is one of the most important

question competitor analysis must address, because it sheds more light of the long term

intentions and goals. To size up the commitment of potential competitors, to the industry,

reliable intelligent data are needed. Such data may relate to potential resource

commitment.

Pearce and Robinson point out that identifying competitor is a mile stone in the

development of strategy. But they note that this process is laden with uncertainty and risks, a

process in which executives sometimes make costly mistakes such as;

1. Over emphasizing current and known competitors while giving in adequate attention to

potential entrants.

2. Over emphasizing large competitors while ignoring some small ones.

3. Overlooking some potential international competitors.

4. Assuming that a competitor will continue to behave in the same way they have behaved

in the past.

5. Mis- reading signals, that they might indicate a shift in focus of competitors or a

refinement of their present strategies or tactics.

6. Overemphasizing competitor's financial resources, market positions and strategies while

ignoring their intangible assets such as the top management team.

7. Assuming that all of the firms industry are subject to the same constraints or are open to

the same opportunities.

Believing that the purpose of strategy is to outsmart the competition, rather than to satisfy

customer's needs and expectation

2. 7 DETERMINING COMPETITORS OBJECTIVES.

Having identified the main competitors, marketing managers now asks: what does each

competitor seek in the market place? What drives each competitor behavior? The marketer

will want to assume that all competitors will want to maximize their profits and will choose

12

their actions accordingly. But companies differ in the emphasis they put on short term versus

long term profits. And some competitors might be oriented towards 'satisfying' rather than

'maximizing' profits. They have target profit goals and are satisfied in achieving them, even

if more profits could be produced by other strategies.

Thus marketers must look beyond competitors profit goals. Each competitor has has a mix of

objectives each with differing importance. The company wants to know the relative

importance that a competitor places on the current profitability, market share growth, cash

flow, technological leadership, service leadership and other goals.

Knowing a competitors mix of objectives reveals whether the competitor is satisfied with its

current situation and how it might react to different competitive actions. For example a

company that pursues a low cost leadership will react much more strongly to a competitor

cost - reducing manufacturing breakthrough than to the same competitor advertising

increase.

A company must also monitor its competitor objectives fro various product/ market

segments. If the company finds that a competitor has discovered a new segment, this might

be an opportunity. If it finds that the competitors plan new moves into the segment now

served by the company, it will be forewarned and hopefully forearmed

2.8 IDENTIFYING COMPETITORS STRATEGIES.

The more that one firm's strategy resembles another firm's strategy, the more the two firms

compete. I most industries, competitors can be sorted out into groups that pursue different

strategies. A Strategic group is a group of firms in an industry following the same or similar

strategy.

Some important insight emerges from fro identifying strategic groups. For example if a

company joins one group, the members of that group become its key competitors and it can

succeed only if it develops some strategic advantage over these competitors.

13

Although competition is intense within a strategic group, there is also some rivalry among

groups. First some strategic groups may appeal to overlapping customer segments. Finally,

members of one strategic group might expand into new segments.

The company needs to look at all of the dimensions that identify strategic groups within an

industry. It needs to know each competitors product quality, features and mix; customer

service; pricing policy; distribution coverage; sales force strategy; advertising and sales and

promotions programs. It must also study the details of each competitors Research and

Development, Manufacturing, purchasing, financial, and other strategies.

2.9 ASSESING COMPETITORS STRENGTHS AND WEAKNESS.

Marketers need to carefully assess each competitor's strengths and weakness in order to

answer the critical: What can our competitors do? As a first step, companies can gather data

on each competitor's goals, strategies, and performance over the last few years. Admittedly,

some of this information will be hard to obtain. For example business products companies

find it hard to estimate competitor's market share because they do not have some syndicated

data services that are available to consumer packaged goods companies.

Companies normally learn about their competitor's strength and weakness through

secondary data, personal experience and hearsay. They can also conduct primary marketing

research with customers, suppliers and dealers. Recently a growing number of companies

have turned to benchmarking, comparing the company's product and processes to those of

competitors or leading firms in other industries to find ways to improve quality and

performance. Benchmarking has become a powerful tool for increasing company's

competitiveness.

14

2.10 ESTIMATING COMPETITOR REACTIONS.

After assessing the company's strengths and weaknesses, the competitors want to know;

what will the competitors do? A competitor objectives, strengths, and weaknesses go along

way toward explaining its likely actions, as well as its reactions to the company's move such

as price cuts, promotional increase or new product introductions. In addition, each competitor

has certain philosophy of doing business, a certain internal culture and guiding belief.

Marketing managers need a deep understanding of a given competitor mentality if they want

to anticipate how the competitor will act or react.

Each competitor reacts differently. Some do not react quickly or strongly to competitor

move. They may feel their customers are loyal; they may be slow in noticing the move; they

may lack funds to react. Some competitors react only to some certain kind of moves and not

to others. They might only respond strongly to price cuts in order to signal that these will

never succeed. But they might not respond to at all to advertising increases, believing these

to be less threatening. Other competitors react swiftly and strongly to any action.

Finally some competitors show no predictable reaction pattern. They might or might not

react on a given occasion, and there is no way to foresee what they will do based on their

economics, history or anything else. In some industry competitors live in perfect harmony, in

others, they fight constantly. Knowing how major competitors react gives the company clues

on how best to attack or how competitors or how best to defend the company's current

position.

2.11 SELECTING COMPETITORS TO ATTACK AND TO AVOID.

A company has largely selected its major competitors through prior decisions on customer

target, distribution channels, and marketing mix strategy. These decisions define the strategic

group to which the company belongs. Management now must decide which competitors to

15

compete against most vigorously. The company can focus on one of several classes of

competitors.

Strong or weak competitors.

Most company does prefer to aim their shots at their weak competitors. This requires fewer

resources and less time. But in the process, the firm should gain little. The argument could be

made that the firm also should compete with strong competitors in order to sharpen its

abilities. Furthermore, even strong competitors have some weaknesses, and succeeding

against them often provides greater returns.

A useful tool for assessing competitor's strength and weaknesses is the customer value

analysis. The aim of the customer value analysis is to determine the benefits that target

customer values and how customers rate the relative value of various competitor offers. In

conducting a customer value analysis, the company's first identifies the major attributes that

the customer values and the importance customers place on these attributes. The key to

gaining competitive advantage is to take each customer segment and examine how the

company's offer compares to that of its major competitor. If the company offer exceeds that

of the competitor in all major attributes, the company the company can charge a higher price

and earn higher profits, or it can charge the same price and gain more market share. But if the

company is seen as performing at a lower level than its major competitors on some important

attribute, it must invest in strengthening those attributes; it must invest in strengthening those

attributes or finding other important attributes where it can build a lead on the competitor.

Close or Distant competitors.

Most companies will compete with competitor who will resemble with them most. At the

same time the company may want to avoid trying to 'destroy' a close competitor. In some

cases success in hurting a close rival can bring in tougher competitions.

Well Behave or Disruptive competitors. A company really needs and benefits from

competitors. The existence of competitor results in several strategic benefits. Competitors

16

may help in increase total demand. They may share the cost of the market and product

development and help to legitimize new technologies. They may serve less attractive

segments or lead to more product differentiation. Finally they lower the anti trust risk and

improve bargaining power versus labour or regulations.

However a company may not view all its competitors as beneficial. An industry often

contains 'Well behaved' competitors and 'disruptive' competitors. Well behaved competitors

play by the rules of the industry. They favor stable and healthy industry, set reasonable prices

in relations to the costs, motivate others to lower costs or improve differentiation, and accept

reasonable levels of market share and profits. Disruptive competitors on the other hand break

the rules they try to buy share rather than earn it, it take risks and in general shake up the

industry.

A company might be smart to support well behaved competitors, aiming its attacks at

disruptive competitors. The implication is that 'Well behaved' companies would like to

shape an industry that consists of only well behaved competitors. Through careful licensing,

selective retaliations, and coalitions, they can shape the industry so that the competitors

behave rationally and harmoniously, follow the rules try to earn share rather than buy it, and

diffentiate to compete less directly.

2.12 ETHICAL ISSUES IN COLLECTING MARKETING INFORMATION TO BE

USED IN COMPETITOR ANALYSIS.

As the desire for better information grows and technology for gathering information improves,

marketers are faced with increasing variety if ethical issue to the collection and use of research

information. The most common concerns are the following:

1. Privacy in data collection. When companies use hidden cameras to record customers

purchase behavior, recordings of customer address used by most companies is seen as

unethical thing because these cameras invade customer's privacy.

17

2. Privacy in data use. In routine process of business, companies record the names and

address of people who have used their products or service to act as referees but this is seen

as un ethical if the names and addresses of such people are given out without their consent

or information.

3. Intrusiveness. All marketers want information but gathering information at a time when

customers are eating can be annoying and inconveniencing to them.

4. Deceptive Implementation. On some occasions, researchers use deception to gather

information. For example, a person from the competitor firm can telephone a competitor

firm and falsely represent him or herself as a potential customer I order to collect

information about a particular company, which is seen as unethical.

2.13 STEPS TAKEN BY COMPANY TO IMPROVE

COMPETITOR ANALYSIS.

QUALITY OF

• Training and motivating the sales force to spot and report new developments in the

market. The Sales force act as the company's eyes and ears.

• Setting of a customer care centre where customers can report any complaints about

the products.

• Purchasing of competitors products to its price content so that concerned company

can know what strategy to use to compete with it.

• Reading Company's reports of competitors published, talking to employees, agents

and distributors.

2.14 A MARKET SHARE.

A market share is referred to as the portion or the size of the market a company serves by

offering product or services to its customers. An organizations market share is therefore the

total percentage of the market size an organization serves.

18

CHAPTER 3.

3.0 METHODOLOGY

3.1 INTRODUCTION.

This chapter spells the method that was used to enlist relevant data. It will address the

research design, data collection instruments and data analysis. The researcher

formulated the study problem. Data was collected from the Sales and Marketing

department at the Sarova Stanley Hotel where the proposed study was carried out.

3.2 GEOGRAPHICAL BACKGROUND OF AREA OF STUDY.

The Sarova Stanley hotel is located in the heart of Kenya's Capital, Nairobi.

3.3 RESEARCH DESIGN

The researcher employed the combination of both descriptive and casual survey

design while conducting the research within the Sarova Stanley Hotel. The researcher

was supposed to be open minded in giving the effects of competitor analysis on the

growth of market share.

3.4 STUDY POPULATION.

The population of the study was the employees and managers regarding to the sales

and marketing department and reservations.

3.5 SAMPLE SIZE AND SA.MPLE DETERMINATION

A sample of 18 respondents were selected to fill in the questionnaires, the respondents

of these questionnaires were employees, heads of department and the management

team.

19

3.6 DATA COLLECTION METHODS INSTRUMENTS

Both primary and secondary sources were used to collect data. Primary sources of

data collection consisted of the researcher's personal observation of various variables

in the study area and photography could also have been used. The researcher

embraced the use of historical data of the hotel such as guest data bases, questionnaire

assessment or customer complains book.

3.7 QUESTIONNAIRES.

The researcher employed questionnaires as an instrument of data collection;

Questionnaire were used to collect non- observable aspects of the study. The

questionnaires were structured in such a way that it helped the researcher to establish

effects of competitor analysis on the growth of market share.

3.8 ORAL INTERVIEWS

One on one oral interview was used by the researcher to get the first hand view and

information from the respondents.

3.9 GROUPS DISCUSSIONS.

To get the real picture about the effects of competitor analysis on the growth of the

market share, the researcher initiated discussions with targeted employees so as to get

their views and opinions towards the subject under the study.

3.10 DATA PROCESING AND ANALYSIS.

The researcher applied various statistical methods in present data including;

20

Tabulation tables were used in order to systematically arrange the data collected in

rows and columns for efficiency and effectiveness during presentation and analyzing

of data.

Multiple bar graphs.

Multiple bars were also employed for analyzing data. This was to make it easy to

compare and interpret the findings.

Pie Charts.

Pie charts made it easier to interpret the data in the research.

21

CHAPTER 4.

4.0 DATA ANALYSIS AND PRESENTATION.

4.1 INTRODUCTION.

In this chapter an attempt is made to interpret and explain the findings. Also key information

enables to relate to specific objectives and give clear picture of the results.

There are steps as discussed in the previous chapters in analyzing competitors but the scope of this

study is in the sales and marketing department at the Sarova Stanley. The data analysis might

therefore not follow the exact order or sequence as noted in the literature review since this analysis

is based on the factors that affect market share in the competitive hotel industry.

4.2 BACKGROUND INFORMATION.

After successfully administering the questionnaires to the planned 18 respondents, only 15 of them

responded while 3 of them did not respond. However this was an adequate proportion of the

sample size.

Table 1. Response rate

Sales account 7 7

managers.

Reservations. 5 4 1

E-Sales. 3 2 1

Total 18 15 3

(Source: Field Work.)

22

Figure 3.

An illustration of the above table in form of a bar Graph.

Planned Response.

Actual Non Response. Response.

Head of Departments

■ Sales Account Managers.

□ Reservations.

DE-Sales.

■ Total

The Shortfall was due to some problems like the unwillingness of some respondents to produce

information regarded as confidential. Another major hiccup was time delayement of the

respondents who were busy and didn't have time to fill in the questionnaire hence either they file

in a hurry or didn't fill any at all. However of 81 % is an adequate proportion of the sample size.

4.3 TSS FACT SHEET.

The TSS fact sheet shows the feature of the Sarova Stanley Hotel by knowing what feature the

hotel has it was easier to analyze competitors and therefore underlining the differences and

similarities.

23

cfJ THE SAROVA STANLEY

NAIROBI SINCE 1902

Refreshing African Hospitality

THE SAROVA STANLEY: P.O.BOX 30680 00100, Nairobi, Kenya

Tel: 254 (0)20 316377 Fax: 254 (0)20 229388 / 219860

E-m ai I: thestanley@sarovahotels.com

FACT SHEET

ACCESS:

• Distance: 18km from Jomo Kenyatta International Airport. Transfer takes 20 minutes

• 7 km from Wilson Airport. Transfer takes 10 minutes.

SITE:

• Nairobi city center: Comer of Kimathi Street and Kenyatta Avenue (a graceful boulevard)

LOCALE:

• Centrally located in Nairobi's shopping and central business district

• Easy access to CBD attractions, international organizations, financial institutions including the Nairobi Stock Exchange, government ministries, and historical landmarks.

CLIMATE:

• Warm days average 24°C.

• Cooler nights.

• June-July are colder months average 18°C.

• March-June have long rains.

• October-December have short rains

RECEPTION:

• Check-out time is 10:00 am and Check-in time is 12:00 pm

ACCOMMODATION:

• 217 individually air-conditioned rooms on 8 floors including:

• 160 Deluxe

• 2 Courier Single - Single beds

24

• 32 Club Rooms

• 16 Executive Suites, 3 junior suites, 2 State Suites

• 1 Presidential Suite

• 1 Penthouse

GUEST SERVICES/ FACILITIES:

• Currency Exchange.

• Same day laundry and valet services.

• Baby-sitting services.

• Wake - Up Service and Tum - down service

• Frequent Flyer claim points

• Wi Fi connectivity

SHOPPING ARCADE:

• Gift shops, Newspaper stand, Beauty Salon, Bookshop, Boutique, Curio shop, Chemist, Optician

ROOM FEATURES AND FACILITIES:

• Direct dial telephone - 3 per room

• Wireless Internet access

• A safe in every room

• Satellite TV

• Bath, Shower, WC, & Hair dryer

• Voltage of 240 volts and 50 cycles - razor outlets separate

• Minibar

• Blackout Curtains

•Soundproofing (Double glazed windows) • Smoke detectors and sprinkler systems,

• Key card system & Automatic self - locking doors • Security personnel on each floor

Thai chi st

• On the 1 floor, one of the city's most elegant dining establishments, The Thai Chi Restaurant boasts the finest in authentic Thai cuisine

Thorn Tree Cafe

• Bistro style featuring great food and entertainment.

• Historic landmark in the history of Nairobi and indeed East Africa.

The Exchange Bar

• Elegantly decadent and plush lounge bar overlooking the graceful Kenyatta Avenue Boulevard.

• Home of the Nairobi Stock Exchange for over fifty years

• Preferred networking venue with a refined ambiance 1h

set in early 19 century decor Pool Deck Restaurant

tth • Al fresco restaurant on the 5 Floor serving healthy

buffets & salads, Tandoori and grill specialties. ROOM SERVICE:

• Available 24 Hrs

25

CONFERENCE & BANQUETING:

• 9 meeting & conference rooms including a 227m2

ballrooms.

• Fully-fledged Business Center with computers,

• e-mail/intemet, fax, photocopier, personalized secretarial services etc.

• State-of-the -art presentation and audio visual equipment (Motivator)

Recreation

• Heated swimming pool

• Modern, state-of-the-art health club with sauna & steam bath.

• Massage, Pedicure and Manicure services available

• Yoga and aerobic classes

CAR PARKING:

• Highly organized, secure and efficient Valet parking service

• Car parking space available

PERSONNEL ON CALL:

• Duty Manager, Security personnel.

STANLEY COMPETITOR

From the Research Findings we can establish that TSS has a total of 7 competitor hotels. These

are hotels that TSS have recognized they offer similar kind of services and produces as well as

sharing the same main features such as the Parking space, the bed capacity, conference rooms,

target clients and the star ratings. TSS competitors include;

1. Hotel Intercontinental.

2. The Grand Regency Hotel.

3. Holiday- Inn

4. Hilton Hotel, Nairobi.

5. The Nairobi Serena.

6. The Fairmont Norfolk.

7. Nairobi Safari Club.

Some of the main features of the competitors are.

Hilton Hotel Target Bed capacity Star rating Conference rooms Parking

Intercontinental Target Bed capacity Star rating Conference rooms Parking

Norfolk Target Bed capacity Star rating Conference rooms Parking

business and leisure travellers. 287 4* ranked 7, seating between 2-500 packs available for approximately 40 vehicles (garage parking)

business and leisure travellers 371. 14 suites, 300 single bedded, 76 doubles 191 non-smoking 5* 8, seating between 2-450 packs available for approximately 344 cars

business and leisure travellers 167 5* 4, seating 2-100 packs available for approximately 100-120 cars

26

Nairobi Serena Target Bed capacity Star rating Conference rooms Parking

Holiday Inn Target

Bed capacity Star rating Conference rooms Parking

Nairobi safari Club. Target Bed capacity Star rating Conference rooms Parking

Grand Regency.

business and leisure travellers 184 5* 6 seating 2-60 pax available for approximately 50 cars

business and leisure travellers 171 4* 6 seating 2-800 pax available for approximately 60-70

business and leisure travellers 146 4* 7 seating capacity up to 300 people. available for approximately 35-45

Target business and leisure travellers Bed capacity 194 Star rating 4 * Conference rooms 4 seating up to 400. Parking available for approximately 90-110

Table 2. Main features of TSS competitor hotels

Name ofth.e Target. Bed Star Ratings.

Hotel. Capacity.

Intercontinental. Business and 371 5 star. Leisure Travelers.

Grand Regency. Business and 194 5 star Leisure Travelers.

Holiday Inn. Business and 171 4 star Leisure Travelers.

Hilton. Business and 287 4 star. Leisure Travelers.

Serena. Business and 184 5 star. Leisure Travelers.

-Safari Club Business and 146 4 star.

Leisure Travelers.

Norfolk. Business and 167 5 star. Leisure Travelers.

(Source: Field Work.)

27

Conference Parking.

rooms.

8 344

4 100

6 65

7 40

6 50

~ ----7 40

4 110

Target. Bed Capacity. Star Ratings. Conference Parking. Rooms

Figure 3. An illustration of the Main features of the competitor hotels

4.5 MARKET/ RACK RATES.

□ Intercontinental.

■ Grand RegencY..

□ Holiday Inn.

□ Hilton.

■ Serena .

□ Safari Club.

I ii Norfolk.

This refers to the average rate the competitor hotel offer in terms of accommodation. It is always

referred to as the Average room rates (ARR) and includes Bed, Breakfast and Taxes. Below table

shows the findings of the competitors ARR as compared to the TSS's $ 160.00 which is includes

of Bed, Breakfast and taxes. However it is noted that these rates are subject to change.

Table 3. Market/ Rack rates of TSS competitors.

Hotel. Rack Rates. ($)

Nairobi Serena. 175.00

Safari Club. 140.00

Norfolk. 175.00

Intercontinental. 180.00

Holiday Inn. 177.00

Hilton. 160.00

Grand Regency. 145.00

28

Figure 5: An illustration of the market/ rack rates of TSS competitors.

Rack Rates. ($)

13% 15%

16%

(Source: field work.)

4.6 MEAL RATES AND CONFERENCE RATES.

o Nairobi Serena.

■ Safari Club.

o Norfolk .

o Intercontinental.

■ Holiday Inn.

D Hilton.

Grand Regency .

Other than accommodation meals at the hotels are usually competitive as well as conference

package rates. It was noted that the meals rates which includes Breakfast and Lunch/Dinner and

the conference rates are slightly different and this shows how competitive this hotels are.

Table 4: Meal rates and conference rates.

Hilton. 25.00 30.00 45.00

Serena. 20.00 30.00 56.00

Intercontinental. 25.00 30.00 58.00

Grand Regency. 22.00 25.00 50.00

Nairobi Safari club. 30.00 30.00 40.00

Nor fork. 35.00 40.00 55.00

Holiday Inn 30.00 35.00 50.00

29

Rates range from market rate to contract rates and resident rates. So depending on the kind of

client one is, the range of rates are administered but the market rate remain to be constant.

Below is a Bar graph that represents the market rates.

Figure 6: An illustration of the meal rates and conference rates.

70

60 ~

50 -~ D Breakfast. ($)

40 -- - - - -30 -

■ Lunch/ Dinner($) ,-- ,___ - ,--

20 -D Conference Per ($) - -

10 - f-- - f-- f-- - f--

0 I

(Source: Field Work.)

4.7 INCENTIVE PROGRAMS BEING OFFERED BY THE TSS COMPETITORS.

Incentives are programs that are implemented by hotels to reward their core clients or clients

generally. It's also referred to as loyalty program. Executive club is a loyalty or an incentive

program that is meant bring together all the core clients of the Sarova Stanley. An exclusive

cocktail party is held for them every once a year and they are rewarded by being given branded

Sarova gifts, Free lunch or Dinner at the Sarova Stanley, Free nights at the Stanley or any other

Sarova Property.

Competitor hotels also have got their own incentives this is show in the table below.

30

Table 5: Incentive Programs.

Hotel

Intercontinental.

Nairobi Serena.

Grand Regency.

Nairobi Safari Club.

Holiday Inn.

Hilton Nairobi.

Nor fork.

(Source: field work.)

Incentive/ Loyalty Program

, Priority Club.

(YES)

Prestige Club (Coming Soon.)

The There was a challenge of getting to know about the incentive program of the other

competitor hotels since this is a new program that has started in the recent past, so either some

respondents didn't know or didn't have an idea at all. As for the case of Grand Regency hotel,

they too have an incentive programme but the respondents didn't have the correct name for it.

4.8 UNIQUE PRODUCTS.

In order to gain competitive advantage in a highly competitive environment hotels develop

unique products that keep them ahead at the lead to its competitors. The Sarova Stanley's idea of

the Thai Chi Restaurant was a brilliant one. TSS has set up the pearl of Thai cuisine within the

heart of Nairobi. This spectacular restaurant offers a piece of Thailand, as it provides excellent

Thai dining experience that is found nowhere else in Nairobi.

Another product that is the Survivor Challenge program which is based along the theme of

"Experiential Training" to the corporate market as well as creating environmental and cultural awareness

amongst clients and staff alike. This program seeks to develop function competency among employees of

31

any organization at an exclusive site in one of the Sarova Properties (Sarova Shaba). Any organization

that seeks to train its employees in a unique way go for the Sarova Survivor challenge.

According to the respondents, TSS competitors have their unique products as well. They are

listed in the table below.

Table 6: Unique products offered by TSS competitors.

Intercontinental.

Nairobi Serena.

Grand Regency.

Nairobi Safari Club.

Holiday Inn.

Hilton Nairobi.

Nor fork.

(Source: field Work.)

-24 hour gym.

-Biggest presidential suite.

-Biggest ball room.

-Multi Storey car Parking.

-Casino.

-Complimentary branded mineral water.

- Sleepers in all rooms.

-complimentary fruits and flowers.

-8 Different juices for breakfast.

-Heated Pool.

-Variety of restaurants (Six restaurants.)

- Biggest Ball room.

-All their rooms are suites. Meaning that it

has a lounge and a sleeping area.

The respondent' s were either not aware or were not sure about the last three restaurant hence

didn't fill anything about them in the questionnaire.

32

The researcher was found it interesting to note that the Grand regency and Intercontinental hotel

claim to have the biggest ball room. Ball room is large halls in hotels for big functions and

cocktail parties.

33

CHAPTERS.

5.0 SUMMARY, CONCLUSION AND RECOMMENDATION.

5.1 INTRODUCTION.

This chapter gives a summary of the study findings. It also bears recommendations, conclusions,

and areas of further research. The data was analyzed by the use of Ms Excel package to produce the

descriptive statistics. Graphs, tables and charts were used to describe the data and draw conclusions

on the findings.

5.2 SUMMARY OF THE FINDINGS.

Having conducted the whole project the researcher has analyzed that the concept of competitor

analysis is alive and evident at the Sarova Stanley hotel. The Sales and Marketing team have

embraced it and it is clear that analyzing competitions is a fundamental practice if they have to

keep The Sarova Stanley up on the trend in the competitive environment.

However the researcher noted that the creative mind in discovering a new market segment and

developing competitive advantage over TSS competitors leaves a lot to be desired hence the

Sales and Marketing team need to enhance their creativity and develop an eye for detail if they

want to be the Market leaders. They should add to their Strengths, create opportunities and

minimize on their threats and opportunities.

The researcher also noted that there are new Multi Million Hotels of Five Star quality that are

being established in Nairobi where the Sarova Stanley is situated, and there is little if any efforts

to analyse the new entrants in the Market which is part of competitor analysis.

34

5.3 THE PRACTICE OF ANALYSING COMPETITORS AT TSS.

The feasibility study clearly indicate that the sales and Marketing team at TSS are aware of the

importance of analyzing competition but it is not priority, in other words they spend some time

to analyze bits of the competitors but they don't allocate much time in this practice. The

researcher notes that however much it is important not to be engulfed in a competitor craze it is

important for the organization to realize that competitor analysis goes hand in hand with growth

of market share just like traffic an weather, hence it should be in their radar screen.

The researcher also realized that most of the employees find the practice of analyzing

competitors as boring and time wasting and they would rather get information about their

competitors through the media or daily newspapers. Some employees also don't engage in

competitor analysis since they believe that it will be going against their faith because they

consider part of this practice as unethical, which of course it is.

5.4 CHALLENGES IN COLLECTING INFORMATION TO BE USED FOR

COMPETITOR ANALYSIS.

From the research findings the researcher has realized that the sales and marketing team face

challenges in collecting information to be used for competitor -analysis, wrong information leads

to hindrance in developing the best competitive advantage at the Sarova Stanley, some of these

challenges include;

• Lack of adequate funding for the research.

• Competitor hotels have the telephone numbers of their competitors such as TSS,

therefore TSS employee disguising themselves as clients will easily be spotted.

• Employees of competitor hotels know each other very well so it will be hard for

TSS employee to get first hand information from competitors.

• Lack of efficiency of team work in collecting information.

• Some employees regard this exercise as boring and opt to get information about

their competitors on print media, Electronic media or hearsay.

35

5.5 DOES TSS COMPETITORS CONDUCT COMPETITOR ANALYSIS?

In every competitive environment, there is a market leader, a market challenger, a market

follower and market nicher.

In the hotel industry, a market leader is the Hotel with the largest market share, it usually

leads other hotels in price changes, new products introductions and promotion spending. A

market challenger on the other hand is a runners up hotel that is fighting hard to increase its

market share while a market follower are the hotels in the industry that wants to hold on to its

share without rocking the boat. Hotels that serve small segments that other big hotels have

ignored are referred to as Market nichers, they always serve a very small part and are usually

not interested in competition.

In a bid to know whether the Sarova Stanley competitors conduct competitor analysis, it was

interesting to note that some hotels which TSS considers as their competitor have not listed

TSS as their competitor. A fantastic example if of the Hotel Intercontinental, as much as they

have great competitive advantage over the Sarova Stanley and other five star hotels, they

don't consider TSS as a competitor. This lead to a hypothetical conclusion by the researcher

that TSS is a market challenger and that could event explain why this study has seen

conducted; for the purposes of increasing TSS market share.

The researcher noted that competitor hotels conduct competitor analysis but the respondents

were not sure about the list of competitors their competitors have apart from Hotel

Intercontinental which the respondents were cock sure that they are not in their list of

competitors.

36

5.6 EFFECTS OF CONDUCTING COMPETITOR ANALYSIS ON THE GROWTH OF

TSS MARKET SHARE.

From the research findings it's evident that when TSS conducts competitor analysis, they

analyze their competitor's competitive advantage and disadvantages as well. From their critical

findings, they develop new products, reduce their rates or offer more customer value which

will gain them a better competitive advantage that will see TSS maintain their core clients and

adding more clients's hence the growth ofTSS market share.

The researcher however cautions that the sales and marketing team should be careful to

duplicate their competitor's competitive advantage or new products since it will not be of any

benefit to the target market segment they wish to expand since TSS competitors are offering

similar kind of product, doing this will just be adding products or services the already exist

hence causing a flood of the same products and services in the market.

5.7CONCLUSIONS.

In conclusion the researcher emphasizes that competitor analysis remains to be one of the

fundamental pillars of the Sarova Stanley growth of market share, therefore the sales and

marketing team should indicate it in their list of priorities since its highly paramount.

The onus therefore is for the team to act as the organizations watch dog and follow up the

trends in the competitive market so that they are not caught unaware by the latest happenings

in the highly competitive environment.

37

5.8RECOMMENDATIONS.

Since Competitor analysis has been regarded to as a fundamental practice in increasing TSS

market share, the researcher recommends that TSS should develop or design a competitive

intelligent system.

5.9 DESIGNING A COMPETITIVE INTELLIGENCE SYSTEM.

After TSS has gathered information about their competitors, this information needs to be

collected, interpreted, distributed, and used. The cost in money and time of gathering competitive

intelligence is high, and TSS must design its competitive intelligence system in a cost effective

way.

The competitive intelligence system first identifies the vital types of competitive information and

the best sources of this information. Then, the system continuously collects information from the

field (Sales force, Channels, supplies, Market research firms, trade associations) and from

published data (government publications, Speeches, articles.)

Next the systems check the information for validity and reliability, interprets it, and organizes it

in an appropriate way. Finally it sends the key information to relevant decision makers and

responds to inquiries from managers about competitors.

With this kind of system, the Sales manager will receive timely information about competitors in

the form of phone calls bulletin, newsletters and reports. In addition the managers can connect

with the system when they need when they want to know a competitor weakness and strengths,

or when they want to know a competitor will respond to a planned company move.

Smaller companies that cannot afford to set up formal competitive intelligence offices can assign

specific executives to watch specific competitors. Thus a manager who used to work for a

competitor might follow the competitor closely 'he or she would be the 'in house expert' on that

38

Competitor. Any manager needing to know the thinking the thinking of a given competitor could

assign the in-house expert.

5.10

In the efforts to gain or develop competitive advantage, the researcher again notes that TSS has

to develop competive strategies, this may include;

111 Overall cost of Leadership. Here TSS must work so hard to achieve the lowest cost of

production and distribution so that it can price lower price lower than its competitors and

win large market share.

111 Differentiation. Here TSS will concentrate on creating a highly differentiated product line

and marketing program so that it comes across as the class leader in the industry.

111 Focus. Here TSS will focus its efforts on serving a few market segments well rather than

going after the whole market.

111 Operational excellence. The Sarova Stanley provides superior value by leading its

industry in price and convenience. It works to reduce costs and to create a lean and efficient

value delivery system. It serves customers who want reliable, good quality products or

services but who want them cheaply and easily

111 Customer intimacy. The Sarova Stanley should provide superior value by precisely

segmenting its markets and then tailoring its products and services to match exactly the

needs of the targeted customers. TSS should build a detailed customer database for

segmenting and targeting and empowers its marketing people to respond quickly to

customer needs.

39

Ill TSS should provide superior value by offering a continuous stream of

leading edge products or services that make their own and competing product absolete. It is

open t new ideas, relentlessly pursues new solutions and works to reduce cycle times so

that it can get new products to market quickly.

5.11 AREAS FURTHER STUDIES.

Further studies should be done on this topic since as much as an organization like TSS could

take steps to analyse competition and to develop new products as well as competitive

advantage, the competitors are burning the mid-night candle trying to come up with new

strategies of leading the market, hence developing new strategies day by day.

Related topics to competitor analysis are highlighted on the conceptual frame work in

chapter 1 and this includes Benchmarking and customer value analysis.

40

REFERENCES

Carter McNamara (1998), Authenticity Consulting, LLC

David L Kurtz (1989), Contemporary Marketing, 6th Edition.

John A. Pearce, Richard B. Robinson Jr: Formulation, Implementation and control of Competitive Strategy, 8th Edition, Business week.

Phillip Kotler, Gary Armstrong: Principles of Marketing, ih Edition.

Roger J Best, Market based Management, Strategies for growing Customer Value and profitability, 4th Edition, Person prentice Hall.

William D. Perreault Jr, E Jerome McCarthy, Basic Marketing, a Global Managerial Approach, 15th Edition Mc Graw Hill

Subshah C. Jain Marketing Planning and Strategy, 4th Edition

Michael R. Solomon, Elnora W. Stuart (2003); Marketing Real people, Real choices, 3rd Edition.

www.marketing .org

www.wikipedia.org/ wiki/ competitor_analysis.

www.tutor2u.net/business /strategy/competitor analysis.

www.netmba.com/strategy/competitor _analysis.

41

APPENDIX I: RESEARCH QUESTIONNAIRE

KAMPALA INTERNATIONAL UNIVERSITY.

SCHOOL OF BUSINESS AND MANAGEMENT.

Research Topic: Competitor Analysis and the growth of market share.

Case study: Sarova Stanley Hotel, Nairobi.

SECTION A: Respondent Personal Information.

Dear Sir/ Madam,

Kindly fill in the Blank spaces and tick in the boxes where appropriate. (The respondent is guaranteed that the information given will be confidential, and it is not for publication or to be traced by the public, only for study purpose only.)

Name ................................................................................................... .

Age ..................................................................................................... .

Sex ...................................................................................................... .

Marital Status .......................................................................................... .

Occupation ............................................................................................ ..

Department ............................................................................................ .

Educational Level ............................................................................... . .... .

a) None

b) Primary

c) Secondary.

d) Tertiary.

SETION B: Competitor Analysis.

I. Who are your competitors?

a) ............................... . e) ........................ . b) ............................. .. f) .......................... . c) .............................. . g) .......................... .

d)............................... e) .......................... . 2. Among your clients which ones do you think use your competitors as well?

a)................................ e) ........................ . b)............ ... ...... ... ........ f) .......................... .. c) ................................. g) .......................... . d)................................. e) ........................ ..

3. How many rate tiers do you have?

a) One

b) Two

c) Three.

d) Four.

e) Five.

4. How many rate tiers do your competitors have? a)................................ e) ........................ . b)............................... f) ......................... .. c)................ ............... g) ......................... .. d)............................... e) ......................... ..

5. What benefits do our rates carry along?

6. What benefits do your competitors offer in their rates? a) ................................ . b) ............................... . c) ................................ . d) ................................ . e) ................................ . f) ...... .......................... . . g) .................................. . e) ............................. ..

7. What Criteria do you use to quote your rates?

8. What Criteria do your competitors use when quoting? a) ............. . .... . .... . ........ . b) ............................... . c) ................................ .

TT

d) .. ............ . .............. . . . . e) . .......... . ............... . .... . f) ... . ................. . ....... . .. . . g) . . . . ... ....... . ............. .. . .. . . e) ..... . ..... .. ........ .. .... . .. .

9. What are your meal rates? Breakfast ......... . .. . .. . Lunch ...... . ..... ......... . Dinner ..................... .

10. What are your competitor meal rates? a) ..... ............. ········· ..... .

Breakfast .............. . . Lunch ..................... . Dinner . . ........ . . . .... .. .. .

b) .... ........................... . Breakfast. .... . . .. ..... . . Lunch ......... ....... ..... . Dinner .................... . .

c) ................................ . Breakfast ........... . ... . Lunch ..................... . Dinner ......... . ........... .

d) ................................ . Breakfast. . ....... . .... . . Lunch ..................... . Dinner ............ . ..... . .. .

e) ................................ . Breakfast ...... ......... . Lunch ..................... . Dinner ..................... .

f) ................................ .. Breakfast . . ............. . Lunch .... ..... ............ . Dinner ..................... .

g) .................................. . Breakfast ......... . ....... . Lunch ......... ... . . ....... . Dinner ..................... .

e) .............................. . Breakfast ........ . . . .... . Lunch ..................... . Dinner . . ................ . .. .

11. Do you have special offers to your clients? If yes what are they, if NO why?

TH

12. Do your competitors have special offers? What are they?

a) ... ··························· .. . b) ............................... . c) .... . . . .. .. .... . · ·· ······ ...... .. d) ............................... . . e) ................................ . f) ................................. . g) .................................. .

13. Do you have an incentive program?

14. Do your competitors have incentives? What are they? a) ................................ . b) ............................... . c) ................................ . d) ................................ . e) .... . ............ . ... ... .. ..... . . f) ................................. . g) .................................. .

15. What unique products do you offer? a) ................................ . b) ............................... . c) ................................ .

16. What unique products do your competitors offer that you think gives them competitive advantage? a) .................... . ........... . b) ............................... . c) ................................ . d) .............. . ................. . e) . ... . . .. ...... . . . . ... . .. .. .... .. . f) ................................. . g) .... . ........ . ..... . .............. .

17. How many restaurants do you have?

18. How many restaurants do your competitors have? a) ................................ .

b) ........... . ...... . ............ .

c) ......... . ..................... ..

d) ............................. ; .. .

e) ... . ............................ .

TV

f) .. .. ... . ..... .. .... .. .. ........ .. .

g) ... . . .... . .. ... . .. .. . ... .......... .

19. What is your conferencing package? .. .. ... .... .. ..... .. .. ..... .. ...........................................

20. What' s your competitor conferencing package?

a) . .. ......... .. .... . ..... . ....... .

b) .. ........... . .. ... ............ .

c) ...... .. .... . . . . ·················

d) .... . . .. ..... . .... . ............ . .

e) .......... . . .. . . . .. .. ········· .. .

f) ................................. .

g) ........... . ...................... .

Many Thanks.

V

APPENDIX II: BUDGET.

ITEMS.

Stationery: UNIT COST PER UNIT. AMOUNT.

Photocopying 160 1 1600 Papers. Pens. 3 10 30 Erasers. 2 20 40 Flash Disk 1 1600 1600 Pencils. 2 20 40 -- -Sub Totals Ksh. 3310 Transport and Communication. Airtime 10 100 1000 Local Transport. 8 200 1600 Data collection Tools. Tape recorder. 1 500 500 Tapes. 5 120 600 - --Batteries. 3 50 150 Sub total. Ksh 3850 Typing and Photoc~ying. -- ----Questioners typing. 10 10 100 Research Proposal 60 10 600 Typing. -Photocopying. 300 3 900 Binding Proposal 200 3 600 Sub-Total. Ksh 2200 Research Assistant. 200 6 1200 Miscellaneous 400 2 800 Sub total Ksh 2000 ---- -- - - >--

Grand Total Ksh.11, 360.00

VI

IU KAMPALA INTERNATIONAL UNIVERSITY

Ggaba Road, Kansanga • PO BOX 20000 f<arnpala, Uganda Tel: +256 (0) 41 266 813' Fax: •256 (0) 41 501 974

E-mail: admin@kiu.ac.ug * Website: http:/ /www.kiu.ac.ug

OFFICE OF THE DEAN SCHOOL OF BUSINESS AND MANAGEMENT

Date: 1 oth September, 2008

TO WHOM IT MAY CONCERN

Dear Sir/Madam,

RE:MWANGI CHRISTOPHER KELVIN REG.NO.BIB/7186/52/DF

The above mentioned is a bonafide student of Kampala International University pursuing a Bachelor of International Business Administration in the School of Business and Management of the University.

He is currently conducting field research and the title of the Research project is "COMPETITOR ANALYSIS AND GROWTH OF MARKET SHARE" A CASE STUDY OF SAROVA STANLEY HOTEL . As part of his studies (research work) he has to collect relevant information through questionnaires, interviews and other relevant reading materials.

Your Institution has been identified as a valuable source of information pertaining to his research project. The purpose of this letter is to request you to avail him with the pertinent information he may need.

All and any information shared with him will be used for academic purposes only and we promise to share our findings with your institution.

Any assistance rendered to him in this regard will be highly appreciated.

Yours Sincerely, . \

·1

·DR. SENN GA EDWARD ASSOCIATE - DEAN

"Exploring the Heights"