{Uyndon Simin and ‘etnony cheng Understancing competitors’ stratagias the practioner cademi G20 ‘Marketing Intatigence & rani 15/3 [1997] 124-134 10 per cent (Barclays, 1996), However, the UK electronics industry is not able to build up strong companies competing in the high-end DRAMor semiconductor markets, where there is a growing trade deficit and declining competitive pressure on overseas rivals, Total Uk electronics output grew by 15 per cent in 1994 and grew a further 10 per cent in 1995 (CSO, 1995). The telecommunication sector 1s growing fastest while the instrumentation sector has the lowest growth. The electronics industry out performed overall UK industry byoneshird during 1992.95, The main con- tributor to the growth is the development of the European personal computer market, which nearly doubled during this period. While most businesses were found to under: take competitor analysis, it was generally quite rudimentary in nature, of limited scope and far from on going or regular. There were some companies found to be deploying the ideas of business gurus such as Michael Porter ar leading academics including Peter Doyle or David Aaker but, on the whole, the level of competitor analysis was poor and quite someway from the concepts presented inthe literature, Competitor analysis ‘The leading name cited by most acaclemies and MB.-trained marketing managers in the context of competitive strategy is Michael Porter, whose work in the 1970s and mid-1980s established concepts and issues still of cen. tral importance to mast businesses. More secently, work by, among others, Aaker (1995), Dibb ef af. (1996), Doyle (1994), Wong and ‘Saunders (1996), has added to the debate about tracking competitor activity and utiliz: ing the marketing intelligence provided to determine proactive marketing strategies which do not merely react to rivals’ moves (Simkin, 1996a). Before reviewing the scope of competitor intelligence in the electronics. industry. this paper briefly presents an overview of these key concepts in order to Juldge the rigour of the competitive analysis inthis industry According to Wong and Saunders (1996), in order to gain competitive advantage, compa. niles should design offers that satisly targeted customer needs better than competitors offers, The pracess of understanding compet tors Is undertaken by competitor analysis. As shown in Figure 1, this isa process of Ident fying key competitors; assessing their objec fives, strengths and weaknesses, strategies and reaction patterns; and selecting which ‘comperitors fo attack or to avoid, Wong and Saunders (1996) argue that the Identification of competitors in a market such ascolas, dominated by Coca-Cola, Pepsi and supermarket own labels is apparently rela. tively straightforward, but that in many mar- kets even colas - itis not so easy. Are the key competitors the other cola manufacturers, or are prominent rivals producers of ether soft drinks and nonalcoholic beverages such as mineral waters, iced teas or alcopops? Doyle (1994) accordingly believes there are four types of competitors: direct, indirect, product competitorsand implicit competitors, There are two approaches widely practised to iderr tify the scope of competition: ask the industry concerned - for example, which brands do the ‘major cola manufacturers monitor; and dis. cuss buying practices with consumers and distributors to ascertain the market's view of what forms the competition, Lehmann and Winer (1988) adopt two criteria for addressing, this issue: the nature and number of existing competitors, and the feasibility of substitutlon. Having identified a business’ rivals, Wong andl Saunders (1996) state that 11s then essen: tlalto determine thelr objectives and strate: gles. Artempting to gauge rivals’ plansand degree of success in achieving them enablesa business ta “secand guess” what course of action will then result from their compet! ors. An assessment of their strengths and weaknesses, as perceived by the marketplace, then permitsa business to predict how its competitors may be forced to modify their apparent strategies, but also provides the business marketers with the information required to create a differential advantage — someattribute desired by targeted customers are not provided by competitors (Dibb and Simkin, 1996), The development of a compet tive strategy is not complete without an esti ‘mation of competitors’ likely reaction pat: ternsand aclear policy on which competitors, to attack or avoid. In the UK, construction, glant JCB is market leader and attacks head onall rivals inall markets. Inparts of Europe, the company is not known in certain product groups where it isa niche player and chooses not to antagonize directly the local leaders. Information helps decision makers to understand their competitors and to make ‘market decisions, According to Wongand Saunders (1996) a company needs first to Identify, gather, organize and use the sources of information that are pertinent by design: ing the “competitive intelligence system” The sources ofrelevant information could be sales responses from distribution channels, press, magazine or industrial journals, [125]