Competitor analysis - Wikipedia, the free encyclopedia
From Wikipedia, the free encyclopedia
Competitor analysis in marketing and strategic management is an assessment of the strengths and weaknesses of current and potential competitors. This analysis provides both an offensive and defensive strategic context through which to identify opportunities and threats. Competitor profiling coalesces all of the relevant sources of competitor analysis into one framework in the support of efficient and effective strategy formulation, implementation, monitoring and adjustment. Given that competitor analysis is an essential component of corporate strategy, it is argued that most firms do not conduct this type of analysis systematically enough. Instead, many enterprises operate on what is called “informal impressions, conjectures, and intuition gained through the tidbits of information about competitors every manager continually receives.” As a result, traditional environmental scanning places many firms at risk of dangerous competitive blindspots due to a lack of robust competitor analysis.
1 Competitor array 2 Competitor profiling 3 Media scanning 4 New competitors 5 References
One common and useful technique is constructing a competitor array. The steps include: Define your industry - scope and nature of the industry Determine who your competitors are Determine who your customers are and what benefits they expect Determine what the key success factors are in your industry Rank the key success factors by giving each one a weighting - The sum of all the weightings must add up to one. Rate each competitor on each of the key success factors Multiply each cell in the matrix by the factor weighting. This can best be displayed on a two dimensional matrix - competitors along the top and key success factors down the side. An example of a competitor array follows:
Key Industry Success Factors 2 - Customer focus 3 - Economies of scale 4 - Product innovation Totals
Competitor Competitor Competitor Competitor #1 rating #1 weighted #2 rating #2 weighted 6 4 3 7 20 2.4 1.2 .6 .7 4.9 3 5 3 4 15 1.2 1.5 .6 .4 3.7
1 - Extensive distribution .4 .3 .2 .1 1.0
In this example competitor #1 is rated higher than competitor #2 on product innovation ability (7 out of 10, compared to 4 out of 10) and distribution networks (6 out of 10), but competitor #2 is rated higher on customer focus (5 out of 10). Overall, competitor #1 is rated slightly higher than competitor #2 (20 out of 40 compared to 15 out of 40). When the success factors are weighted according to their importance, competitor #1 gets a far better rating (4.9 compared to 3.7). Two additional columns can be added. In one column you can rate your own company on each of the key success factors (try to be objective and honest). In another column you can list benchmarks. They are the ideal standards of comparisons on each of the factors. They reflect the workings of a company using all the industry's best practices.
The strategic rationale of competitor profiling is powerfully simple. Superior knowledge of rivals offers a legitimate source of competitive advantage. The raw material of competitive advantage consists of offering superior customer value in the firm’s chosen market. The definitive characteristic of customer value is the adjective, superior. Customer value is defined relative to rival offerings
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and geographical coverage pricing. personnel. sales force success rate. By knowing the competitor's media buy. product bundling. and management style compensation. online promotional strategy distribution channels used (direct & indirect). and trends ownership. affective. liquidity. dates. Second. and changes in the environment. growth plans. those firms practicing systematic and advanced competitor profiling have a significant advantage. market shares. more intensive distribution. joint product pricing. facilities. or a new advertising agency. advertising themes. new distribution partners. mission statement. new production processes. and organizational structure Financials P-E ratios. defensive strategy can be employed more deftly in order to counter the threat of rival firms from exploiting the firm’s own weaknesses. Similarly. reach. media selection. frequency. products. and product mix by plant Personnel number of employees. checkmate is one step closer. finances. benefits. a new segmentation strategy. and profitability various financial ratios. plant efficiency. mutual customers. depth and breadth of product line. appeals. new unique selling proposition. exclusivity agreements. An appropriate analogy is to consider this advantage as akin to having a good idea of the next move that your opponent in a chess match will make.com) 2 of 3
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. a comprehensive profiling capability is rapidly becoming a core competence required for successful competition. and flights. price skimming. reminder. promotional budgets. and online presences history . a change in geographical focus. a new branding strategy. more extensive distribution. profiling can reveal strategic weaknesses in rivals that the firm may exploit. and customer loyalty promotional mix. and employee morale & retention rates Corporate and marketing strategies objectives. A competitor's media strategy reveals budget allocation. the manager can arrange his own media plan so that they do not coincide. new creative concepts. patent filings. pull. annual reports. First. price discrimination. comparative. or value migrations within the industry. new product success rate. schedules. capital investment location. It may also indicate a new promotion strategy such as push. Little of this intelligence is definitive: additional information is needed before conclusions should be drawn. plants. balanced. As such. alliances. segmentation and targeting strategy. It might also indicate a new pricing strategy such as penetration. products offered. the free encyclopedia
http://en. and divestitures marketing strategies
Scanning competitor's ads can reveal much about what that competitor believes about marketing and their target market.
Create PDF files without this message by purchasing novaPDF printer (http://www. a new source of sustainable competitive advantage. and allowances Facilities plant capacity. or exclusive distribution. and R&D strengths brands. From a tactical perspective. short term sales generation. corporate governance.Wikipedia. the proactive stance of competitor profiling will allow the firm to anticipate the strategic response of their rivals to the firm’s planned strategies. continuity. method of growth (organic or acquisitive) Products. growth rate. shipping logistics. Profiling facilitates this strategic objective in three important ways. These profiles give an in-depth description of the competitor's background. customer base. brand loyalty and brand awareness patents and licenses quality control conformance reverse engineering Marketing segments served. insights from recent marketing or product research. it can also be used to help a manager implement his own media plan. and trade associations. This involves: Background location of offices. discounts. new creative objectives. and themes. ad agency used.org/wiki/Competitor_analysis
making competitor knowledge an intrinsic component of corporate strategy. a new positioning strategy. Changes in a competitor's advertising message can reveal new product offerings. discounts. problems with previous positions. or loss leaders.novapdf. Clearly. and product portfolio balance new products developed. dividend policy. age of plant. acquisitions. the strategies of other competing firms. Offensive strategy can be implemented more quickly in order to exploit opportunities and capitalize on strengths. tone. this proactive knowledge will give the firms strategic agility. events. markets. It might also indicate a new distribution strategy. and skill sets strength of management. key employees. Other sources of corporate intelligence include trade shows. strength of brand portfolio. and strategies. long term image creation.key personalities.wikipedia. and cash flow Profit growth profile. capacity utilization rate. A common technique is to create detailed profiles on each of your major competitors. as in chess. a good offense is the best defense in the game of business as well. line extensions and contractions. informational. a new strategic direction. Third. and selectivity and focus. Indeed.Competitor analysis . By staying one move ahead.
Oxford/UK 1989 Estelle Metayer: "Demystifying Competitive Intelligence" Ivey Business Journal. Beat the Competition: How to Use Competitive Intelligence to Develop Winning Business Strategies. a non-profit organization. Wikipedia® is a registered trademark of the Wikimedia Foundation. How to Use Competitive Intelligence to Develop Winning Business Strategies. it is necessary to estimate future competitive threats. The most common sources of new competitors are == Companies competing in a related product/market Companies using related technologies Companies already targeting your prime market segment but with unrelated products Companies from other geographical areas and with similar products New start-up companies organized by former employees and/or managers of existing companies The entrance of new competitors is likely when: There are high profit margins in the industry There is unmet demand (insufficient supply) in the industry There are no major barriers to entry There is future growth potential Competitive rivalry is not intense Gaining a competitive advantage over existing firms is feasible ==See also: marketing industry or market research industry information marketing management marketing plan competitive intelligence
1. additional terms may apply. 2007. Text is available under the Creative Commons Attribution-ShareAlike License. 2003." Prentice Hall.org/wiki/Competitor_analysis
Some firms hire competitor intelligence professionals to obtain this information.com) 3 of 3
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.org/wiki/Competitor_analysis" Categories: Business intelligence | Competition | Market research | Strategic management This page was last modified on 15 November 2010 at 10:22." FT Press. Nov 1999 Michael E. UK: Basil Blackwell Publishers.. 2007) 2.Competitor analysis . 2003. Basil Blackwell Publishers.wikipedia.wikipedia. 2007) 3.scip.
In addition to analyzing current competitors. Ian (1989). ^ Gordon. Craig Fleisher and Babette Bensoussan: "Business and Competitive Analysis: Effective Application of New and Classic Methods. Oxford. Porter: Competitive Strategy: Techniques for Analyzing Industries and Competitors 1998. ^ (Fleisher & Bensoussan. the free encyclopedia
http://en. Ian Gordon: Beat the Competition.Wikipedia. ^ a b c (Fleisher & Bensoussan.novapdf.org) maintains a listing of individuals who provide these services. Craig Fleisher and Babette Bensoussan: "Strategic and Competitive Analysis: Methods and Techniques for Analyzing Business Competition. The Society of Competitive Intelligence Professionals  (http://www.