3. External Consumer Competitor Analysis

8/11/2019 3. External Consumer Competitor Analysis

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Learn | Consult | Research

3.1 External and Consumer Analysis


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Chapter 2 - External andCustomer Analysis

PPT 2-3

Strategic Uncertainties

Strategic Uncertainties Will a major firm enter?

Will a tofu-based dessertproduct be accepted?

Will a technology bereplaced?

Will the dollar strengthenagainst an off-shorecurrency?

Will computer-based

operations be feasible withcurrent technology?

How sensitive is the marketto price?

Strategic Decisions Investment in a product market

Investment in a tofu-based product

Investment in a technology

Commitment to off-shore

manufacturing

Investment in a new system

A strategy of maintaining price

parity


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Cha ter 2 - External and Customer Anal sis PPT 2-4

Strategic Uncertainties

What will thefuture demand?

Performance improvements?

Competitive technologicaldevelopments?

Financial capacity of health careindustry?


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Customer Analysis

Segmentation

Identification of customer groups that respond differently

from other groups to competitive offerings. Thus, a

successful segmentation strategy requires theconceptualization, development, and evaluation of a

targeted competitive offering.

Who are the biggest customers? The most profitable?The most attractive potential customers?

Figure 2.2


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PPT 2-6

Examples of Approaches to DefiningSegments

Customer Characteristics

Geographic

Type of organization

Size of firm

Lifestyle

Sex

Age

Occupation

Figure 2.3


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PPT 2-7

Examples of Approaches to DefiningSegments

Product-Related Approaches

User type

Usage

Benefits sought

Price sensitivity

Competitor

Application

Brand loyalty

Figure 2.3


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Segmentation

How should segments be defined?

Benefit Segmentation

Price Sensitivity

Loyalty

Applications Multiple Segments versus Focus Strategy


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Segmentation and Market-DrivenStrategy

SEGMENTS

VALUEOPPORTUNITIES

CAPABILITIES/SEGMENTMATCH

TARGET(S)

POSITIONING

STRATEGY


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Identifying the Health and BeautySupplies Market Segments

Level of

Competition

Generic

Product

Type

Product

Variant

Product

Definition

Health &

Beauty

Aids

Shaving

Equipment

Electric

Razors

Illustrative

Competitors

Consumer

ProductCompanies

Gillette,

Remington, Bic

Braun,

Norelco,

Remington,

Panasonic

Need/Want

Satisfied

Enhancement

of Health & Beauty

Shaving

Electric

Shaving


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Market Segmentation Activities and Decisions

Market to beSegmented

Decide Howto Segment

FormSegments

FinerSegmentation

Strategies

StrategicAnalysisof Segments


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PurchaseBehavior

Characteristicsof People/

Organizations

UseSituation

Buyers Needs/Preferences

Segmentation Variables


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Illustrative Segmentation Variables

Characteristicsof people/organizations

Consumer

Markets

Industrial/

OrganizationalMarkets

Age, gender, income,

family size, lifecycle

stage, geographic

location, lifestyle

Type of industry , size,

geographic location,

corporate culture, stage of

development, producer/

intermediaryUse situation Occasion, importance

of purchase, prior

experience with

product, user status

Application,

Purchasing procedure

(new task, modified

rebuy, straight rebuy

Buyers needs/

preferences

Brand loyalty status, brand

preference,benefits sought,

quality, proneness to make

a deal

Performance requirements,

brand preferences, desiredfeatures, service

requirements

Purchasebehavior

Size of purchase,

frequency of purchase

Volume, frequency

of purchase


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Requirements for Segmentation

SegmentationRequirements

Response

differences

Identifiablesegments

Actionable

segments

Favorablecost/benefit

Stabilityover time


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Approaches to Segment Identification

IDENTIFIERSOF CUSTOMER

GROUPS

CUSTOMERRESPONSEPROFILE

Characteristics

of People andOrganizations

Use Situation

Buyers Needsand Preferences

PurchaseBehavior and

Loyalty


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Segment Dimensions for Hotel LodgingServices


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Illustrative Consumer Perception Map

LowQuality

HighQuality

Expensive

Inexpensive

GROUPI

GROUPV

GROUP

III

GROUPII

GROUPIV

Brand E

Brand D Brand C

Brand B

Brand A


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SELECTING THE SEGMENTATION STRATEGY

Deciding how to segment Strategic analysis of market segments

Customer analysis

Competitor analysis

Positioning analysis

Estimating segment attractiveness

Segmentation fit and implementation


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CustomerAnalysis

PositioningAnalysis

Financial andMarket

Attractiveness

CompetitorAnalysis

Strategic Analysis of Market Segments


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PPT 2-25

The Brand Loyalty Matrix: Priorities

LowLoyalty

ModerateLoyalty

Loyal

Customer

Non-customer

Medium

Low

toMedium

High

Highest

Zero

High

Figure 3.4


26/51Cha ter 2 - External and Customer Anal sis PPT 2-26

Customer Analysis

Customer Motivations

What elements of the product/service do customers value most?

What are the customers objectives? What are they really buying?

How do segments differ in their motivation priorities?

What changes are occurring in customer motivation? In customer

priorities?

Figure 3.2


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PPT 2-27

Customer Motivation Analysis

IdentifyMotivations

Group andStructure

MotivationsAssess

MotivationImportance

Assign StrategicRoles to Motivations

Figure 2.6



The Customer as Active Partner

Encourage Active Dialogue

Mobilize Customer Communities

Manage Customer Diversity

Co-creating Personalized Experiences



Customer Analysis

Unmet Needs

Why are some customers dissatisfied? Why are some

changing brands or suppliers?

What are the severity and incidence of consumer problems?

What are the unmet needs that customers can identify? Are

there some of which consumers are unaware?

Do these unmet needs represent leverage points for

competitors?



Key Learnings

External analysis should influence strategy by identifying opportunities,

threats, trends, and strategic uncertainties. The ultimate goal is to improve

strategic choicesdecisions as to where and how to compete.

Segmentation (identifying customer groups that can support different

competitive strategies) can be based on a variety of customercharacteristics, such as benefits sought, customer loyalty, and applications.

Customer motivation analysis can provide insights into what assets and

competencies are needed to compete, as well as indicate possible SCAs.

Unmet needs that represent opportunities (or threats) can be identified byprojecting technologies, by accessing lead users, by ethnographic

research, and by interacting with customers.


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Ancillary Slides


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Chance favors the prepared mind.- Louis Pasteur


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Far better an approximate answer tothe right question, which is oftenvague, than an exact answer to the

wrong question, which can always bemade precise.

- John Tukey,

Statist ician


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If you dont know where you aregoing, you might end up

somewhere else.

- Casey Stengel


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3.2 Competitor Analysis


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Cha ter 3 - Com etitor Anal sis PPT 3-36

Competitor Identification

Customer-Based Approaches

Customer choicesWhat brand would you buy ifyour favorite was unavailable?

Application associationsWhat applications?

What brands for each application?

What product substitutes?


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Competitor Identification

Strategic Groups

Pursue similar competitive strategies Have similar characteristics

Have similar assets and competencies


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Competitor Analysis

Potential Competitors: Market expansion

Product expansion

Backward integration

Forward integration

Export assets or competencies

Retaliatory or defensive strategies


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Understanding the Competitors

Objectives andCommitment

Image andPositioning

Size, Growth& Profitability

Current andPast Strategies

Strengths andWeaknesses

Cost Structure

Exit Barriers Organizationand Culture

CompetitorActions

Figure 3.2


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Relevant Assets and Competencies

1) -What businesses have been successful over

time?

-What assets or competencies contributed

to their success?

-What businesses have had chronically low

performance?

-Why?

-What assets or competencies do they lack?


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2) -What are the key customer motivations?

-What is needed to be preferred?

-What is needed to be considered?-What is really important to the customer?

3) What assets and competencies represent

industry mobility (entry and exit) barriers?



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4) -What are the significant value added

components in the value chain?

-Do any provide the potential to generate

a competitive advantage?



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Key Learnings

Competitors can be identified by customer choice (the set from which customersselect) or by clustering them into strategic groups (firms that pursue similar

strategies and have similar assets, competencies, and other characteristics). In

either case, competitors will vary in terms of how intensely they compete.

Competitors should be analyzed along several dimensions, including their size,

growth and profitability, image, objectives, business strategies, organizationalculture, cost structure, exit barriers, and strengths and weaknesses.

Potential strengths and weaknesses can be identified by considering the

characteristics of successful and unsuccessful businesses, key customer

motivations, mobility barriers, and value-added components.

The competitive strength grid, which arrays competitors or strategic groups on

each of the relevant assets and competencies, provides a compact summary of

key strategic information.


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Chapter 3 - CompetitorAnalysis PPT 3-44

Ancillary Slides


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Induce your competitors not to

invest in those products, marketsand services where you expect to

invest the most that is the

fundamental role of strategy.- B ruce Henderson

Founder of BCG


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There is nothing more

exhilarating than to be shot atwithout result.

- Winston Chu rch i ll


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The best and fastest way to learn

a sport is to watch and imitate achampion.

- Jean-Claude Kil ly,Skier


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There is one rule for industrialists

and that is: Make the best quality ofgoods possible at the lowest cost

possible, paying the highest wages

possible.- Henry Ford


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We often give our enemies the

means for our own destruction.

- Aesop


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In business, the competition will

bite you if you keep running, if youstand still, they will swallow you.

- Wi ll iam Knudsen


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3. External Consumer Competitor Analysis