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- Importance of understanding competition
- Approaches to competitor analysis
- Identifying competitors likely response
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juggested Readings

‡ jtrategic Marketing Management by Wilson &

Gilligan (chapter 4)
‡ jtrategic Marketing by: David Cravens (chapter 7)
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- Provides an understanding of your competitive
advantage / disadvantage relative to your
competitor¶s position.
- Insights into competitors strategies
- Developing future strategies to sustain/establish
advantages over your competitors.
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ãature and intensity of competition within any industry
is determined by the interaction of five key forces:
1. The threat of new entrants
2. Power of buyers
3. Threat of substitutes
4. Extent of competitive rivalry
5. Power of suppliers
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- Depends on barriers to entry
- How heavy is the capital investment
 
 
   
- jtrong brand image to overcome
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- Cost incurred to create distribution channels
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- Is likely to be higher if:
1. There are large number of suppliers
2. Alternative sources of supply
3. Threat of backward integration
$%


&
  
1. jtarted as textiles company
2. Makes raw materials to produce textiles
3. Vertically integrated
4. Bargains on price for huge quantities it picks up.
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3.  
- Will be more prevalent if:
- Customers perceive other offers to perform
the same function as ours
- jubstitute products offer higher value for
money
- jubstitute products earn higher profits
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 nion versus ready to make paste
» Dabur Hommade pastes
 Tomato versus tomato puree
 jcooters versus Motorcycles
» Hero Honda sales at the expense of Bajaj
 Vanaspati versus edible oils
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4. $%  



Intensity of rivalry will be greater if:

- Competitors are of equal size and are seeking
dominance
- High fixed costs provoke price wars to maintain
capacity. E.g: Airlines industry
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 ãew addition of capacity have created excess

capacity
Hotel industry


 
 Product homogeneity necessitates activity to
maintain share.
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5.  

Is likely to be higher if:
- There are few suppliers
- Cost of switching from one supplier to another is
high
E.g: Intel

juppliers are likely to integrate forward

Kirloskar compressors into airconditioners.
Reliance entry into petroleum products retailing
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- Looks straight forward
- Is not usually the case
E.g: Bajaj Auto
1.Underestimation of LML
2.Undermining the strengths of Hero Honda
- Gestetner underestimation of Xerox
- Extinction of British and U.j television companies by
Japanese organizations
- jharp attack by jymphony aesthetic coolers over
traditional coolers
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- Kitkat versus Perk
- ãescafe versus Bru
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- Cadbury's Eclairs versus. ãestle Kitkat
- Canada Dry versus Pepsi Cola
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- Airlines versus Railways
- jecond hand cars versus scooters versus Tata ãano
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- Dishwasher versus Microwave oven
- Designer jewellery versus Ritu Beri's fabrics
- Debeer¶s versus ãokia mobile phones