Structure of Competitor Analysis
   Who are the competitors?
    – Who are the most intense competitors?
    – What are the substitute products
    – Who are the potential entrants? Can they be discouraged?
    – What are the barriers to entry? 
   Evaluating the competitors
    – Their objectives and strategies? Level of commitment? (Note how exit 
     from a geographic market is interpreted)
    – Do they have a cost advantage or disadvantage?
    – Image and positioning strategy
    – Which are the most successful over time?
      • Why?
      • Their strengths and weaknesses? 
    – Customer problems, or unmet needs that competitors could exploit? 
   Competitor Analysis – Customer-based Approach
    Look at competitors from a customer perspective
      – Product-use associations (which products do they associate with a given 
       use or context?)
      – Customer choices (what other brands would be considered?)
    Indirect competitors
      – Consider geographic regions (firms may expand)
      – Customer priorities change 
        • The firm needs to understand positioning and new product strategies 
          of indirect competitors
        • Customers do consider alternatives beyond current direct competitors 
    At what level is the analysis conducted?
      – Business unit, firm, an aggregation of businesses? Analysis may be need at all 
       levels at which strategies are developed.
      – May need to include indirect competitors in some level of strategic analysis
     Competitor Analysis - Strategic Groups
    
      Concept is useful for making industry analysis 
      manageable
    
      Selection of strategy will often mean selecting or 
      creating a strategic group
    
      A strategic group is firms that:
       1. Pursue similar competitive strategies
       2. Have similar characteristics
       3. Have similar assets and competencies
          Specific assets and competencies often serve as 
            mobility barriers
          A firm competing across strategic groups is often at 
            disadvantage (distribution channels, etc)
                     Potential Competitors
        •  Market expansion – firms operating in other geo areas
        •  Product expansion – firms in related product areas
        •  Backward integration – customers that move upstream
        •  Forward integration – suppliers that move downstream
        •  Weak competitors can become strong via M&A situations
        •  Retaliatory or defensive strategies in response to 
           perceived threats
                                          Understanding the 
                                                     Competitors
                                  Image and 
                                   Image and 
                                  Positioning            Objectives and 
       Size, Growth               Positioning             Objectives and 
        Size, Growth                                      Commitment
       & Profitability                                     Commitment
        & Profitability
                                                             Current and 
     Strengths and             Competitor                    Current and 
      Strengths and            Competitor                  Past Strategies
      Weaknesses                                           Past Strategies
       Weaknesses                Actions
                                  Actions
      Exit Barriers
       Exit Barriers                                       Organization 
                                                            Organization 
                                                            and Culture
                                                            and Culture
                                Cost Structure
                                 Cost Structure             Figure 3.2
      © Copyright 2010 John Wiley & Sons Ltd 
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                                    Figure 4.3