Now, let’s expound our topic on External Environment to Competitive Advantage.

Now, one of part that

requires studying is the competitor environment, and this can be done in a process called competitor
analysis, which focuses primarily on companies who are direct competitors with each other. Let us first
distinguish this type of competition to that of the indirect competition:

Show pictures of:

JOLLIBEE VS MCDONALD’S Direct

SHOPEE VS LAZADA Direct

PIZZA HUT VS BURGER KING Indirect

AMD VS INTEL Direct

Hence, competitor analysis requires a firm to understand or “study” the company selling similar products
to a similar market. (Explain why Pizza Hut and Burger King are indirect competitors). When assessing a
firm’s competitive advantage over their direct competitors, certain questions can be asked.

What drives the competitor, as shown by its future objectives.

What the competitor is doing and can do, as revealed by its current strategy.

What the competitor believes about the industry, as shown by its assumptions.

What the competitor’s capabilities are, as shown by its strengths and weaknesses.

A thorough competitor analysis will also take into account, not only the competitors per se, but as well
as its complementors. Complementors are firms that sells complementary products or services that are
compatible with a firm’s own goods and services. Think of how motherboard manufacturers like ASUS,
collaborate with the Intel, one of the world’s leading brand in microprocessors to date. Expound

All of this create a much more comprehensive approach to competitor analysis, as a firm not only needs
to evaluate their performance to their competitors, but they also need to look at how their
complementary companies functions with them, as they add value to their company.

One of the key elements in competitor analysis is gathering up data, information, and knowledge that
allows the firm to better understand its competitors and predict their responses. This process is called
competitive intelligence.

Industrial espionage should be differentiated from competitive intelligence. The latter, also called
corporate intelligence, is the legal gathering of public information by examining corporate publications,
websites, and patent filings in order to determine a corporation's activities. Unlike industrial espionage,
competitive intelligence is an ethical practice, where information may be collected from one or multiple
sources. It helps corporations understand the competitive landscape as well as any and all challenges it
may present.
The basis for this kind of study is the future object tives,