Competitive Advantage Chapter : 18 Lec: 10 a. Competitor Analysis Competitive Advantage An advantage...

Competitive Advantage

Chapter : 18Lec: 10 a

Competitor Analysis

• Competitive Advantage An advantage over competitors gained by

offering consumers greater value than competitors do

e.g. Monal• Competitor Analysis The process of identifying key competitors;

assessing their objectives, strategies, strengths, and weaknesses, and reaction patterns: and selecting which competitors to attack or avoid

Monal

Competitor Analysis

• Competitive marketing strategies Strategies that strongly position the company

against competitors and that give the company the strongest possible strategic advantage

Steps ins Analyzing Competitors

Identifying the company’s competitors

Assessing competitors’ objectives, strategies, strengths and weaknesses, and reaction patterns

Selecting which competitor to attack or avoid

Competitor Analysis• Identifying Competitors - similar products and services - Same customers - Similar prices e.g. Coke vs. Pepsi• Competitors Myopia - latent competitors can also be a threat along with the

current competitors e.g. Kodak – Fujifilm – Digital Cameras Telegraph department- cell phone/ Internet Encyclopaedia Britannica – Wikipedia etc.

Coke vs. Pepsi

Identifying Competitors

- Industry point of view e.g. Oil Industry, Automobile industry,

Telecom industry etc.- Market Point of view e.g. Satisfying the same customer need and

build relationship with the same customer

Telecom Industry

Assessing Competitors

• Determining Competitors’ Objectives - Importance on profitability, market share,

service, technology and other goals e.g. Objective low cost, it will reduce cost Zong - New segments e.g. Pizza Hut diverse menu Dominos – Only Pizza

Assessing Competitors

• Identifying Competitors’ Strategies - Strategic Group: A group of firms in an industry

following the same or a similar strategy e.g. Surf Excel ---Ariel Lado Soap--- Gayee soap - A company can jump from one group to

another e.g. Life Bouy to premium sector

Competitors

Assessing Competitors

• Estimating Competitors’ Reactions - What will our competitors’ do? - price cuts, promotion, new product e.g. Telecom wars e.g. Lawn collections (Gul- Ahmed, Sana

Safinaz, Al-Karam)

Assessing Competitors

• Assessing Competitors’ Strengths and Weaknesses - What can our competitors’ do? - gather information about them - Secondary sources are good for information - Companies can benchmark themselves Benchmarking Comparing company’s products and processes to

those of competitors or leading firms in other industries to identify “best practices” and find ways to improve quality and performance

Selecting Competitors to Attack and Avoid

• Strong or weak competitors Customer value analysis Analysis conducted to determine what benefits

target customers value and how they rate the relative value of various competitors’ offers

e.g. Mac makeup– good quality Charles & Keith– comfortable and trendy

Charles & Keith

Strategic Sweet Spot versus Competitors

• u

Customers’ needs

Company’s capabilities

Competitors’ offerings

Competitive environment

Selecting Competitors to Attack and Avoid

• Close or Distant Competitors e.g. Nike with Adidas and Reebok instead of

Bata - Banks taking over other banks

Selecting Competitors to Attack and Avoid

• Good or Bad Competitors Good: go by the rules of the industry Bad: Break the rules or make their own rules

• Finding Uncontested Market Spaces - Blue ocean strategy

Designing a Competitive Intelligence System

• Collecting• Analyzing • Action

Competitive Strategies• Approaches to Marketing Strategy - No one strategy is best for every company - (Volunteer to Volunteer) V2 V marketing taking

a hype• Three stages of marketing strategy - Entrepreneurial Marketing---your own rules - Formulated Marketing---established companies

follow - Intrepreneurial Marketing---to get out of

formulated marketing and be close to customers

Basic Competitive Strategies

• 3 winning strategies- Overall cost leadership (production &

Distribution cost) e.g. Wal-Mart, Savor- Differentiation (something different) e.g. Samsung 3D Television- Focus (be specific about who you are targeting)