Competitive Analysis
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Transcript of Competitive Analysis
Competitor Analysis
Business Education Series
You are competing for the customer
• Customers make choices everyday on ‘What”they buy and “Who” they buy it from
• What is your customer actually buying?• How does he decide between competitors?
$ $Benefits
Value EquationPrice
Competition is Good
• Keeps existing companies from becoming fat and lazy
• Gives start-up companies a peek at what’s around the corner
• Gives customers greater choice and better value
• Offers “The thrill of victory”
“Every business has competition”
I have no competition!
Steps in Competitive Analysis
• Determine what business you are in• Map the competitive landscape • Identify strengths and weaknesses• Analyze how the winners and the losers
play the game• Formulate a strategy to differentiate
yourself
Ask These Basic Questions
• How else is the customer solving the problem or satisfying the need today?
• What does he like and dislike about each?• What other options are on the horizon? • What’s the compelling reason for him to
buy your product?• What will it take to get him to switch?
Who is my competition?
Who wants their own business?
What business are you in?
Direct Competitors: Same Product
• Niche Film Venues • Multiplex Cinemas
Indirect Competitors: Fulfills the Same Need
Deliver by Mail
Deliver by TV
Deliver by Internet
Blockbuster
Substitutes: Acceptable Alternatives
Critical Competitive Information
• Structure, strategies, commitment• Business model• Financial and operating analysis• Marketing strategy (message, tactics, pricing,
distribution channels, key customers)• Market perception and desired positioning• Future direction
How to Gather information• Be a customer• Find customer reviews• Read your competitors’ “resumes”• Scrutinize analysts’ reports; “attend” web-casts• Talk to your competitors’ customers • Interview consultants and opinion leaders• Search the Internet; check public filings• Subscribe to trade journals and newsletters• Purchase multi-client market studies• Attend industry conferences and trade shows
Situation Analysis
• Situation Analysis - “SWOT”– Your company (product)
• Strengths• Weaknesses
– Outside environment• Opportunities• Threats
SWOTSTRENGTHS
• Low-Cost Operations• High Customer Satisfaction• High Efficiency
WEAKNESSES• Limited Long-Haul Routes• No Business Class• No International Flights
OPPORTUNITIES• Non-Stop Long-Haul Flights• Expansion to new cities• Airline bankruptcies
THREATS• Rising fuel costs• New low-cost airlines• Airport capacity limits
Competing to Win
• To survive and prosper you’ll need to:– Pay the entry fee (Critical success factors)– Pick your seat at the table (Positioning)– Execute a winning strategy (Competitive
Advantage)
Critical Success Factors
• Critical Success Factors – Necessarybut not sufficient to win in the marketplace
• Different for every industry• Flexible manufacturing• Strong R&D pipeline • Location
To compete for the long term you need to take steps to build a sustainable competitive
advantage
• Strengthen core competencies• Secure strategic assets• Find a niche to dominate• Build a defensible position
Establishing a Competitive Advantage
Other Sources of Competitive Advantage
• Cost leadership• Product differentiation• Innovation in business methods• Synergistic alliances • Exclusivity arrangements• Barriers to entry
Ethical Conduct: Do Not List
• Lie when representing yourself• Ignore company’s legal guidelines• Tape record a conversation• Plant eavesdropping devices• Mislead anyone into an interview• Discuss price information with a competitor• Steal a trade secret• Go dumpster diving !!!
If you remember nothing else….
“There is only one boss…the Customer. And he can fire everybody in the company from the chairman on down, simply by spending his money somewhere else.”
- Sam Walton
Questions and Comments