SECTION 4 Competitor analysis
-
Upload
khangminh22 -
Category
Documents
-
view
0 -
download
0
Transcript of SECTION 4 Competitor analysis
www.regenesys.co.za
INTRODUCTION • Competitors are found in the marketing environment
(Section 2: Fig. 6).
• Competitor identification and analysis forms the basis for “developing successful competitive marketing strategies;
• Which will also “clearly differentiate the company from, and position the company against competitors; to give it the greatest possible competitive advantage”
(Kotler and Armstrong, 2014:548 ).
www.regenesys.co.za
IDENTIFYING & ANALYSING COMPETITORS
Competitive analysis involves:
1. Identifying the company’s competitors;
2. Assessing competi tors’ object ives, strategies, strengths and weaknesses, and reaction patterns; and then
3. Selecting which competitors to attack or avoid.
(Kotler and Armstrong, 2014:548 ).
www.regenesys.co.za
STEP 1: IDENTIFYING YOUR COMPETITORS
1. Against whom exactly are we competing? • Beware of competitive myopia: ignoring
latent or smaller competitors; or underestimating / overestimating them.
• Competitor identification process should be as broad as possible.
Ø Examples: Kodak; comp.manufacturers in 1970s; Harley Davidson etc
www.regenesys.co.za
STEP 1: IDENTIFYING YOUR COMPETITORS CONT…..
Competitive analysis (contd.):
• Modern markets everywhere, are characterised by intense competition.
• One of the major contributions to competitive analysis has been the work done by Michael Porter (1980).
• Let’s take a closer look...
www.regenesys.co.za
PORTER’S FIVE FORCES MODEL (1980)
• The idea of Porter’s work was that “competition in an industry is rooted in its underlying economics and competitive forces that go well beyond the established combatants in a particular industry” (1980:138).
• First determinant of a firm’s profitability is the attractiveness of the industry in which it operates.
• Second determinant of profitability is the competition within an industry.
www.regenesys.co.za
PORTER’S FIVE FORCES MODEL (1980)
Industry competitors
Rivalry among existing
organisations
Potential Entrants
Threats of new entrants
Buyers Bargaining powers of
buyers
Substitutes Threats of substitute products
Suppliers Bargaining powers of suppliers
(Adapted from Porter, 1980)
www.regenesys.co.za
PORTER’S FIVE FORCES MODEL (1980)
Porter’s Five Forces model: • The nature and intensity of competition
within an industry is determined by the interaction of five key forces: Ø Threat of new entrants; Ø Bargaining power of customers; Ø Bargaining power of suppliers; Ø Substitute products or services; and Ø Number of existing competitors.
www.regenesys.co.za
ACTIVITY: PORTER’S FIVE FORCES
Source:https://www.youtube.com/watch?v=mYF2_FBCvXw, Accessed on 02 August 2017
www.regenesys.co.za
STEP 2: ASSESSING COMPETITORS
What are their objectives? • Analyse competitors’ objectives - i.e. what the
evidence tells you they are seeking in the marketplace or what drives their behaviour.
• Could be any one of a number of objectives – including: current profitability, cash flow, market dominance / leadership , technological leadership, service leadership, etc (Wilson et al, 1992).
www.regenesys.co.za
STEP 2: ASSESSING COMPETITORS
What are their strategies? • Analyse competitors’ strategies - ie what
strategies are they using to reach their objectives?
• Directly related to their resources and capabilities.
• What are their strengths and weaknesses? • Table 3: Framework for Analysing Competitors
(Perreault and McCarthy, 2002:120).
www.regenesys.co.za
FRAMEWORK FOR ANALYSING COMPETITORS Competitive variables
Your current or planned strategy
Competitor A’s strengths and weaknesses
Competitor B’s strengths and weaknesses
Target market
Product
Price
Distribution
Communication mix
Business processes
People
Service
Competitive barriers
Likely responses
Adapted from Perreault and McCarthy, 2002,120)
www.regenesys.co.za
TYPES OF COMPETITORS
1. Laid back: Take time to react. Maybe trusting their loyal customer, have no resources to respond etc.
2. Selective: React only to certain kind of attack
3. Tiger: Responds swiftly to any assault. 4. Unpredictable: Do not have predictable
response pattern. You need to be on guard and plan for “what if?”
www.regenesys.co.za
STEP 3: SELECTING COMPETITORS TO ATTACK AND TO AVOID
3. Deciding which Competitors to Attack; and which to Avoid: • Following the competitor analysis (Table 3):
company must decide: to attack specific areas (of competitor weakness) or not?
• Customer value analysis can be used to assess strengths and weaknesses of a competitor.
• The company should also assess i ts performance against its competitor.
www.regenesys.co.za
COMPETITVE MARKET POSITIONS IN A MARKET
• Competitors may focus on the same customer in the same market – but, they can differ greatly in their objectives and resources.
• The basic types of competitive positions and roles in a market - Table 4: Page 83
Ø Market leader; Ø Market challenger; Ø Market follower; Ø Market nicher.