Competitor Analysis

“WHAT ARE THEY GOING TO DO?”

 Competitor Analysis System

 1. Gather secondary data

 2. Gather primary data
 Answer key questions
 Who are they?
 What are their product/service features?
 What do they want?
 What is their current strategy?

3. Determine who has competitive edge

 4. Figure what they are going to do
 Secondary data

Internal sources
Internet
Sales literature
Local newspapers
Business press
Consultants
 Primary data

Sales people
Employees
 “mystery shoppers”
Suppliers
 Accountants, lawyers, printers, etc.
Consultants
Investment bankers
Trade shows
Help-wanted ads
Reverse engineering
 Comparing Product Features

Length Meals Transportation Price

Tour A 7 days all bus $3,450
Tour B 10 days breakfast bus & train $2,900
Tour C 13 days breakfast air and bus $5,500
& lunch
 Assessing Competitors Current Objectives

1. Growth
2. Hold/Consolidate
3. Harvest
 Comparative size & growth (BCG)
Growth of industry

Company B Company C

Company D
Company A

Company E

Comparative market share = sales

 Determining Objectives

Objective Implication
Company A* Harvest increase price, decrease promos
Company B Hold maintain price and promos
Company C** Growth cut price, increase promos
increase distribution

*Company appears to be short of cash

**Short-term loss does not appear to be a concern
 Assessing Competitors’ Current Strategies
At the product level, Marketing strategy can be
expressed at three-levels:
1. Target market selection
2. Core strategy (i.e. positioning & differential advantage)
3. Implementation ( supporting marketing mix)
 Determining Core Strategy

Target Market Core Strategy

Company A teenagers high status & high price
Company B young adults comfort, fit, service & high price

Company C teenagers high style & low price

 Determining “Value Chain”

Inbound Operations Outbound Marketing Service

Company A + 0 + + +
Company B 0 + 0 0 +
Company C + 0 + - -
 Determining the “Marketing Mix”

Product Price Promotion Distribution

Company A hi quality hi price extensive specialty
TV, net stores

Company B hi quality medium limited specialty

hi service price TV, hi net stores

Company C lo quality lo price heavy net mass

lo service promos market
Alternative “Marketing Mix” Analysis

Company A Company B Company C

Product: quality, value chain, benefits

Target Segment: who, where when, why

Place: distribution method and coverage

Promotion: cost and method

Advertising: strategy, media, timing & cost

Price: retail, trade

 Differential Advantage Analysis
Ability to… Company A, etc…..US Ability to… Company A, etc…..US
4.Finance
1.Conceive / design debt
technical resources liquidity
human resources cash flow
2.Produce 5.Manage
physical resources human resources
human resources decision process
3.Market planning
sales force
distribution system
service and sale policy
advertising
Critical Success Factors Comparison

Critical Success Company A Company B Company C US

Factors
1. hot design
2. Internet hype
3. trained sales reps
4. liberal return policy
5. mass distribution
Overall rating
(1 = low, 10= high)
 Assessing Competitors’ Will

Company A Company B Company C

How crucial is this very not very very
product to the firm?

How visible is the very none none

commitment to market?

How aggressive are very somewhat very

the managers?
 What now?

What will be competitors’ strategies?

1. continue as it is
2. change due to
 Changes in marketplace
 Changes in management
 Changes in financial goals
How to determine new direction?
 Management judgment
 Simulation
What will be competitors’ reaction to our strategy?